American Express Further Restricts Signup Bonuses, and Why That May Shoot Them in the Foot

American Express Moved to Restrict Signup Bonuses in 2014

In 2014 American Express changed their signup bonus rules to allow one bonus per card type in a customer’s lifetime.

That’s a policy they had in place a decade earlier. It doesn’t just cut off the sorts of customers that Amex wouldn’t want. They cut off customers that are after signup bonuses, but also customers who — despite being clearly savvy in the world of rewards cards — aren’t even aware of the restrictions on personal cards that you’re only eligible for one bonus per product during your lifetime.

Last year I interviewed several senior credit card executives and Bob Daly, Senior Vice President of US Bank for the FlexPerks program shared a story (incidentally sitting up on a panel with the executive in charge of American Express’ Starwood partnership) that he (thought he..) needed to sign up for an American Express card to use at Costco (cough), so he picked the Starwood Amex. He met his minimum spend. When the signup bonus didn’t post, he called in and was told that since he had the card a decade earlier, something he didn’t even remember, he wasn’t eligible.

They’ve Extended the Restriction to Business Cards

American Express backed off of this policy once before. After losing the Costco partnership, American Express wanted to show growth – to show Wall Street it was still a growth company – by any means necessary. I had hoped that would shift them more towards ‘customer acquisition mode’. But after a series of further setbacks they appear to be entering cost cutting mode.

And they’ve extended the one bonus per card product per lifetime to include small business cards.

This May be an Unprofitable Move for American Express

When a customer has a bad Delta flight, they get back at Delta the only tangible and immediate way they can: cutting up their co-brand American Express card. Eventually they may fly Delta again, realize they liked the perks like early boarding and free checked bags that come with the card. They see an ad in the inflight magazine and decide to apply. They’re approved for the card, but their bonus miles never post.

A customer who has shown loyalty to a product in the past is likely to be a better customer in the future, and a less expensive customer to acquire, than someone with no history with the card issuer. But that customer is told they’re less valuable than someone who has no history with the issuer.

Some people game bonuses. When a card company is acquiring customers, they are acquiring good customers and bad customers. What counts is the proportion — that the portfolio they’re acquiring is profitable. And it makes sense to try to optimize that, to make the portfolio even more profitable. Blunt instruments like “once in a lifetime” aren’t the way to do it. Instead, it would seem more effective to welcome back cardmembers who demonstrated profitability in the past, or have characteristics that make it reasonably likely they’ll be good customers in the future.

The problem is American Express can’t really pick and choose, they have to be clear in their terms, or they open themselves up to regulatory scrutiny. That’s why the solution for them is targeted offers. While the general application may exclude card bonuses earned more than once in a lifetime, not all offers have to include that restriction and targeted offers might not.

Now more than ever American Express needs growth

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Is there anyway to find out if I’ve received the bonus on a specific card before? I’ve had so many AMEX products over the years I haven’t really kept track of what I have/have not had.

  2. “Blunt instruments like “once in a lifetime” aren’t the way to do it”Y
    You certainly don’t have a vested interest in this.

  3. LOL Gary. I was sitting in the audience (you did a great job as host / moderator btw) and you are not telling the story good enough.

    The US Bank guy was so good at telling the SPG card story. The clearly angry, and just not happy to be there, AMEX rep could have cut him to little bits with her cold as ice stare as she slowly turned her head towards him at the end of the story. She was clearly not happy about the story and to be put in her place by such a respected bank VP (or even to be there at all for that matter).

    I asked her several card related questions after the presentation but she refused to say anything at all. She clearly just wanted to leave.

    I have to say this was truly a jaw dropping moment and I do fear for AMEX with this new change. IMO it will cost them long term when they can least afford it!

  4. I used to charge many hundreds of thousands of dollars on Amex a year but have started to use other credit cards with better partners or better transfer options. The Amex program is just weak and unless you’re a Delta fan which I am not it’s not worth accumulating that many miles. Most of the time I would transfer miles into my BA account but BA is only good for some short haul flights since it’s nearly impossible to find decent availability on AA through Avios. Forget about long haul premium flights through Avios you might as well just use AA miles instead. If they don’t do something soon they’re going to become a thing of the past and become irrelevant like Blackberry.

  5. I agree American Express is going down hill fast. I have been a customer for over 35 years and I am considering canceling my account with them. Not only because of Costco but because I have a gold card account that use to give me a bonus 15,000 points if I put at least $30,000 a year on the card. A little over a year ago they just changed the terms and no longer give you that bonus 15,000 points. I use to put $40,000 to $50,000 on my card each year. No more. I complained to them and they just gave me a bunch of excuses like well now you have other benifits we gave you. Well what kept me with the card was those extra points. I am now putting all my charges on a Visa card that gives me perks. Goodbye American Express!

  6. If I own 2 businesses, each with a separate name (though they are sole proprietorship)

    Of course I have the same name, but as for those two businesses – could I still get a bonus under each of the “separate businesses”?

  7. Amex probably tracks by SS#. If you’re a sole proprietorship that means they’ll know you have multiple cards if you applied for both using your SS#. It’s a risk but not impossible that it will fall through the cracks.

  8. This cutting off churners is a smart move. There are other ways to attract customers. This is the reason why you are seeing many targeted offers from Amex mailing out to previous customers. I got one recently for Amex business gold. If I were Amex, I would put my budget into finding “previous clients” and targeting them for high bonus.

  9. American Express needs customers more than customers need them.

    Amex was once the hot and sexy prom queen, but that was several decades ago. She needs to develop a winning personality. Haughty entitlement won’t cut it anymore.

  10. @ABC respond to my argument or don’t, regardless of what you think of my motivations. By the way I ‘get’ the new restrictions by Chase more than the Amex ones any vested interest notwithstanding.

  11. I wish you were right Gary, but I’m not sure. They clearly know everything you’ve described and disagree. Doesnt mean they’re not wrong. But they probably have more confidence their ability to send targeted offers to old customers–which makes this instrument substantially less blunt than you imply

  12. Agree with GuestA, the churning days are coming to an end. The bloggers are going to need to find other ways to boost their mileage accounts. Maybe even actual flights, though that’s become less lucrative as well.

    Really the only question is why have the big banks permitted this to go on for so long when it was clearly unprofitable for them? Has there been an uptick in churning, or just maybe some execs have finally decided to cut the low hanging fruit?

    Amex has been awful for many years, and it’s finally beginning to come back and bite them. Good riddance.

  13. “Some people game bonuses.” No shiat, Sherlock. Like 99.9% of the readers that you credit-card peddlers cater to?

  14. Setting themselves apart by not allowing former
    customers to get a credit card signup bonus is a negative for Amex unless the perks for having them improve so much the bonus doesn’t matter. Otherwise it’s a bad marketing strategy.

  15. Slightly OT, it seems as though they are now stalling awarding MR. It’s never happened before, I charge the account and pay the bill before the statement closes. Points always show up at the beginning of the next cycle. Now they want me to wait 2 full cycles (you know the pending points language). They’re making so painful to earn points I may not be interested much longer.

  16. Amex tracks by SS# Mark and Jeff.

    I have 2 businesses for my rental properties (one by myself and the other with a partner). I applied for the Gold Biz card a year ago and got the bonus, then to show my loyalty I applied for the 75k bonus offer after $10k spend for the other business. This time, the application was done over the phone and the agent didn’t mention that I couldn’t get the bonus. And the bonus never showed up.

    I called a few times to push for the bonus considering that they were two different businesses with two different EINs. But, the most the operators would do it tell me is that “they are researching it”. At least the latest operator gave me the option of 1) 14k Amex points or 2) to waive my fee the next year. I won’t be renewing the card after this bait and switch, so I chose the points.

    The worst part is they are sticking behind the “did you hear the (generic) terms and conditions disclosure?” where we stated that you aren’t eligible for the bonus because you have the card open in your other business name. I replied that this business didn’t have the card before, only me, but that didn’t sway them because they say it is based on SS# not the EIN.

    I’m going to make one more call to see if I can find someone more reasonable… wish me luck!

  17. If they lose the SPG card that will reduce the huge volume I do with them. As other programs have gotten more aggressive AMEX seems to be dropping fast. All the card companies are fighting for good paying customers. That is why they have the bonuses.

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