American Express is Warning Customers Not to Sign Up for Cards Just for the Bonus

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Via Doctor of Credit American Express has updated credit card application terms for their Delta card with a warning to customers who would just sign for a card, pocket the bonus, and cancel.

Here’s the new language:

If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit bonus miles to your account. We may also cancel this Card account and other Card accounts you may have with us.

American Express Centurion Lounge Dallas

Here are the things they are flagging as problematic:

  • Applying for an offer not intended for you. If you pull up a card with your own web browser and are offered a bonus that seems fine, but if there’s a special link with a promotion embedded they reserve the right to claw back the bonus although it’s not clear that they’ll do so.

  • Cancelling a card or downgrading it in under 12 months. Many banks have long said they could claw back a bonus if you cancelled a card too quickly, there were urban legends of Chase doing this on cards cancelled within 6 months way back a decade ago. If you keep the card a full year though, you’re not on the hook for an annual fee the second year, there’s nothing here that takes away a cardmember’s right to evaluate whether a card product will make sense to keep on an ongoing basis.

  • Returning purchases used to meet the spend threshold for a bonus this is something that in practice American Express and Chase have already frowned on. Don’t buy something, like a refundable airline ticket, get the card signup bonus and refund the ticket. That’s already a risky practice.

American Express generally already limits you to one bonus per card product. And their terms and conditions already say that buying gift cards and making person-to-person payments don’t count as spending towards earning a bonus, even if that’s enforced only sporadically.

So far these terms don’t appear to have been added to other card products beyond Delta. And in practice it’s likely that nothing is new or different.

Copyright: idealphotographer

However it underscores that American Express is paying attention to their costs as they invest heavily in their products. They’re happy to spend significantly to acquire customers, but want to limit the number of unprofitable customers they’re bringing in at the same time.

Ultimately there are many strong American Express card products but in most cases their strength doesn’t come from the signup bonus anyway. These restrictions on earning bonuses isn’t new. And American Express keeps introducing new strong products such that the once in a lifetime limit is only inconvenient to some.

I read this change in terms as laying the groundwork more than anything else, covering themselves for actions they may choose to take against a customer that’s acting egregiously (in their view) rather than the median member who cancels a card after 11 months rather than waiting a year. They don’t want to be poorly-positioned responding to the inevitable CFPB complaint that comes.

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. Well I feel better about having signed up for the AMEX Surpass card just for the 100,000 bonus. I have to keep it a 2nd year to get the free anniversary night so will have it more than the required 12 months, but no more than 2 years, lol…

  2. Good for American express, I’m happy to hear that. I carry an amex Platinum, gold, spg, and reserve that’s over $1000 in annual fees, but they all benefit me one way or another.

  3. @ Gary — Regarding returning items, what if you:

    1) Sign up for a card that gives you, say 50,000 AMEX Rewards for spending $5,000 in 90 days

    2) On day 10 of your 90 days, buy a $5,000 refundable air ticket and receive your bouns

    3) During days 91-120, spend $5,000 on other stuff

    4) On day 121, refund you air ticket

    Is this practice OK?

    — Gene.

  4. I’ve never figured out why if the banks don’t want me to take the bonus and run (or walk or crawl), then why don’t they give me reasons to keep the card? Or at least make it worth my while not to cancel it?

    While we’re at it, I’m not a big fan of the cards that have stiff annual fees, but then provide a quasi-cash rebate. I’m more likely to keep a card with a $150 annual fee than I am a card that has a $450 annual fee and a $300 travel credit. The $450 fee makes me rethink keeping the card in ways that a $150 fee doesn’t.

  5. I just saw this in their 75k amex platinum business for $20k spend amex platinum offer

    You can earn 50,000 additional points after you spend $10,000 in qualifying purchases (or 75,000 additional points after $20,000 in qualifying purchases) on your Card within your first 3 months of Card Membership starting from the date your account is approved. In rare instances, your period to spend $10,000 (or $20,000) may be shorter than 3 months if there is a delay in receiving your Card. Also, purchases may fall outside of the 3 month period in some cases, such as a delay in merchants submitting transactions to us or if the purchase date differs from the date you made the transaction. (For example, if you buy goods online, the purchase date may be the date the goods are shipped).The 50,000 (or 75,000) additional points will be credited to your Membership Rewards account 8-12 weeks after you have met the eligible purchase requirement. If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer (s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit Membership Rewards® to, we may freeze Membership Rewards® credited to, or we may take away Membership Rewards® from, your account. We may also cancel this Card account and other Card accounts you may have with us.

  6. Does the AMEX Hilton card have the same restraints? I had it a few years ago but closed the account. I’d like to apply again but don’t want to waste a credit pull if I’d be ineligible for the sign up bonus.

  7. Gary do your car dealerships give away product to customers or do you expect to make a fair gross on each deal?

    Car dealers have long been the sleaziest and engage in the most deceptive practices against consumers by packing payments, spot/yoyo deliveries. At least consumers have good protections against financial institutions not the case for franchised auto dealers and the NADA lobby.

    Why should Amex or any other FI be paying overly rich bonuses to acquire low value customers who are only after the incentive?

  8. @Ken

    I just the DL Plat card, a couple of months ago I got the Gold. Ive bashed DL to no end, but this past June I ca$hed in for 2 coach tkts JFK-SAV and JFK-FLL each cost me 12k round trip. With UA or AA I couldnt have flown 1 way yet alone roundtrip x2

    also ca$hed in for a 1 way DAD-HAM @ 20k that way Im not ripped off due to my bags weighing more then 20kg and my bags come out 1-2-3 wasnt the greatest ratio apx .06 per mile but still worth it IMO

  9. Amex is a venal company that will cancel you at the drop of a dime. so good to see they are now showing their true colors. Once Marriott dumps Amex SPG (confirmed) there will be no reason to carry Amex anymore and pay their high annual fees

  10. So, can customers claw back late payment fees, high finance charges, annual fees, whatever else, if he/she determined that AMEX was gaming me, err, I mean the customer? Whichever lawyer approved this condition did not run think about this. If gaming the system was outlawed, then scamster class action attys that earn big cash by getting useless vouchers for abused customers would have to find real cases to stay in business.

  11. Unless Amex can prove someone engaged in fraudulent acts to get the bonus, they cannot take away bonuses that were rewarded.
    It is not realistic they will be doing this to any ordinary customer who played by the rules and got the bonus. Nowhere in the fine print says you have to keep spending money after the bonus have been met or keep the card longer than desired.

  12. Why would Amex do this now? Let’s see-Reddit groups with 60,000 followers, Facebook groups with tens of thousands of followers, weekly articles in the mainstream press, all focused on travel hacking.

    As the crowds expand, the values shrink, and they are shrinking fast.

  13. @gene people have had issues when they refunded the specific transaction that pushed them over the spend requirement even people who had spent over 5k within the first 90 days after crossing the threshold. Im pretty sure amex would see what you ask as gaming the system since you did not legitimately meet the spend within 90 days because you refunded.

  14. In the UK we get a fraction of the signup bonus that you lucky guys in the States do 🙁

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