American Express has been at the lead of anti-churning practices and anti-manufactured spending practices for a while now. The language was pretty clearly spelled out for their Bluebird cards and they have made it almost impossible to churn their cards for bonuses over the years.
Amex Adds New Restrictive Language for Sign-Up Bonus Offers
The New Language
However, new language added for sign-up bonus offers demonstrates that they feel they can add even more restrictions when it comes time to giving out bonuses for new cards.
Remember, Amex will already not give you a bonus on a card if you have ever had that card before but not it appears that they will also be looking at this: “We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility“
That seems to indicate that they may just be putting in writing what they have been using for eligibility already, in some cases. It does not give any hard numbers like how many cards you have opened or closed but it is letting potential customers know that it is something they may consider.
Amex Wants “Good” Customers
There is no secret that American Express wants customers who are good customers with them – those that use the cards for spending in regular ways (not gift cards, manufactured spending, etc) and those people that keep the cards for more than a year. It takes credit card issuers at least one year (for some cards, maybe four or five years) to make money on the customer when calculating the sign-up bonus. Amex does not want customers that are dumping them before the second year to avoid paying the annual fee again.
What Does This Language Mean For Potential Customers?
Here is what I don’t like – Amex is not saying they will deny your card application based on this language. They are saying they may deny you the bonus offer based on this. This means you may get a card with a hefty sign-up bonus (and maybe an equally hefty spending requirement) and then you find after you have met the spending that Amex deemed you ineligible for the bonus because of how many cards you have opened and closed. That is bad and Amex is covering their bases for doing this by inserting this language in their offer terms.
Going forward, I would suggest you give Amex a good long look as to what cards you have may be beneficial for you to keep. I generally keep my Amex cards since I can more than make up for the annual fees with what I get back in Amex Offer statement credits. If you can do the same, I suggest you keep those cards open and only close them if you need to when applying for a new card (since there is a limit of how many Amex credit cards you can have open).
In the meantime, hopefully we will get some data points on this. Be sure to check the comment section of this post at Doctor of Credit as customers will likely chime in over there with their experiences.
Also, don’t forget about the language that follows this new language as well:
“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 statement credit to your account. We may also cancel this Card account and other Card accounts you may have with us.”
Yes, Amex really does not like churners! 🙂
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