Posted by William Charles on March 11, 2014
Credit Cards

Published on March 11th, 2014 | by William Charles

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AmEx To Tighten The Controls On Credit Card Churning

According to Dans Deals, AmEx will be tightening the screws when it comes to people who attempt to earn multiple sign up bonuses for the same credit card (often referred to credit card churning). Starting from May 1st, 2014 consumers will only be able to earn the sign up bonus for each card once.

Previously the language on the application pages has stated:

If you are identified as a current American Express® Card Member, you may not be eligible for this welcome bonus offer. This offer is also not available to applicants who have had this product within the last 12 months.

After May 1st the disclosure should read:

If you currently or have previously held <card name here> you will not be eligible for the welcome bonus offer.

AmEx hasn’t currently released a public statement announcing these changes, but it has been confirmed by multiple customer service represnatives. They have left themselves some wiggle room stating:

If a customer does not have a history of credit card churning, they may be eligible to re-earn the sign up bonus but this decision will be made by AmEx on a case by case basis.

Our Thoughts

Personally this is not a big issue for me, I wasn’t churning any of the AmEx cards. I don’t regularly fly Delta and at the moment the Membership Rewards program is fairly weak when compared to Chase Ultimate Rewards. That being said, it is a bit of a pain that it’s no longer possible to churn the Starwoods Guest Preferred card, a lot of people were taking advantage of the fact it was possible to churn – although recently American Express has began cracking down on this only awarding 10,000 (first purchase) out of a possible 25,000 points on offer.

Because of this change American Express should be able to remove the following wording from their terms & condition pages “If you are identified as a current American Express® Card Member, you may not be eligible for this welcome bonus offer” to something more specific (e.g “If you are identified as a current <insert card name here>…”). They should also have additional marketing funds to allocate elsewhere (it shouldn’t come to a surprise to anybody that regularly reads this blog that people who churn credit cards are not profitable). I predict that this extra money will likely be spent on retention, Chase has recently started to add anniversary bonuses to more of their cards but American Express could go down a more personalized path and offer unique deals based on your spending history if you call up to cancel your card.

Another option is to improve the Membership Rewards program, they could add additional transfer partners or increase the bonuses they sometimes offer when transferring points. Their last option is to simply increase the number of points given as the sign up bonus, with citi coming out with massive 100,000 offers this might be necessary for AmEx to compete for the high end, big spend market.

It’s impossible to tell how this will pan out, but hopefully there are some positives to go along with the negative of this loophole being closed.

Hat tip again to Dans Deals



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David

I’m hoping this leads to higher sign up bonuses for everybody involved.

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[…] As of May 1st, 2014 it’s only possible to get each credit card bonus once per lifetime. If there is a sign up bonus that is higher than the bonus you received then you can apply again and receive the incremental difference (e.g if you originally sign up for a card and it has a bonus of 40k points and then cancel your account, if the bonus suddenly jumps to 100k points you’d receive 60k points which is the incremental difference). […]

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