American Express Adds a New Restriction for Initial Bonus Offers

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Credit card company acquisition offers are expensive. While with co-branded products it’s not always the bank buying the entire bucket of miles they’re offering you — acquiring new customers can be profitable over time both for the bank but also for the airline or hotel — this up front cost only gets paid back when customers use their new cards, keep them, and continue spending over time.

Years ago banks would give the same bonuses to customers for the same cards over and over. They got more sophisticated by introducing spending requirements to earn a bonus, thinking if they could get customers using their cards they’d stay in the habit. Those spending requirements started out at $250 and $750 but gradually increased — and often the biggest offers have the highest spend requirements, banks want to make sure it’s people who spend a lot of money on a card that they’re acquiring with the bonuses that cost them the most.

Not every customer becomes profitable, but banks are happy if customers are profitable on a portfolio basis. More customers are profitable than not, and the profitable ones far outstrip new loss-making customers.

They can improve their overall economics if they can weed out the least profitable customers on the front end. Each of the major banks has a strategy for doing this.

  • American Express. One bonus per card per lifetime (which in practice means ‘for as long as Amex systems show you’ve had the card). They sometimes send out targeted offers without this restriction.

  • Citibank. One bonus per card family (eg the standard and premium personal American Airlines cards are treated as the same family, but the personal cards and business American cards remain separate) every 24 months — the clock starting over if you cancel a card (‘open or closed within 24 months’).

  • Chase. Many – though not all – of their cards restrict approvals to customers with fewer than 5 new credit card accounts in the past 24 months. This is colloquially referred to as ‘5/24’.

American Express has added new restriction language about initial bonus offers. (HT: US Credit Card Guide)

Welcome offer not available to applicants who have or have had this Card. 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.

Doctor of Credit calls this rule regarding ‘other factors’ along with ‘the number of Amex cards’ you’ve had “exceptionally vague.”

One Mile at a Time says “It sounds to me like this is intended to be more of a warning than a hard-and-fast new rule.”

I disagree with Lucky that this is ‘a warning’ but agree that “a vast majority of people won’t be impacted by this.”

It strikes me as language added by American Express lawyers to cover the scenario where they decide not to award a bonus to a customer in an extreme case, or claw back a bonus (perhaps even when shutting down a new account). Perhaps it’s meant to cover existing American Express actions, and is written as a catch all, after dealing with cardmember disputes.

I suspect the language is vague on purpose. If it were a warning the message would be clearer, and perhaps not buried in fine print. At this point there’s little reason to think anything about American Express offers has changed, and no reason at all to think they’ll change for most people. Still it will be useful to watch.

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 InsideFlyer.com, 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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Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either. Terms and limitations apply to all offers.

Comments

  1. I’ve been wondering why the card companies have not been doing something exactly like this for awhile. When Amex decided to not award bonuses for people who hunted out links and got all kind of threats they probably realized they don’t need to make it a contract. Just say that no bonus is promised ever. Then just award it to those you want as customers and don’t to people where you don’t care if they have a freak out.

  2. It’s probably a combination of CYA and warning to churners, since they know that blogs like this one will spread the word. It’s also one more data point in the trend of reducing “travel hacking” as many have known it. Other data points include disqualifying more types of “manufactured spend,” devaluations (airlines and hotels), and eliminating point stacking between cards. Chase, Amex, Citibank, and others have to strike a tough balance. The illusion of easy free luxury travel must be maintained in order to keep the aspirational applications and spend flowing.

  3. Well of course it’s purposefully vague! But I don’t think it’s just for show or a warning. There is already a long-running thread on FlyerTalk with reports of Amex not honoring welcome bonuses for vague or unstated reasons. Even when Amex says it’s investigating the missing points, they sometimes just never get back to the cardholder and ignore follow-ups.

    While those could I suppose all be technical issues or poor service, it’s not hard to imagine that some are purposeful. Maybe this new t&c doesn’t signal a change in practice, but maybe it does.

    I understand that those of you with Amex affiliate links are going to soft-sell this “no big deal”. But especially not knowing if one could go through the min spend only to THEN find out they’re not getting the bonus based on this…it should make people a bit more cautious in applying for Amex cards.

  4. With respect to American Express, you say: One bonus per card per lifetime (which in practice means ‘for as long as Amex systems show you’ve had the card). They sometimes send out targeted offers without this restriction.

    I have been mailed Amex offers where I have read every sentence of the fine print, with no mention of the restriction, but when I call them and ask, they say that this restriction is there, even though it is not mentioned. Have you actually had success with this–and how?

  5. @john – Ben and I are friends. This is called having a conversation. Here’s his take, here’s my take. There’s no bitterness or negativity there, express or implied. Personally I’d love it if more people flagged my take on things and offered their disagreement. I read Ben’s stuff all the time, I link to it, and I share my own take [and he links to mine as well].

  6. Ed C, I had the Delta card in 2011-2015. Got an invite in the mail in April for 60K with no lifetime restriction. Applied, met spend and got the bonus very quickly. A friend on the other hand had the same experience but was denied the bonus and they are sticking to their guns.

  7. For years, credit card companies have made big profits by dangling the big carrot signup bonus to induce customer signups in spite of a poor long term value proposition for daily credit card spend. Huge signup bonuses leading to ever increasing point devaluations were very profitable for the companies and made credit card churning the only option with a decent return for customers. The Hilton and post 1 August 2018 Marriott loyalty program and credit cards are examples of this. Most cash back cards beat the return on un-bonused spend for any new Hilton credit card. The old Starwood point program was an isolated exception. Airline credit cards are not typically worth using for daily spend unless redeemed for international premium flights. American Express Membership rewards points are worth less than a cent for many redemptions unlike Chase Ultimate Rewards points making the Membership Rewards points much less attractive. Credit cards touted for their benefits and not worth daily spend rely on breakage for making a profit and the statistics must support this hypothesis or the cards would not be offered. Thus, no annual fee cash back credit cards are the best option with the most reliable long term return for most folks. The value proposition behind the Chase Sapphire Reserve may make it worth using for some semi frequent and frequent travelers.

  8. I wouldn’t mind any of the rules they want to use if they would just tell me before approving my credit card that they will not honor the bonus. It truly sucks to find out $3000 later that you won’t get the bonus.

  9. We always honor our bonuses. And you can use your 60,000 Aadvantage miles for a one way from DFW to OKC, anytime.

  10. Of no importance to 99% of the population who don’t churn cards. Delighted to see the grifters being shut down

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