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Amex USA bans card churning …. UK to follow?

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Follow a number of rumours in recent weeks, American Express’s USA operation has now confirmed that card ‘churning’ will not be allowed from 2nd May.

Here is the statement that it issued:

In order to ensure fairness and clarity with our Card Members, we will be making a change to our acquisition incentive control rules for American Express Consumer Cards. Beginning May 2, 2014, welcome bonus offers will not be available to applicants who have or have had the Card they’re applying for. For example, if a Card Member once had or has a Platinum Card, they will not be eligible to receive a welcome bonus offer on a new Platinum Card application.

Amex card

Just so everyone is clear, there is currently no public statement that this will also apply to the UK market.  However, it would be naïve to believe that a policy brought in for the US market will not eventually appear here.

In general, I would not consider this to be a major disaster for anyone if it was implemented.

If Amex brought in exactly the same policy – which means that you cannot get EXACTLY the same card twice and still receive a sign-up bonus – then you would still be able to obtain the following cards over a period of a couple of years:

American Express Preferred Rewards Gold – 20,000 Membership Rewards points

American Express Platinum – 30,000 Membership Rewards points

British Airways American Express Premium Plus – 25,000 Avios

British Airways American Express – 9,000 Avios

Starwood Preferred Guest American Express – 21,000 SPG points

(The bonuses quoted above are all current with the exception of SPG, which is offered at this rate once or twice a year.)

Assuming you converted all these points into Avios, you would earn 110,000 Avios points.

And your partner could do the same!

(Someone who was really keen could also apply for the American Express Nectar card and receive 20,000 Nectar points, worth £100 of easyJet credit.  If you are self employed, there could be a further 20,000 Avios from the American Express Gold Business card and (occasionally, not at present) 60,000 Avios from the American Express Platinum Business card.)

If that is ‘the worst case scenario’ then, frankly, it seems a pretty good one to me. 

There are a small number of people who are now on their 4th, 5th or more Amex Gold card, having cancelled and reapplied on a regular basis over recent years – each time with a 6-month gap.  If such a restriction was launched here, these people would clearly lose out.

This is a tiny minority, however, even amongst Head for Points readers.  The only American Express card I have ever had more than once is the SPG Amex, which I have had twice.  I have also had a Platinum card since 1999 and a British Airways Premium Plus since it was launched in 2002ish, so I think American Express is doing OK there.

It is also worth noting that American Express is not saying that you cannot apply for a card which you have previously cancelled.  It is simply saying that you cannot receive another sign-up bonus if you are accepted.  All other benefits will still be provided.

To clarify again – there is currently no formal plan to change the rules in the UK to match the new rules in the US.  But it would not be the end of the world if they did.

(To see our complete list of all current credit card bonuses, click here to visit our ‘Credit Cards Update’ page or use the link in the menu bar at the top of the page.)

Comments (94)

  • Gordon says:

    Im not so sure its a tiny minority and clearly as time passes the percentage can only go up

  • Singing Dwarf says:

    I tweeted Annex UK about this yesterday, after seeing an article on another blog.

    They responded as follows:

    ” @AskAmexUK @thesingingdwarf Hi there. There are no current plans to make similar changes in the UK. It’s currently 6 months without the card. Thanks ^P”

    Link to Tweet: https://twitter.com/AskAmexUK/status/448861161979510784

    Read into this what you will…

    • Flieduk says:

      But thanks for pointing their noses to the fact that they have churners over here 😛

      • Trevor says:

        What, they didn’t know?! 😮

        • Flieduk says:

          It’s not so much whether “they” know or dont know. Amex is a massive operation whose stuff deal with multiple matters. You just dont want to keep poking the fire

          • Singing Dwarf says:

            Amex are not stupid – they know exactly how many churners they have and how much these churners cost them, compared to the ‘average’ customer.

            Amex can already refuse your business completely if they want to and they don’t need to give you a reason. If they don’t want you as a customer, they don’t have to accept your application – regardless of how many cards you have had in the past and how quickly you have got rid of them!

            What this move by American Express in the USA may do, is to actually increase the churn rate here in the UK. Points hunters here, who are concerned that the gravy train may be about to hit the bumpers could start jumping on, or start churning more aggressively. This in turn could actually hasten a degradation in the value of the offer made here by Amex UK.

      • Rob says:

        I had a long session with Amex at their head office last year …. they are not dim.

        • Flieduk says:

          RAFFLES!! You cannot say that you had a “long session” at AMEX UK HQ and not tell us anything juicy

  • ian says:

    I was reading about this yesterday. The biggest moaners were the constant churners, who showed that they had no understanding of the fact that it’s directly down to them that AMEX have taken this step.

    It’s the same with all promotions. The people who abuse them eventually spoil it for everyone else.

    • nick says:

      Amen. A greedy few take the piss and ruin good offers for everyone else. The guy who bought a box full of the Dan Brown books on the Tesco promo. The people doing £20k of 3v. The people who systematically cancel and re apply for cards. They kill the golden goose.

      • Malibu Stacey says:

        The people who run blogs and make a living from credit card referrals?

        • nick says:

          Raffles urges caution with most offers and he doesn’t churn cards.

          • Iheartarbitrage says:

            I’m guessing Raffles gets a few referrals, so probably doesn’t need to churn cards

          • Rob says:

            I’ve had my Plat since 1999 and my BA Amex since 2002, as I put in the original article – 13 years and 10 years respectively before I started this site!

        • Rob says:

          A committed churner would refer his or her partner, and vice versa, each time. Nothing in it for me after the first application!

          What would change is that I would have to be careful about, say, recommended the SPG card when it was not offering 20k, because applying when it is 10k would ruin your chance of getting the better deal later.

        • ClemK says:

          Haha my thinking too 🙂

      • Rob says:

        Disagree with 1 as that would have been publisher funded, desperate to shift units. Disagree with 2, 3V’s continue to be available and they simply closed a mistake (probably genuine) which let them be used for financial services transactions.

        More sympathetic with 3! However, IF churning was restricted then bonuses may increase, which would improve the situation for non churners.

        • Nick says:

          I’m not referring to the closure of the 3V loophole – as you say, that was always going to happen. The point is more that churning cards and really going over the top on supermarket deals is not going to work for Tescos and the card companies in the long run. They are our allies in this game, not the enemy.

      • Mrtibbs1999 says:

        I bought boxes of the books. Why? Because I knew that an offer like that was a win win. The publishers wanted to sell as many books as possible and they allowed Tesco to bribe us into buying them. You need to see the bigger picture.

      • What's the Point says:

        Slightly 3V related – I saw a $500 Visa gift card on sale in a shopping mall I was at today in America. I read the small print, but unfortunately only usable in the USA.
        Manufactured spend could be done in afternoon, with that kind of limit!

        • Rob says:

          There is a US payments scheme which allows $5,000 of cards a month to be processed into a bank with it. All the US guys therefore buy $5,000 of gift cards each month and immediately cash out. Even better, some credit cards offer a 500% points bonus on office supplies purchases, so you buy these cards in Office Depot or Staples and you bank 25,000 miles. Per month. For ‘almost’ free.

          • What's the Point says:

            All very well, but you will end up gaining a few hundred kilos in weight living out here just to feed the Avios habit!

  • Frenske says:

    By having a six month period, AmEx sort of encourages churning. If it would be one year, it becomes less attractive.

    • Paul says:

      Yeah, that was my reaction to this change. For AMEX to take steps to combat constant churning is understandable, but why not do so by increasing the current 6-months to say, 5 years, without having held the card.

      Ultimately these signup bonuses exist to incentivise customers to signup. Surely there comes a point at which it’s advantageous for AMEX to try and incentivise a previous customer to return…

      • Rob says:

        In reality, I reckon after a couple of years you would be ok.

      • Trevor says:

        In the US it was already 12months, and now moving to “forever”. So for a change, the UK is one-up, our churning period has been shorter, and will be infinitely shorter 😉 But given that the US signups, even for the BAPP, is mor ein the region of 70,000 bonus Avios, I’d be willing to forfeit 6 months for an extra 50k points!

        • squills says:

          I imagine Amex views USA very differently to UK. Amex is still much less developed as a card over here in comparison to Visa/ M/C – ie they’d still see the marketing job as grabbing market share to push it up to a decent wedge, even if that cost a lot in these relatively early days. So being more lenient on churning could easily fall into that strategy, ie no need to go in hard on the churners just yet as the churners are (on the face of it) still worth having.

          Obviously a lot of us would like to think it works for us, ie the benefits we get out, far outweigh the costs. But Amex probably don’t analyse it the same way. They’d see it as acquisition of new customers – who then rapidly push through a few thou of expenditure.

  • M says:

    Maybe in the US it was happening on a bigger scale? If they’d apply the same rule in the UK it would a disaster imho.

  • Alan says:

    If they were going to do this in the UK I’d want them to also mirror two other things they have in the US – much much bigger sign up bonuses and zero fee forex!

    • Rob says:

      Bonuses may increase if churning is blocked, that is true. Amex has been trialling higher bonuses via mail shots in recent months in the UK.

    • Phillip says:

      I second the mirroring of bigger bonuses as well as things like, card renewal bonuses. For example the Amex Gold Card gets 15k MR for $30k spend in the US, when in the UK it’s only 7.5k MR for £15k spend. Or how about the 3x MR per $1 spent on the Gold card in the US vs 2x MR for £1 in the UK? $125 VS £125 Annual Fee? And the list of additional benefits you get in the US goes on…

      • nick says:

        Interchange fees are higher in the us, I believe, so that funds the bigger bonuses. And they are not under threat from the eu cross border interchange fee cap that will soon filter through to domestic transactions and amex, even if they are currently outside the scope.

  • Mr Bridge says:

    One should bear in mind that in the uk we pay £450 for plat amex, and in the us they pay $450.
    There are other difference too, like usa do not pay the 3% FX charge.( that cost me a couple of £hundred a year!
    yet the conversion of MR is the same to avios.
    So you we get a raw deal anyway, churning in uk helps to mitigate that.
    Quite simply no churning= no renewal for me.

  • Stu says:

    I wonder how the May 2nd date will be implemented. Will they base the rule solely on card signups *from* May 2nd onwards, or will they look back at all your cards prior to this date to decide whether you get any bonus. I guess it’s the latter.

    • Rob says:

      People were assuming the first but the statement implies the second, which makes more sense.