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.)

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Comments

  1. oyster says:

    I recently cancelled my Amex plat, having held it for 7 years so I’m not a churner. BUT, given Amex have massively upped the fee, restricted travel insurance and now losing Oneworld Sapphire benefits, what incentives could Amex provide to encourage me back at some point if they were not to offer acquisition bonuses?

    Ultimately an easier way would simply be to move the churn rule from 6 months to say 2 years. This would prevent mass churning without disincentivising the return of previous ‘genuine’ customers.

    • I expect, in reality, 2 years would be OK. Plat has real issues now – AA and US Airways lounge access ends this week and Delta will stop allowing guests. Add in the end of Cathay Gold and they need to pull something out of the hat – and for the long term, not just a one-off £50 deal.

      • oyster says:

        To be completely fair to Amex, they did add guests to Priority Pass to both main and supplementary plat holders not long ago. This is a good extra benefit for a family.

  2. andy L says:

    This again is another supremely interesting post from Raffles and great discussion in the comments. I am personally very grateful to Raffles and HfP and everyone who takes the time to comment – for all the hints, tips, and details of people’s activities. I feel mixed about this news. Of course Amex is an intelligent organisation that must surely be able to differentiated between genuine and shall we say “more opportunistic” customers. It is within their gift to chop and change rules and regs. I am very thankful for all the benefits Amex has brought me, and obviously hope the benefits and opportunities increase and become more varied. If they don’t …..well – we cannot say we have not had the opportunities. – for many of us they have been there for some time. Raffles and HfP have helped many of us achieve and beat our targets. For that I am very grateful. It would be a shame in the unlikely event of a collapse in the “earn and burn” hobby we enjoy…. but it would not be the end of the world…. I would miss the benefits and the banter.. but after all these are “first world problems”.

    Thanks again to Raffles for all the hard work.

  3. Farringdon says:

    Not surprising really. When a small but material number of people were abusing the system by aggressive churning, it was inevitable that there would be some tightening up of the rules.

    Raffles has been saying for a while that Amex is fully aware of the issue, with a suggestion that they might change the rules.

    A lifetime rule seems counterproductive for the card issuers (and would discourage people who have legitimately been away for a long time to sign up for the card again). Something like a 2 year rule, which others have suggested above, sounds very reasonable.

    • Flieduk says:

      Depends what you mean by a two year rule. One sign up bonus every two years? Sounds very reasonable.

      Cannot get the bonus if you have had a MR AMEX in the last two years? THAT is counterproductive

  4. AndyL, I agree with you above, we have a good thing going, and perhaps people might slow down their churning for a bit, as long term we might all continue to benefit. We can mix and match the cards over a two year period and gain from them all, which is a reasonable time frame. Thanks again raffles, let’s hope things stay as they do here in the UK.

  5. I can see why Amex would have brought this in first in the US, because it’s so much easier to churn there. You get many more manufactured spending opportunities, such as Amazon Payments and Amex’s own Bluebird and Serve accounts (not to mention buying $1 coins from the Mint which a lot of people used to do). Plus it’s pretty standard to charge no annual fee for the first year on most cards, which encourages churning.

  6. Farringdon says:

    Presumably the US bloggers who make a living from referral fees (including some number of churned accounts) will take a hit from this.

  7. Jordan D says:

    Very interesting debate, not least as that now I’ve completed the car hire I had on the books and got some points of a Platinum referral, I’m about to shut the card and wait my 6 months … in time for my holiday in November.

    Will I get the Platinum in 6 months time? Who knows … depends on the offers available and – as Raffles has mentioned – what the actual card benefits will be. Time will tell.

  8. RIccati says:

    The flaw in the logic is that most people would have already had these credit cards throughout their life if not the last couple of years, indeed!

    Assuming someone who never had an AMEX card, earning 110-120k in Avios accumulated over a couple of years would give a return in J to Asia. That’s it.

  9. Charlie Whiskey says:

    I don’t think we can complain at all if the rules change. Amex clearly knows what is happening on the churning front (my iPhone app when downloaded showed all of their cards I have ever had) and they make a business judgement as whether they want me and my wife to have their cards or not. I took almost all my advice from the amazing Raffles over the years – ever since the heady days of the Marriott > Tesco Clubcard > BA Air Miles trick which got me started.

    A complete stop to a second points bonus would affect some more than others. When I look at my BA Flightpath record that has just appeared on my BAEC account I see that over the past 10 years Mrs Charlie Whiskey and I have done 8 return long-haul trips in First, 3 in Club, 6 Club Europe plus about another 6 in Business within the USA and Southern Africa. In this time I have not earned a single tier point and all flights have been done on Avios from Amex cards, Tesco and some ad hoc sources such as hotels.

    If it all stopped tomorrow I will have had a great ride whilst retired, and I would still have oodles of Avios in the kitty plus the chance to get BAEC two-for ones until they ran out. I have a conscience but don’t think I would feel guilty as a possible contributor to bonus-demise: Amex can tweak the rules to serve their purposes, and I can work within them to serve mine.

    Oh! and we should lay off Raffles: he is a paragon of virtue, a superbrain and a source of much happiness.

  10. Frenske says:

    Credit cards in the USA are often ridiculous generous. Not only AmEx is doing, but for example Club Carlson Visa is bordering too madness.

    • Stripy says:

      Have you seen the state of Radissons in the US? That’s a big part of the reason why CC has to be generous. There are a large number of competitors offering rooms at similar rates, in better locations and with better amenities…CC has to offer some sort of carrot to make up for that.

  11. Martin says:

    I’d be interested particularly for a platinum card what loss of revenue amex would see if these bonuses stop for people who have already had a card, chances are you wouldn’t take it on again. I’d question if the platinum perks are worth £450 a year.

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