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MORE AMEX CUTS: Some sign-up bonuses and referral bonuses reduced, with immediate effect

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Last month American Express made some aggressive – and frankly confusing – changes to the rules regarding who qualifies for a sign-up bonus on its personal UK cards.  My summary of the Amex sign-up rule changes is here.

There are now further changes.  This time American Express has changed the sign-up bonuses and referral bonuses on some cards.

Which cards have changed?

The changes impact American Express Preferred Rewards Gold, The Platinum Card and the American Express Rewards Credit Card.

The changes were due to go live at midnight last night and are already in effect.

Change to American Express Gold sign up bonus

What are the changes to sign-up bonuses?

On Preferred Rewards Gold:

The sign-up bonus has been halved from 20,000 Membership Rewards points to 10,000 Membership Rewards points

The qualifying spend required to earn the bonus has increased from £2,000 within three months to £3,000 within three months

If you are referred by a friend to the card, you will receive a higher sign-up bonus of 12,000 Membership Rewards points (previously 22,000 Membership Rewards points)

On the American Express Rewards Credit Card:

The sign-up bonus has been halved from 10,000 Membership Rewards points to 5,000 Membership Rewards points

The qualifying spend required to earn the bonus has increased from £1,000 within three months to £2,000 within three months

On the American Express Rewards Low Rate Credit Card:

The sign-up bonus has been halved from 5,000 Membership Rewards points to 2,500 Membership Rewards points

The qualifying spend required to earn the bonus has increased from £500 within three months to £1,000 within three months

There is no change to the sign-up bonus or spending target on The Platinum Card.

What are the changes to referral bonuses?

With Preferred Rewards Gold:

The bonus you receive for referring a friend falls from 9,000 Membership Rewards points to 6,000 Membership Rewards points

The annual cap on referral points remains at 90,000 points

With The Platinum Card:

The bonus you receive for referring a friend falls from 18,000 Membership Rewards points to 12,000 Membership Rewards points

The annual cap on referral points remains at 90,000 points (if you refer 8 people, you only receive 6,000 points for the last one as you hit the 90,000 points cap)

There are no referral bonuses for the American Express Rewards Credit Card.

There are no changes at all, for now, to the British Airways, Nectar and Starwood card bonuses.

American Express Rewards Credit Card

What is going on here?

On the face of it, some of these changes do not make a lot of sense.  Primarily, why should you need to spend £3,000 to get the bonus on Preferred Rewards Gold when you only need to spend £2,000 to get the bonus on The Platinum Card?

I get a feeling that American Express is pulling back from its attempts to make Preferred Rewards Gold a mass-market product.  There is no other logical reason for pushing up the target spend to £3,000 in three months, which for Mr & Mrs Average is likely to be more than their remaining cash once housing costs and household bills are paid.

It is possible that the American Express Rewards Credit Card will be positioned as the mass-market product, although doubling the target spend to receive the sign-up bonus will also reduce the market for this product.

I am not really concerned about the changes to the American Express Rewards Credit Card, because the only reason a HFP reader should get this is to ‘protect’ your Membership Rewards points from deletion if you choose to cancel your Gold or Platinum cardI explain more in this article.

Is Amex risking long term damage by cutting off the ‘path’ for new cardholders?

My first American Express card, a long time ago, was a Gold.  Over time I progressed to The Platinum Card, and then – when it launched in 2004ish – the British Airways Premium Plus card, which was initially free to holders of The Platinum Card.

I suspect that – outside the world of Head for Points readers, who are well educated by our articles on the benefits of each card – most people start off with the free cards and then progress.  This is either as their income increases (so they can afford the annual fees on the premium cards) or as they become more comfortable with American Express as a partner.

Amex has now made ‘progressing’ less attractive.  For example:

if you start with the ‘free for life’ American Express Rewards Credit Card or ‘free for the first year’ Amex Gold, you are disqualified from the bonus on the free British Airways card or the Starwood card

if you start with the free BA Amex but decide that narrowing your focus to just Avios rewards makes no sense, you are locked out of the bonus on Gold, Starwood etc

if you start with the Starwood card but decide that Marriott Bonvoy no longer offers good value redemptions, you are locked out of the bonus on Gold and the free BA card

There are also no upgrade bonuses to persuade people to go from the free BA card to Premium Plus, or from the new credit card version of Preferred Rewards Gold to The Platinum Card.

American Express changing sign-up bonuses

And what is ‘the best starter card’ now?

HFP has generally promoted Preferred Rewards Gold as the best ‘starter’ card for someone coming into travel rewards.  This is because:

it had a generous sign-up bonus of 20,000 points (=20,000 Avios)

the points could be converted to a LOT of different rewards programmes, so you didn’t have to focus too early whilst you learned the ropes

you got your first year for free

you got two free airport lounge passes

you were free to earn a bonus on the BA or Starwood cards at a later date if you did choose to specialise

The situation is now different:

the sign-up bonus has been halved to 10,000 points (=10,000 Avios)

the target spend has been increased to £3,000 in three months

taking out Preferred Rewards Gold now blocks you from getting a sign-up bonus on a later date for the free British Airways card or the Starwood card – your only option for another bonus is the British Airways Premium Plus card

Overall, I am still tempted to say that Amex Gold is the best starter card for most people.  There is still a bonus, albeit lower, and the two free airport lounge passes will open your eyes to what your miles and points can do for you.  There is still no fee for the first year.

It is arguably better than telling people to start with the free BA Amex, which blocks them from both the Amex Gold bonus and the BA Premium Plus bonus.  In reality, the best ‘first’ card is probably:

The Platinum Card – but most people who are new to Amex won’t want to stump up £450, or

The Starwood Preferred Guest American Express card – because you can still get a bonus on both The Platinum Card and British Airways Premium Plus later, and you only need to spend £1,000 to trigger the sign-up bonus.  However, this is a confusing card for a beginner (even explaining why the Marriott card is called the Starwood card isn’t simple), it has a fee and the two cards you can upgrade to both have even chunkier fees which a lot of the market doesn’t want to pay.

The ‘keep it simple, stupid’ school of marketing is one which I have always believed in, but the current run of changes at American Express seems to be putting that to the test.

Important interest rate information

For the cards mentioned in this article, I am legally obliged to remind you that:

American Express Preferred Rewards Goldrepresentative APR 57.6% variable including the annual fee (free in year 1) based on a notional £1,200 credit limit.  Apply hereReview here.

The Platinum Card from American Expressno interest rate information as it is a charge card.  Apply hereReview here.

American Express Rewardsrepresentative APR 22.9% variable.  Apply hereReview here.

American Express Rewards Low Raterepresentative APR 9.9% variable.  Apply hereReview here.

The Starwood Preferred Guest American Express card –  representative APR 39.7% variable including the annual fee based on a notional £1200 credit limitApply hereReview here.

British Airways American Expressrepresentative APR 22.9% variableApply hereReview here.

British Airways American Express Premium Plus – representative APR 76.0% variable including £195 fee based on a notional £1200 credit limit. Apply hereReview here.

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

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Comments

  1. guesswho2000 says:

    Was only a matter of time, the referrals were generous in light of the cuts last month. Glad I managed to squeeze another one through on my Platinum Card though.

    Another nail in the coffin.

    • guesswho2000 says:

      Although my referral link still says 22k for Gold signup when I click on it.

      Anyone looking to apply, find a referral link, screenshot it, and apply now.

    • guesswho2000 says:

      And looks like referrals between Platinum and BA/BAPP/SPG/Nectar have vanished?

      • Louise says:

        Yes just tried on safari and chrome and appears so!

        Time to cancel my platinum

        • Shoestring says:

          check later – we’ve seen this before temporarily, then the wider choice of cards comes back

        • LewisB says:

          Looks like from my BAPP I can only refer for that or the free BA Amex. No more gold referrals. I was planning on self referring for the gold again next week. Damn…

  2. Crafty says:

    Ouch.

  3. Whizz68 says:

    They have dramatically reduced any benefit of opening and using an AMEX card. I guess they’ll lose a number of customers, over these “enhancements”.

    • guesswho2000 says:

      Problem is, they have no incentive to keep the benefits at their previous levels – there’s no competition in the UK card market now, so even having something mildly better, which these still are, keeps them at the top of the tables.

    • Crafty says:

      Well of course. They’ve done the modelling. Like any business, at the end of the day they are after profit.

  4. They are killing these cards. I wonder how many people have now cancelled because of the first set of changes and will not bother re-applying in future because of these ones?

    • Boobaholic says:

      My two parents, for starters !

    • Yes, I suspect many might just think **** amex and not bother at all.. Let’s face it amex has never had msuch mass market appeal relative to visa and MC. A relatively high proportion of their customers are likely clued in like HFP readers so they are seriously messing with their best customers. The first thought I had on seeing the headline of this article was ‘is it time to look at cash ^back current accounts again?

    • Frenske says:

      It is difficult to make a profit on cards costing AmEx around 31.000 MR points (sign-up plus referral) with 0.3% income per transaction. Remember it’s a charge card so no profit on interest. I’m surprised it lasted so long, still disappointed.

  5. Boobaholic says:

    Does all of this take effect immediately ?

    • guesswho2000 says:

      Yes, it’s in place now. There’s some things not updated yet, so if you find one (referrals to Gold appear to be like that atm) then screenshot and apply now.

    • Shoestring says:

      IANAD but I diagnose dyslexia

  6. mark heath says:

    Open your eyes to sitting in a packed grotty lounge to watch people que up and fight over dried out pastries?
    Yeah sign me up this is the good life isn’t it?

    • guesswho2000 says:

      I’ll remember this when I’m sitting in The Pier First Lounge at HKG in a couple of weeks.

        • Genghis says:

          Food is average restaurant food with poor service.

        • guesswho2000 says:

          I love the Pier, and the Wing as it happens. QF J lounge I always go to for the BBQ pork they give you at the bar, then CX lounges either for sit down food or booze. Cabanas in the Wing are pretty special too.

          Obviously everyone’s views vary, I’m in HKG a lot and never get bored of them though!

      • TGLoyalty says:

        Don’t think that’s on the priority pass list though

      • Was there last night – definitely over-rated. Agree with Genghis about the food and service – the restaurant itself was like an Edward Hopper painting. The bar area is nice. I was there at 6pm and the first foot massage slot they had free was 10.30pm. As for the Wing and the Qantas lounge – mediocre. I’ll probably be down cried for this but I had a much better time (and food and drink) in the Concorde Room three weeks ago.

    • Shoestring says:

      6x Dragonpass lounge passes with the minimum 6 month Barclays Travel Plus Pack – £16.50/ month

      plus you can use all 6 (if you wish) together, so good for families

      available on current a/cs, can have his ‘n hers a/cs, so 12 lounge passes in a year

      breakdown car insurance and travel insurance included for under 80s

    • You’re visiting the wrong lounges 🤔😁

  7. The Original Nick says:

    Referred my OH on Saturday from my Amex Plat. She applied and got approved on Sunday. Hopefully I’ll still get 18000 MR’s

  8. mark heath says:

    Personally I think Amex are just trimming the fat before the end of this business cycle.
    We are 10 years in to an expansion and maybe they are just getting ready to cut anything thats not been a good bet over the last 10 years and batten down the hatches as such.

  9. guesswho2000 says:

    Queue 10,000 comments along the lines of “I referred X for Y last night from my Z, will I still get xx,000 points?”

  10. Frenske says:

    Oh dear there goes my game plan to get 10.000 bonus for £15k spend plus 9.000 for referring my wife plus 3.000 for companion cards. I wouldn’t be surprised if the latter bonus has also been affected, possibly cancelled completely.

  11. Let’s be honest – a business model designed around referring people who spend the bare minimum then cancel doesn’t make much sense.
    It would make sense to offer some tiered bonus for annual spend.
    Maybe Amex have just decided to stay as a niche product.

    • Shoestring says:

      the business model is not designed around HfP churners/ referrers

      referring is worth paying for as it is a cheap way to acquire new customers and a very direct way to invest marketing funds

    • mark heath says:

      Exactly. Typical customer spends 3k on 2 cards twice a year and gets to fly first class costing upwards of 10k then cancels and starts again.
      I imagine Amex can not wait to get most of these customers off the books.

      • Shoestring says:

        who do you think funds the 2-4-1 cost?

        • Frenske says:

          That will the next thing they will change. It’s not sustainable for AmEx to pay upward 70.000 Avios for £10K spend to fund 2-4-1 vouchers. Probably target will be set higher e.g. £15K.

        • Genghis says:

          Such details I’d imagine would be in the contract with BA so wouldn’t change before then.

          Then when contract is up, will Amex ditch the deal anyway due to non-profitability (0.3% interchange + interest + card fees less cost of avios and bonuses and stepped/variable costs of running these cards) and give up £1bn monthly billings?

      • Bonglim says:

        I think the point,so far, is that a hfp reader is not typical. I know thousands of people and hundreds of Amex users and referred about 20 people to Amex. I know one other couple that aggressively persue points, despite me banging on about it non-stop.

        Churning and aggressively chasing points is not typical. I can see good reasons for the last round of changes to block that. This time however it is just a cut and represents a lack of UK competition.

    • Yes like MBNA did a few years back with A Advantage points. Worked a great. Lots on here benefitted from that promo.

  12. mark heath says:

    People commenting above about Amex loosing customers etc… Do u not think they have thought this through? Obviously they were loosing money its pretty simple math to work out.
    The net figure must of been a loss once all points were paid out so the gravy train has been halted.

    • Crafty says:

      It is, however, confusing timing given how heavily they have been marketing PRG as a mass market product.

      Typical case of the marketing and commercial departments not being quite joined up.

    • No Mark, we all know much more about running their business than they do !

  13. Glasgirl says:

    Drat. I was planning to get the gold card in June because hitting the 2k target would be doable with travel spend (can’t book til then due to scheduling). Not sure now that i could hit 3k though because I wouldn’t be using it across with the exchange fees :-/

  14. Harvey says:

    People are saying Amex are in the decline however they have had a strong Q1 with more people using their cards and more merchants than ever accepting

    Outside of the pathing progression it’s all calculated

    • That will be because the new rules were only introduced at the back end of Q1 and this now in Q2…

  15. Cutting the referral bonuses for platinum seems a bit counter productive. This is a card with a high annual fee, I can understand cutting gold benefits. Part of the pitch from Amex when I phoned to cancel my Platinum card was that they wanted to reward people holding fee paying cards for longer.
    I decided to keep it for now thinking I could make a bit of value referring my wife for a couple of cards over the coming year. 36000 points wasn’t worth the £450 fee but it makes a dent value rise. Now being 24000 instead I’ll have to seriously think about cancelling.
    The whole point behind the recent changes we were told was to encourage no churning and long term holding of fee paying cards. This doesn’t sound like this move helps this.

    • If they want people to hold the card for longer maybe they should reduce the fee

    • Alex W says:

      +1. I have only kept the Plat card because of the 18k referrals. I struggle to do 4 or 5 referrals per year as it is. Now with a 33% reduction I would only get 48k MRs per year. No amount of lounge visits or car hire insurance can offset the £450 fee for me, so I am cancelling as soon as I’ve done one more referral.

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