topic Re: American Express clamps down on bonus 'abusers' in Credit Cards

American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 13:26:13 GMT

Via The Points Guy, American Express is adding language to their credit cards designed to curtail some of what see as bonus misbehavior. One of the biggest ones that they seems to be addressing is those that close or downgrade their cards within a year after getting the bonus in an effort to avoid or reduce annual fees. Quoting from the attached article, this is the language that they added to the Gold Dekta MIles card. I think you can expect it to be added to their other cards as well.

If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit bonus miles to your account. We may also cancel this Card account and other Card accounts you may have with us.

It is interesting to see the language about closing your account overall. I know a lot of this stemmed from a past Platinum card 100K offer that was leaked and many people cancelled their cards immediately after receiving the 100K MR points and airline credit (sometimes two of them).

I think that this type of language is something that you probably will see in the future from other creditors like Chase.

https://thepointsguy.com/2017/07/amex-terms-dissuade-churning/

Re: American Express clamps down on bonus 'abusers'

AverageJoesCredit — Thu, 27 Jul 2017 14:09:39 GMT

Wow, thanks for sharing Irish. Bonus chasing with Amex now turning into Bonus Strolling?

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 14:12:13 GMT

@Anonymous wrote:
Via The Points Guy, American Express is adding language to their credit cards designed to curtail some of what see as bonus misbehavior. One of the biggest ones that they seems to be addressing is those that close or downgrade their cards within a year after getting the bonus in an effort to avoid or reduce annual fees. Quoting from the attached article, this is the language that they added to the Gold Dekta MIles card. I think you can expect it to be added to their other cards as well.

If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit bonus miles to your account. We may also cancel this Card account and other Card accounts you may have with us.

It is interesting to see the language about closing your account overall. I know a lot of this stemmed from a past Platinum card 100K offer that was leaked and many people cancelled their cards immediately after receiving the 100K MR points and airline credit (sometimes two of them).

I think that this type of language is something that you probably will see in the future from other creditors like Chase.

https://thepointsguy.com/2017/07/amex-terms-dissuade-churning/

I guess that means just get all your Amex cards and bonuses within 12 months. They don't allow you to get a bonus for the same card twice anyway. I like the obtain a welcome bonus offer that we did not intend for you. If they didn't intend for someone to get a bonus why let them apply for the offer.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 14:23:38 GMT

"I like the obtain a welcome bonus offer that we did not intend for you". I imagine this is for people who use proxies or incognito browsers to trick the computer. I sure they know this is happening. I love how there are forums of people thinking they are fooling the banks...like bankers can't read or something.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 14:29:27 GMT

@Anonymous wrote:
"I like the obtain a welcome bonus offer that we did not intend for you". I imagine this is for people who use proxies or incognito browsers to trick the computer. I sure they know this is happening. I love how there are forums of people thinking they are fooling the banks...like bankers can't read or something.

I mean the incognito browser thing is still intended for you as if they don't want to give offer to current customers when you apply they should just say you are not eligible for this offer. That is just bad programming on their part.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 14:38:53 GMT

@Anonymous wrote:
"I like the obtain a welcome bonus offer that we did not intend for you". I imagine this is for people who use proxies or incognito browsers to trick the computer. I sure they know this is happening. I love how there are forums of people thinking they are fooling the banks...like bankers can't read or something.

That's not what they're referring to as far as I know. About a year and half ago people leaked on the internet a targeted offer for the 100K points American Express. It only was 'alive' for a short period of time before Amex yanked the offer but in the mean time word had spread like wildfire about the offer and many people applied, were approved, and subsequently cancelled the card after receiving the bonus points and often the air credit twice. That did not go over well with Amex and after they started issuing only prorated AF refunds. I believe this new language is a result of that and similar other leaks.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 14:53:34 GMT

@Anonymous wrote:
@Anonymous wrote:
"I like the obtain a welcome bonus offer that we did not intend for you". I imagine this is for people who use proxies or incognito browsers to trick the computer. I sure they know this is happening. I love how there are forums of people thinking they are fooling the banks...like bankers can't read or something.
That's not what they're referring to as far as I know. About a year and half ago people leaked on the internet a targeted offer for the 100K points American Express. It only was 'alive' for a short period of time before Amex yanked the offer but in the mean time word had spread like wildfire about the offer and many people applied, were approved, and subsequently cancelled the card after receiving the bonus points and often the air credit twice. That did not go over well with Amex and after they started issuing only prorated AF refunds. I believe this new language is a result of that and similar other leaks.

I could see why they would be angry as that would cost them a minimum of 1400 dollars per person but it is really their own fault. As my Citi AAdvantage offer code I had to enter code and my last name. They should just implement something like that. Or add language that if you cancel the card before 12 months you have to pay back the bonus.

Re: American Express clamps down on bonus 'abusers'

gdale6 — Thu, 27 Jul 2017 14:54:22 GMT

There are no sacred cows in the internet age and Im stunned AMEX would think there are, I have no use for them as they have no use for me going on year 32.

Re: American Express clamps down on bonus 'abusers'

yfan — Thu, 27 Jul 2017 14:55:17 GMT

This is always what lenders have intended for the use of their bonus offers, only now they are updating their policies and technologies to deal with the practice they consider bonus abuse. The bonuses are meant to acquire long term customers who regularly use their cards, not to fund free vacations for those whose purpose is merely to chase and hop bonuses.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 15:24:22 GMT

@yfan wrote:
This is always what lenders have intended for the use of their bonus offers, only now they are updating their policies and technologies to deal with the practice they consider bonus abuse. The bonuses are meant to acquire long term customers who regularly use their cards, not to fund free vacations for those whose purpose is merely to chase and hop bonuses.

The real issue is competition. Too many credit card companies with nothing to differentiate them.They are trying so hard to steal customers from each other they are decreasing their profits by having huge sign up bonuses but not having any rules about keeping the card a certain amount of time . Unless they say you will pay penalty X if you don't keep the card for Y number of years people will continue to churn. 100,000 sign-up bonuses are going to attrack people to churning who normally would't be interested.

I will gladly keep having them pay for my vacations until they end the free money. I have 3k+ of normal monthly card spending that I pay PIF so I can do a card or two a month pretty easily.

Re: American Express clamps down on bonus 'abusers'

mongstradamus — Thu, 27 Jul 2017 15:42:14 GMT

I have mixed feelings about this , but I think a lot of people were doing signups for say like platinum offer last year and closing account as soon as they got the 100k MR , so they wouldn't have to pay the full 450/550 AF it would be pro-rated. I can kind of understand amex point of view in that respect. Just have to be more cafeful now i guess with apping for cards with big bonuses now i guess.

Re: American Express clamps down on bonus 'abusers'

K-in-Boston — Thu, 27 Jul 2017 16:44:51 GMT

I think it's all pretty much been said already in this thread, so not much to chime in on. The language about targeted offers was definitely referring to things like leaked corporate partnership codes or other codes that are meant to individual or members of specific groups rather than the general public. Getting an offer through using incognito mode or a VPN is still being targeted to you so that wouldn't result in AA with their terms.

Sure there are some grey areas, but to me it's black and white that you're probably gaming the system if you apply for a Platinum card in late December, get 60k MR points, take a $200 airline credit on December 30th and another $200 airline credit on January 2nd, then call to downgrade your Platinum to a $95 AF Green card before the $550 AF hits. I don't think they're going overboard, and for those of us that might churn cards "by the rules" (which I won't do with the Platinum since I don't have a single compelling reason to part with it) nothing should change. Spend X, get bonus, and wait at least a year before making any changes on the account shouldn't result in any AA. Just my $0.02

Re: American Express clamps down on bonus 'abusers'

northface28 — Thu, 27 Jul 2017 17:22:19 GMT

Good for Amex, some "adults" really need to grow up.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 17:31:33 GMT

@K-in-Boston wrote:
I think it's all pretty much been said already in this thread, so not much to chime in on. The language about targeted offers was definitely referring to things like leaked corporate partnership codes or other codes that are meant to individual or members of specific groups rather than the general public. Getting an offer through using incognito mode or a VPN is still being targeted to you so that wouldn't result in AA with their terms.

Sure there are some grey areas, but to me it's black and white that you're probably gaming the system if you apply for a Platinum card in late December, get 60k MR points, take a $200 airline credit on December 30th and another $200 airline credit on January 2nd, then call to downgrade your Platinum to a $95 AF Green card before the $550 AF hits. I don't think they're going overboard, and for those of us that might churn cards "by the rules" (which I won't do with the Platinum since I don't have a single compelling reason to part with it) nothing should change. Spend X, get bonus, and wait at least a year before making any changes on the account shouldn't result in any AA. Just my $0.02

I don't even see the point of churning the Platinum at 60k points. As you have to pay the 550 dollar fee up front. So you get 60k points + 400 travel credit -550 dollars. The PRG you get 50k points + 200 dollars but you save 550 dollars. At 100,000 points it makeks more sense to churn. If you value all the stuff like UBER , Global /TSA and Lounge access you arene't going to cancel it soon as you get your points.

Re: American Express clamps down on bonus 'abusers'

yfan — Thu, 27 Jul 2017 17:56:16 GMT

@Anonymous wrote:
The real issue is competition. Too many credit card companies with nothing to differentiate them.They are trying so hard to steal customers from each other they are decreasing their profits by having huge sign up bonuses but not having any rules about keeping the card a certain amount of time . Unless they say you will pay penalty X if you don't keep the card for Y number of years people will continue to churn. 100,000 sign-up bonuses are going to attrack people to churning who normally would't be interested.

I will gladly keep having them pay for my vacations until they end the free money. I have 3k+ of normal monthly card spending that I pay PIF so I can do a card or two a month pretty easily.

I agree with you that competition is the issue. It's important to understand what the competition is for. Banks want to compete with each other, for customers who will use their products long term. They do NOT want to compete for customers who will "gladly keep having them pay" for vacations. If anything, banks want THOSE customers to go to their competitors instead. The point then is not to "end" the "free money", but to give those rewards to people who, in the views of the banks, "deserve" them. I should point out Amex isn't alone. Chase and others are starting to play with ideas to crack down on churning/bonus-chasing as well.

I don't think issuers can - or need to - put a condition that you have to use a card for a certain number of years to obtain/not have to give back a bonus. Discover comes the closest to that, by doubling the rewards from first year use. Just as we can observe banks' patterns from public forums and blogs, so can the banks observe churner/bonus chaser patterns from the exact same sources. This is a matter of them adjusting their algorithms and review processes to adapt (just as churners/chasers are already looking to adapt to these announced changes). What Amex is doing - and I expect others to follow suit one way or another - is giving themselves a ton of leeway to take away/reverse an already paid bonus, or to not approve the bonus in the first place, or to not approve someone for a product based on their bonus habits. Under these rules, Amex can approve you for a product with say, 100K spend bonus, collect the AF from you, then go back and find - in their sole discretion - that you weren't meant for the specific offer, and let you keep the card (while they keep the AF) but retroactively rescind the bonus offer. They can do so because you agreed that they can during your application process.

Here's the kicker: if they spell out how long you have to keep a card in order for the bonus not to be taken away, people can adjust their "gaming," or not apply at all. That would mean Amex potentially loses out on the AF. They would rather the bonus chaser apply, be approved, pay the AF, and not get the bonus. Is that taking advantage of churners/chasers? Sure. But no more so than it happens the other way around today. Right now, churners/chasers have gamed the system because they know banks are desperate for new customers with good credit, and they exploit that. But banks are figuring out that churners and chasers can be impulsive and addicted to the "game", and they are gearing up to exploit that. What's good for the goose and all that.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 18:13:15 GMT

@yfan wrote:
@Anonymous wrote:
The real issue is competition. Too many credit card companies with nothing to differentiate them.They are trying so hard to steal customers from each other they are decreasing their profits by having huge sign up bonuses but not having any rules about keeping the card a certain amount of time . Unless they say you will pay penalty X if you don't keep the card for Y number of years people will continue to churn. 100,000 sign-up bonuses are going to attrack people to churning who normally would't be interested.

I will gladly keep having them pay for my vacations until they end the free money. I have 3k+ of normal monthly card spending that I pay PIF so I can do a card or two a month pretty easily.
I agree with you that competition is the issue. It's important to understand what the competition is for. Banks want to compete with each other, for customers who will use their products long term. They do NOT want to compete for customers who will "gladly keep having them pay" for vacations. If anything, banks want THOSE customers to go to their competitors instead. The point then is not to "end" the "free money", but to give those rewards to people who, in the views of the banks, "deserve" them. I should point out Amex isn't alone. Chase and others are starting to play with ideas to crack down on churning/bonus-chasing as well.

I don't think issuers can - or need to - put a condition that you have to use a card for a certain number of years to obtain/not have to give back a bonus. Discover comes the closest to that, by doubling the rewards from first year use. Just as we can observe banks' patterns from public forums and blogs, so can the banks observe churner/bonus chaser patterns from the exact same sources. This is a matter of them adjusting their algorithms and review processes to adapt (just as churners/chasers are already looking to adapt to these announced changes). What Amex is doing - and I expect others to follow suit one way or another - is giving themselves a ton of leeway to take away/reverse an already paid bonus, or to not approve the bonus in the first place, or to not approve someone for a product based on their bonus habits. Under these rules, Amex can approve you for a product with say, 100K spend bonus, collect the AF from you, then go back and find - in their sole discretion - that you weren't meant for the specific offer, and let you keep the card (while they keep the AF) but retroactively rescind the bonus offer. They can do so because you agreed that they can during your application process.

Here's the kicker: if they spell out how long you have to keep a card in order for the bonus not to be taken away, people can adjust their "gaming," or not apply at all. That would mean Amex potentially loses out on the AF. They would rather the bonus chaser apply, be approved, pay the AF, and not get the bonus. Is that taking advantage of churners/chasers? Sure. But no more so than it happens the other way around today. Right now, churners/chasers have gamed the system because they know banks are desperate for new customers with good credit, and they exploit that. But banks are figuring out that churners and chasers can be impulsive and addicted to the "game", and they are gearing up to exploit that. What's good for the goose and all that.

I think Amex would run into a lot of legal issues if they started deciding to take away bonuses already paid at their discretion. I have a lot of Amex stock and the company is very profitable. I would be very upset to see them do this. They need to fix their computer systems. Ruining your reputation because you can't fix your systems. is very bad business practice. Amex's advantage over other credit card companies is their customer service. You start taking bonuses away from people who earned them legitmally and you will run into major problems.

Re: American Express clamps down on bonus 'abusers'

yfan — Thu, 27 Jul 2017 18:21:13 GMT

@Anonymous wrote:
I think Amex would run into a lot of legal issues if they started deciding to take away bonuses already paid at their discretion. I have a lot of Amex stock and the company is very profitable. I would be very upset to see them do this. They need to fix their computer systems. Ruining your reputation because you can't fix your systems. is very bad business practice. Amex's advantage over other credit card companies is their customer service. You start taking bonuses away from people who earned them legitmally and you will run into major problems.

No algorithm is perfect or beyond abuse. They would say those people did not earn the bonus "legitimately" because they are gaming the system. And the update to the terms, which is a binding contract governed by contract law, is precisely to give them legal cover. I also doubt people will hire lawyers to sue Amex to retrieve $500-$1500 in rewards (at best) when the lawyers will cost significantly more (there's probably also a binding arbitration clause unless you opt out). It will not hurt their image one bit, since doing this, I suspect, will actually increase their profitability by keeping chasers at bay. Most people, and most shareholders, are simply not going to feel bad for bonus chasers regardless of how popular the "game" is in a certain corner of the Internet.

Re: American Express clamps down on bonus 'abusers'

Anonymous — Thu, 27 Jul 2017 18:31:50 GMT

It's just like everything else... All good things that are abused eventually come to an end or just aren't as good anymore... I like to coupon - 6 years ago when I started the deals were really great, now I dont even do it weekly because abusers ruined it... it happens...

Re: American Express clamps down on bonus 'abusers'

mongstradamus — Thu, 27 Jul 2017 18:37:24 GMT

@Anonymous wrote:
@K-in-Boston wrote:
I think it's all pretty much been said already in this thread, so not much to chime in on. The language about targeted offers was definitely referring to things like leaked corporate partnership codes or other codes that are meant to individual or members of specific groups rather than the general public. Getting an offer through using incognito mode or a VPN is still being targeted to you so that wouldn't result in AA with their terms.

Sure there are some grey areas, but to me it's black and white that you're probably gaming the system if you apply for a Platinum card in late December, get 60k MR points, take a $200 airline credit on December 30th and another $200 airline credit on January 2nd, then call to downgrade your Platinum to a $95 AF Green card before the $550 AF hits. I don't think they're going overboard, and for those of us that might churn cards "by the rules" (which I won't do with the Platinum since I don't have a single compelling reason to part with it) nothing should change. Spend X, get bonus, and wait at least a year before making any changes on the account shouldn't result in any AA. Just my $0.02
I don't even see the point of churning the Platinum at 60k points. As you have to pay the 550 dollar fee up front. So you get 60k points + 400 travel credit -550 dollars. The PRG you get 50k points + 200 dollars but you save 550 dollars. At 100,000 points it makeks more sense to churn. If you value all the stuff like UBER , Global /TSA and Lounge access you arene't going to cancel it soon as you get your points.

Unless things have changed you can't really technically churn amex cards anyways since you only get one signup bonus per lifetime. When it comes to business cards thats a different story.

Re: American Express clamps down on bonus 'abusers'

driftless — Thu, 27 Jul 2017 18:36:35 GMT

As a non-churner I have always wondered if there were no churners if the bonuses would be larger. It is not free money, someone pays for it, and that someone may include the long-term customers.

As Irish wrote, I would not be surprised if Chase, and others, follow Amex's lead.