Over the past several years we’ve seen credit card companies largely crack down on those applying for cards exclusively for the welcome bonuses. Credit card companies often offer huge welcome bonuses to lure in customers, but of course they do so with the hope of customers being loyal in return.
American Express, Chase, and Citi, have all added new restrictions the past few years to encourage profitable behavior, or at a minimum, restrict some common ways that they saw people take advantage of welcome bonuses. Just to give a few examples from the three biggest issuers:
- American Express has “once in a lifetime” language, where they typically won’t approve you for a card if you’ve had that card before
- Chase has the “5/24 rule,” where they won’t approve you for many of their cards if you’ve opened five or more new card accounts in the past 24 months; furthermore, they’ve started to restrict welcome bonuses in the same “family” of cards, like how you can’t get the Sapphire Reserve if you have the Sapphire Preferred, and vice versa
- Citi typically won’t offer a welcome bonus if someone has opened or closed a card in the past 24 months, and this now also applies to many “families” of cards
Over time I suspect we’ll continue to see more restrictions added. The problem with these restrictions is that sometimes they may prevent genuinely profitable customers from applying for cards, but I’m guessing the credit card companies get things right more often than not.
We’ve now seen one issuer add a further warning to card applications. American Express has added new language regarding welcome bonuses on many card applications (the bolded part is new):
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.
So they’re saying that they may consider the number of American Express cards you’ve opened and closed when deciding whether you’re eligible for the welcome bonus.
I’m not sure we can draw too many conclusions based on this yet. It sounds to me like this is intended to be more of a warning than a hard-and-fast new rule. It has always been within American Express’ right to shut down points accounts if they feel people are abusing the system, and it seems that this is an extension of that.
So we’ll have to wait for some data points to see if this actually represents a change in policy from the current situation, or if they’re just doing this as a warning.
My guess is that a vast majority of people won’t be impacted by this, and that this is more targeted at those who have extreme behavior.
What do you make of this new welcome bonus language on Amex card applications?
(Tip of the hat to Doctor Of Credit)