The credit card issuers sometimes adjust the terms associated with their welcome bonuses. They want to encourage profitable consumer behavior, so they don’t want people applying for credit cards solely for the welcome bonuses, or applying for offers that weren’t intended for them.
For example, over the past several years American Express has changed the terms of most of their credit cards, limiting the welcome bonus to those who haven’t had a particular card before. So most Amex welcome bonuses are now “once in a lifetime.” Previously the bonuses weren’t available to those who had the card within the past 12 months.
American Express has added an interesting restriction to the terms of one of their cards, per Doctor of Credit. As of now these terms seem to have just been added to the Delta Gold American Express, and not any other American Express products (though I imagine that could change). Specifically, they’ve added the following regarding qualifying for the welcome bonus on the card:
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.
So American Express is reserving the right to close accounts and take away bonus points if you:
- Apply for a card with a welcome bonus that wasn’t intended for you
- Cancel or downgrade a card within 12 months of acquiring it
- Cancel or return purchases you made to meet the minimum spend
The first and third restrictions aren’t too surprising, while the second one is a bit more problematic, if interpreted literally. Many cards come with the first year’s annual fee waived, and one of the reasons the card issuers do that is to give people a chance to try a card before they “buy it.” So if a card really isn’t working for you, I don’t think there’s anything wrong with canceling the card after around a year.
While the language is intentionally quite extreme, I don’t think that’s how they’ll enforce it in practice. My guess is that they’ve added this language for people who are signing up for offers they’re not targeted for, repeatedly canceling cards a month after receiving them, etc.
Amex has actually been known to take away points and close accounts for people abusing the system, so really they’re just putting this discretion in writing.
For now I’ll mark this as “developing.” We’ll have to wait and see if this language is added to other cards, and also whether Amex actually changes anything as a result of these new rules. In other words, will they shut down the account of someone who signed up for a publicly available offer, put spend on the card, kept it for 11 months, and then decides the card isn’t for them? I doubt it.
What do you make of Amex’s new language regarding welcome bonuses?