Credit card issuers are becoming increasingly savvy when it comes to segmenting the market and predicting consumer behavior. The way I see it, maximizing credit card rewards can be a win-win proposition for consumers and the banks.
Restrictions we’ve seen card issuers add
Over the past several years we’ve seen credit card companies largely crack down on those applying for cards primarily 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 give you the welcome bonus on 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 24-48 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
American Express’ new language and bonus eligibility check
The latest addition from American Express was this June, when they added new language to the welcome bonus eligibility when applying for credit cards (bolding mine):
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.
As you can see, this language gives them carte blanche to deny bonuses for whatever reason they’d like. Then again, they already had that power before, but with this they were just putting it down in writing.
Shortly after implementing this new restriction, they added a new eligibility check when you apply for credit cards. When you apply for a card, American Express now has a pop-up that will tell you if you’re not eligible for the bonus on the card, either because you’ve had the card before, or due to other factors. If you’re being denied based on other factors, the message looks something like this:
Based on your history with American Express welcome offers, introductory APR offers, or the number of cards you have opened and closed, you are not eligible to receive this welcome offer.
We have not yet performed a credit check. Would you still like to proceed?
Is American Express denying more people bonuses than in the past?
My general approach to most of these things is that as long as you’re being reasonable, these restrictions shouldn’t concern you. Generally when people share stories of having issues, I can totally make sense of why it’s happening. “I opened 12 cards in two weeks and shut down six of them and tried to get all the annual fees waived and…”
I can totally see why they wouldn’t want to give someone a bonus in a case like that!
But I’m increasingly getting reports of people getting the message saying they won’t be eligible for a bonus under much more reasonable circumstances. For example, let me share some of the data points I’ve gotten regarding applying for the new Amex Gold Card. Like this one:
Amex denied me the welcome bonus for this card, so I didn’t sign up. I have only ever had 3 Amex cards, and only two of them ever had a bonus.
Or this one:
I was told I was not eligible for the welcome bonus even though I never had PRG. I did recently cancel a couple of amex cards that I wasn’t using anymore. Apparently, that has ruled me out from the bonus. Would have been good to know that.
Or this one:
My spouse and i were rejected for the bonus on 2 different Amex cards (this one included. The little popup box says your welcome to submit your application but due to past opening and closing of accounts we will not get the bonus. I paid the fee on my Starwood card for 4-5 yrs in a row. We have never had the card.
Or this one:
I got the warning that I wouldn’t get approval for the 100K personal AMEX Platinum due to past history of opening and closing accounts. I have 4 Amex credit cards all opened 4 or more years ago, and 1 older charge card. They involuntarily closed an old AMEX Hilton when I applied for an Everyday Preferred and I closed a Starwood AMEX. Both closures at least one year ago. Seems like these denials are becoming a trend.
Personally I find this to be strange, so I’m not sure if there’s a glitch, if not everyone is telling the full extent of their credit card history, or what. But I can’t make sense of many of the data points that I’ve received.
The good news here is that people are receiving these messages before submitting their application, so there’s no credit check. It’s not like they’re getting the card, paying the annual fee, completing the minimum spend, etc., and then being told of this issue.
Still, something doesn’t quite add up here. Either there’s a glitch, or American Express has gotten really strict. So if you guys have any data points to share regarding this, please do so in the comments section, so we can hopefully draw some conclusions. The more detailed, the better.