American Express has some of the most valuable credit and charge cards for travelers who want to earn points and miles. However, travelers must take heed in their credit card application rules. These rules are designed to prevent customers from taking advantage of them via churning and other “gaming” methods.
Currently, American Express has 18 personal cards and 14 business cards, giving consumers a plethora of options to choose from.
Once Per Lifetime Rule
The Once Per Lifetime Rule is the most infamous and restrictive of the American Express credit card application rules. It disqualifies you from getting a card’s sign-up bonus if you currently have or previously had that card. It doesn’t matter whether you earned a bonus or not. Whether you have previously had the chance to earn a bonus is what counts.
For example, I earned a sign-up bonus worth $200 with my Blue Cash Everyday Card when I first got it. Therefore, I am not able to earn another bonus with that card.
Product changes, upgrades, and downgrades also count towards this rule. You give up the chance to earn the new card’s sign-up bonus if you switch from one card to another. For example, if I upgraded my Blue Cash Everyday to the Blue Cash Preferred, I would not be able to get the latter’s bonus.
Sign-Up Bonus Denials
In 2018, American Express added some strict “anti-churning” clauses in their terms and conditions. One of the clauses states that Amex has the right to take away a sign-up bonus if they notice certain behaviors from you. Some of these behaviors include the following:
- Buying cash equivalents
- Peer to peer payments
- Closing accounts that are less than 12 months old
Buying cash equivalents is a hallmark of manufactured spending. Amex has access to data that tells them what you buy on their cards and where. This is called Level 3 or Third-Level Data. And this data lets them see if you have purchased gift cards from places like pharmacies or grocery stores. Simply avoid buying gift cards when using an American Express card and you will have followed their rules.
Peer to peer payments are when you use services like PayPal to send money to friends and family. Amex can see whether you’re making a retail purchase or engaging in peer to peer lending because of Level 3 data. Just remember that retail purchases via PayPal are fine, but peer to peer lending is not.
Furthermore, closing relatively new accounts makes Amex think that you applied for one of their cards only for the sign-up bonus. This is a clear indicator of “churning” for them. Doing this even once has blacklisted people from ever applying for another Amex card.
Sign-Up Bonus Eligibility
Upon applying for a card, you might have seen a pop-up saying that you are not eligible for that card’s sign-up bonus. That pop-up also asks you if you want to proceed with the application despite not being eligible.
Many people wonder why this happens. One possible reason is that you have done one of the three actions mentioned above. The other possible reason is that you’re not putting enough spend on your other Amex cards recently. Amex does not see you as a person that needs another card if your current cards with them are unused.
Four Credit Card Limit Rule
Furthermore, the Four Credit Card Limit Rule states that one person can have a maximum of four credit cards at one time. Both business and personal cards are included in the four-card total. Cardholders with at least four credit cards must call in and close one of their four before opening a new one.
This rule used to be called the Five Credit Card Limit Rule. But American Express lowered the maximum number of cards from five to four in May 2020.
This rule matters more for travelers than cash back enthusiasts. Cash back enthusiasts only have three options from American Express. However, most American Express credit cards are travel related.
10 Charge Card Limit Rule
In April 2020, American Express implemented a limit rule for charge cards. Cardholders can hold up to 10 charge cards at one time. Both business and personal cards are included in the 10-card total. Cardholders with at least 10 charge cards must call in and close one of their 10 before opening a new one.
American Express charge cards include the Green, Gold, Platinum, and Centurion Cards, as well as their business counterparts. Most travelers will not be affected by this rule. However, certain military personnel and small business owners who have multiple charge cards are more likely to be affected.
1/5 Rule and 2/90 Rule
The 1/5 Rule and the 2/90 Rule govern how many American Express cards you can apply for within given time periods. These rules do not affect charge cards, meaning that you can apply for as many of them as you like.
The 1/5 Rule states that you can apply for one credit card within a five-day period. Furthermore, the 2/90 Rule states that you can apply for no more than two credit cards within a 90-day period.
Soft vs Hard Pulls
Amex is known for doing soft pulls for current cardholders who wish to get another card. Soft pulls are one of the often-overlooked benefits of having an Amex card. The optimal strategy for current cardholders is to get one card that they have never had before. If they want to get a second card, they should wait at least one week before applying.
However, Amex does a hard pull for new cardholders applying for their first card. This is normal as every other issuer handles new applications this way. The optimal strategy for new cardholders is to apply for both a charge card and a credit in the same day. Amex will use the same hard pull and you can get two cards. You will circumvent the 1/5 Rule and get two great cards.
Final Draw
American Express has some of the most valuable credit and charge cards for travelers. Take heed in their credit card application rules and American Express will treat you well.
Those who are new to credit or points and miles should look at Chase cards first. This is because of their 5/24 Rule. However, those who are more established (and/or already have Chase cards) should apply for new Amex cards slowly and with a purpose. These profiles are likely above 5/24, making Amex the next frontier. Be sure to have a reason for applying for any Amex card. This way, you won’t prevent yourself from getting another Amex sign-up bonus in the future.
For everyone, make sure that you write down the date that you got approved for your new Amex credit card(s). This way you can know when you’re eligible to apply again. Furthermore, this tip especially applies if you want to get two Amex cards within a 90-day period. You can circumvent the 1/5 and 2/90 Rules by simply knowing when to apply.
One of the most important reasons to use Amex is their customer service. I use the Amex Plat Reserve CC issued in India. One morning I got a call which informed me that there was possible fraud. Confirmed I hadnt made the transactions, my card was proactively cancelled by Amex, and a new card was in my hand within 36 hours of the call being made.