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As much as we all love miles and points, we all need to follow a set of rules. Banks have imposed all sorts of restrictions on credit card applications or sign up bonuses. Be it 5/24 or the 1/48 rule, it’s often a complex web of restrictions. The banks’ intention here is clearly to weed out customers they don’t deem profitable. American Express has always been one of the favorite issues for many miles and points aficionados, as they offer a wide range of lucrative miles and points credit cards. However, Amex has been cracking down over the last couple of years. Given how Amex is going about this, how do you manage to stay in their good books and avoid a shutdown?
There are certain types of patterns that might put you on Amex’s watchlist.
While there’s no published policy for shutting down accounts for this reason, you must always tread carefully if you do a lot of manufactured spending. The banks are really looking to crack down on money laundering, but you may be collateral damage if you end up doing a lot of MS. There are multiple posts on Flyertalk that discuss about accounts getting shut down for manufactured spending and credit line cycling.
The most recent data points are circling around the clawing back of referral points. Amex has been pretty generous in allowing you to cross-refer. That means basically that you can refer a friend to a Hilton Honors card even if you have an Amex Gold card. You’ll get Membership Rewards points once your friend is approved.
Doctor Of Credit and Miles to Memories have already reported extensively about Amex clawing back people who’ve referred themselves. This seems pretty logical on Amex’s part. A referral program in its essence means that you need to refer other people to a particular product.
However, I’m irked by Amex’s inconsistency in enforcing this. Apparently, there are reports of Amex clawing back cross-referrals. This really stinks. Why allow something only to claw it back later?
Amex Financial Review
In a worst case scenario, you may get hit with a financial review. A financial review is a situation when Amex finds something fishy with your behavior and need to investigate further before reinstating your accounts. In most cases, you’ll be asked to submit your tax returns. However, there are been multiple reports people surving Amex’s financial review after submitting the necessary details.
Amex apparently has a rewards abuse team that’s monitoring accounts for irregular activity. This clearly is an attempt from Amex to crack down on people trying to game the system. However, other than vague terms and conditions that Amex recently added to credit card applications, there isn’t really a clear definition from their side as to what constitutes abuse. However, a simple example would be that of signing up for a credit card and canceling it immediately after earning the sign-up bonus.
The Pundit’s Mantra
Amex is one of my favorite credit card issuers. Beyond sign-up bonuses, I’ve had a great experience working with their agents to get some really good retention bonuses. Also, their customer service has been top notch and has helped me out on many occasions.
I’ve now held the Amex Gold Card for almost a decade. I’ve been able to offset the annual fee by getting retention bonuses. Over the last decade, I’ve received multiple targeted offers and sign-up bonuses from Amex, helping me earn millions of miles and points.
A recent report outlined how Amex is strategizing and looking to cut costs. If you closely follow business trends and look at financial statements, you can get a fairly good idea of whether a bank would be willing to play easy or tough with the rules.
Given many recent reports of shut downs and points clawbacks, it seems that Amex is surely being vigilant. If you’re looking to go hard with credit card applications, I’d suggest that you tread carefully with Amex. The miles and points game isn’t going anywhere. Why risk getting shut down by a major credit card issuer when you can tread slowly and play the game all your life?
Have your Amex referral points been clawed back off late? Have you been denied a sign-up bonus or hit with a financial review? Let us know in the comments section.