Earlier this week, I wrote about a new wave of Amex account shutdowns. After I published the post, I got a few messages from readers asking about what the reasons are and whether they should be worried. So, I thought I should write another follow up post about what’s really going on and whether people should be concerned.
New Wave of Amex Account Shutdowns
Firstly, if you look at the chatter on Reddit and other forums, you’ll see a lot of people talking about having their accounts shut down. However, bear in mind that these are reports by anonymous people. I’m not dismissing the fact that these reports may be true. But, if you are just an average Amex customer, I don’t think there’s much there to worry about.
Before we get into the details of these new data points, let’s have a look at certain types of activities that Amex usually frowns upon. When you indulge in these activities, Amex can drop the hammer pretty quickly. In certain cases, you may see your benefits being taken away, points wiped out or in more extreme circumstances, one or all accounts closed.
- Manufactured Spending (money orders, gift cards)
- Credit limit cycling
- Getting a welcome bonus that wasn’t meant for you (hacked link, modified link or a link meant for someone else)
- Opening and closing cards too quickly (closing right after getting the welcome bonus, in less than 12 months after getting the card)
- Spending significantly beyond the stated income on a regular basis
- Very high volume transactions at specific merchants
- Self-referrals
Latest Shutdown Triggers
As per this latest wave of shutdowns, it seems like it’s primarily laser focused on a certain type of customer profile – China based customers using US issued American Express cards. That’s a small subset of Amex’s total US customer base. So that excludes almost all of us. Also, based on the chatter, it seems like the trigeers for the shutdown here were two-fold:
- Bill pay abuse (using third party billers)
- Manufactured spending or massive buying via buying groups based out of China
The Pundit’s Mantra
If you parse through the conversation, you’ll notice that some accounts have been shut down in spite of not having indulged in any of the triggers mentioned in this post. If you’re just an average guy or gal who puts spending on Amex cards, then you should be absolutely fine.
While earning extra points or some perks through ‘alternate’ means might be attractive, there’s a huge downside to it, especially when you know that card issuers have all the necessary resources and technology to crack down on any activity that they determine as abusive or sketchy. If you want to play the long game in the miles and points space, then it makes sense just to play by the rules. There will always be a new opportunity to earn more bonus miles and points. It’s up to you to exercise prudent risk management while playing the game.
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