Phew, that’s easy…

Last week American Express revealed plans to limit credit card sign up bonuses from those who have “abused” the system or received quite a few sign up bonuses in the US. The company added language to their terms and conditions which stated prior activity, previously closed cards and current cards would be considered in awarding any new, highly lucrative sign up bonuses, and this sort of language is likely to follow in regions around the world. The news sent the points and miles world into a spin, and Amex has now launched a simple, easy tool to confirm eligibility for any sign up bonus points, before you officially hit send on any credit applications.

How It Works

If you’ve already had a specific American Express card, when you fill out an application for that credit card, the new confirmation tool will process your info internally before actually running your credit. By doing so, it’s able to confirm if you’ll be eligible for a welcome bonus, before you waste a credit enquiry and have a “hard pull” done on your credit file. TPG ran tests on the new system, and found that it proactively warned that specific sign up bonuses would not be available, since the cardmember had already received one for that card. You’ll only get a pop up if you won’t be eligible, so if you assume you’ll eligible, expect for the application to go straight through to a final decision. It’s simply a heads up if you’re not going to get a bonus.

Enforcing Restrictions

This is a definitive move from American Express, signaling far more stringent criteria for sign up bonuses around the world. Sign up bonuses are one of the greatest customer acquisition costs, and “churning” of credit cards has cost banks tremendously as customers open cards, reap large bonuses, close and then reopen again – receiving yet another bonus. While this may be a sign of the times to come for many ardent churners, it’s certainly helpful that American Express gives a definitive answer before you waste a credit application. We’ll see if others follow…

What Other Card Issuers Are Doing

Chase has their 5/24 rule – where they won’t approve anyone for a card if they’ve opened more than 5 cards within the last 24 months. Certain cards seem to allow flexibility on this, while cards issued exclusively from Chase, such as the Sapphire Preferred do not offer wiggle room. Citi tends to allow new bonuses after 24 months, even if you’ve previously held, or currently hold the same card. American Express limits U.S. cardholders to one bonus per card, per lifetime. On the other hand, Bank of America allows repeat sign up bonuses, with just 90 days of separation, but limits cardholders to 4 personal cards at any time.

Have you tried the new bonus eligibility tool out?