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Oh the drama!

Everyone knows the term “earn and burn” but a large subset of credit card customers prefer “churn and burn”. The term is just how it sounds. Get a credit card and with an enticing sign up bonus, cancel the card, get the bonus again. U.S. Credit card companies have taken action in recent years to reduce customers ability to “churn and burn”, restricting most credit card sign up bonuses to once a lifetime, per card. As if that wasn’t enough, American Express has just fired a further shot across the bow, with wording suggesting that abusers may lose out on future sign up bonuses, even if they’ve never had a card before.

What’s Happened

Doctor of Credit unveiled new language in the American Express (US) terms and conditions for card bonuses. The new language states “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.”  One could roughly translate this to: if we think you abuse the system, we’re within our rights to withhold a card bonus from you, even if you’ve never had the card. What’s perhaps most interesting is that American Express will look not just into cards you have open, but also cards you’ve closed to determine bonus eligibility.

In Practicality

In practicality this won’t affect 95% of people reading this. But with that said, welcome bonuses are one of the greatest customer acquisition costs for credit card companies, and eliminating the need to pay out lucrative bonuses to people who’ve already had cards would greatly improve any balance sheet. For that reason, it’s blatantly obvious why the intent to further restrict customers from receiving these points treasure troves exists. This new bonus rule seems intentionally vague, simply paving the way for American Express to take action against extreme abusers. Could future, more concise language follow? Of course it could. This may not mean the churning game is over, but only a fool would ignore the obvious implications of the warning.

In Line With UK American Express Warnings

American Express has taken a far more liberal approach to repeat sign up bonuses in the United Kingdom. Customers are able to close any given card, such as the wildly popular British Airways Premium Amex, and receive a new sign up bonus after just six months. It was reported earlier this year that American Express was strongly considering an end to the “churnability” of their cards. Today’s news only lends fuel to that fire. On a positive side, the end of churning may stop airlines from continuously devaluing their points charts. Only time will tell.

How do you interpret this news?

Gilbert Ott

Gilbert Ott is an ever curious traveler and one of the world's leading travel experts. His adventures take him all over the globe, often spanning over 200,000 miles a year and his travel exploits are regularly...

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7 Comments

  1. Good. About time this happens. It’s absolutely disgusting some of the “abuse” that goes on by the churning community. Eventually it’ll ruin things for everyone and we won’t have any sign-up bonuses.

  2. Terrible customer service from Amex. They’re the ones that enabled this kind of “abuse”. They need to own up and stop blaming the customer.

  3. I had a Costco AmEx card – not my fault it got closed. Then I got a Delta card, with a low (30K) sign-up bonus. Through neglect, I ended up paying for it the second year, before dropping. I was surprised to see they really were offering me a second round with the Delta card, with a 75K bonus. I’m thinking I’ll pay to keep it a second year in case AmEx makes their future cards more appealing *anywhere/everywhere* I use a card. Then maybe I’ll think about dropping the Chase VISA SR for an AmEx platinum. But right now, it’s on AmEx that I don’t use their cards.

  4. I love how a lot of people try to “turn this around” and blame the credit card companies for bad service when they are the one’s “earning and burning”. Not only do these people think it is their right but they have convinced themselves that they are in the right. People are dumb.

    1. Well said. On another forum, there is a jerk that MS’ed the hell out of Amex, got caught, and wrote all these stories about the dishonest, unethical Amex…..he got back in again, then advised a friend to buy some GC’s for his spend down….. now they are both busted, him for a 2nd time for his stupidity and stubborn nature, and once again he says he is suing Amex, blah blah blah. Fools like that should be turned into dog food.

      1. Hey Chris, would you mind hitting me with a PM or EM to help me understand something? You seem pretty knowledgeable. If yes I’ll add em.

      2. Hey Chris, would you mind to PM or EM me, I’m trying to understand something related and you seem pretty knowledgeable.
        If yes, I’ll add em if needed, just let me know! Thanks

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