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American Express has updated the terms on its credit cards. The added terms and conditions are related to new accounts, their associated bonuses and your first year of card membership. The new terms (bolding our emphasis) are as follows:
If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit Membership Rewards points to, we may freeze Membership Rewards points credited to, or we may take away Membership Rewards points from your account. We may also cancel this Card account and other Card accounts you may have with us.
These terms are from a Membership Rewards earning credit card; however, you'll see similar terms across other American Express card products as well.
What This Means
The changes affect three key areas:
- Amex can take back a bonus not intended for you. So if you find an offer following a link not intended for you, it could result in you losing any awarded bonus.
- Amex reserves the right to take back welcome bonuses if you cancel the card within 12 months of opening your account.
- Amex also reserves the right to take back bonuses and close your accounts, if you cancel or return purchases that were used to meet the minimum spending requirement.
The change in wording, while strong, is not a big surprise. American Express is taking steps to protect itself and identify the terms and conditions it expects from its customers. Each one of the three changes serves this purpose.
Firstly, a targeted bonus is designed to attract specific clients. If you're not one of those people, the bonus isn't for you.
Secondly, credit card companies want to establish long-term relationships with reliable clients. The welcome bonus offers, while lucrative, are not necessarily the strongest aspect of a card product (for example, with The Platinum Card® from American Express you can earn 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel. 5X Membership Rewards points on prepaid hotels booked on amextravel.com.). While the welcome bonus offer is enticing, the company wants to build ongoing relationships by offering an overall strong product.
Lastly, any transaction has three parties: the seller, the buyer, and the credit card company. If you cancel or return the goods, the seller has their goods/services returned, the purchaser has their money returned, so it is only fair that the credit card company has their points returned also. Sounds like common sense, but spelling them out doesn't hurt.
While the language change is new, this is not particularly surprising since credit card companies have reserved the right to take back points/close accounts that they suspect are being abused.
Source: One Mile At A Time
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