SRQ: Does A Credit Card Annual Fee Count Toward The Minimum Spending Requirement For A Bonus?

by on April 28, 2013 · 8 comments

in American Express, Credit Cards, Sunday Reader Questions

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A TPG reader approached me at the Freddies the other day to share a tragic story of major points bonus gone awry. Here’s what she told me:

“Back in January, I applied for and got the Platinum Card from American Express during the limited-time offer of a 100,000-point sign-up bonus. You got 100,000 Membership Rewards points when you spend $3,000 in the first 3 months.

I kept careful track of my spending and as the 3-month mark approached I was closing in on the $3,000 spending requirement and passed it when the card’s annual fee of $450 was billed on my statement.

I figured I was set and just called Amex to make sure my points were pending and an agent there said they were, though my online account didn’t have that information.

Cut to a month later, still no points. I call Amex back and ask what happened to my bonus and I was told that the $450 annual fee doesn’t count towards the minimum spending requirement, so no bonus…and I’m out $450!”

This 100K offer from January was an amazing deal - if you could hit the minimum spend.

This 100K offer from January was an amazing deal – if you could hit the minimum spend.

Now a lot of you might be saying, this person should have read the terms more carefully because the annual fee never applies towards your minimum spending requirement, and you’d be right, but this is a situation that a lot of folks find confusing.

To be clear: the minimum spending requirement is based on purchases only, not on the annual fee, balance transfers or any other fees (like balance transfer fees).

For example, in this case, the Amex Platinum’s terms stated that to receive the 100,000 Membership Rewards points, “You must charge $3,000 of eligible purchases on the Platinum Card within the first three months of Card membership to earn the 100,000 points.”

So the annual fee is not an eligible purchase, it’s exactly what it says, a fee.

I can’t blame this person for wanting to get in on a 100,000-point bonanza since the spending requirement was really low for an offer this large, and that’s the highest bonus we’ve seen from Amex in quite some time, though the Business Gold Rewards card currently offers a bonus of 50,000 points when you spend $5,000 in 3 months (there were 75K offers on the card in January and March) and 50K on the Premier Rewards Gold back in February.

However, this is a good reminder to us all that the terms and conditions of credit cards are extremely important and specific, and it bears reading them carefully in order to ensure that you get the bonus you want and deserve. This learned that lesson rather expensively!

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Dave L

    Well the person isn’t out $450, since that was spent money. They are out the bonus, which is even worse. They can still get ~$400 back by buying airline gift cards as previously discussed.

    I’d call it a win for the big guys, which doesn’t happen too often around here. If you play often enough you’ll lose a battle here and there. I’d guess a somewhat significant percentage of people had the same problem she had.

  • Lively

    Yeah, I always make sure I spend $200-500 over the minimum spend, just in case….

  • Jack

    The same problem “she”had???
    Unless I am missing something, I don’t find any kind of indication of the gender of the reader. Why do you assume this is a woman?

  • Eddy

    Last line of 1st paragraph: “Here’s what she told me:”.

  • Allen Lo

    Credit card companies are not always in favor of people just “spending the minimum.” The platinum card is really geared towards an elite group–I’m not surprised they didn’t just scoff at you on the phone (but they didn’t, since they have great customer service, Marriott has done that before when they were talking about customers doing that). Sorry to hear that this reader didn’t make it as it is ALOT of points, but it’s still a great card to own even at breakeven to the annual fee.

  • MileHunter

    I would suggest that the reader call Amex Executive desk and ask to see if they can make a one time exception and award the 100K bonus miles anyway. This might work. If the executive desk doesn’t agree, the reader can still cancel the card and ask for a prorated refund even after having bought $200 worth of gift cards this calender year

  • acs

    Epic reply

  • Mel Gibson

    Obviously because women are bad at math. DUH!

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