Amex Clawed Back My Welcome Bonus — Reader Mistake Story

Aug 2, 2019

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Today, I want to share a story from TPG reader Mimi, who was penalized for downgrading a credit card account prematurely:

I received an e-mail from American Express informing me they had removed points from my account because I had “engaged in abuse, misuse or gaming in connection with earning or using points.” Sure enough, I logged in to find 25,000 points gone, so I called Membership Rewards and asked to speak to a supervisor. He informed me they took back the welcome bonus from my The Amex EveryDay® Preferred Credit Card from American Express because I had downgraded it to the EveryDay Card within 12 months of opening the account (it had been almost 11 months). I explained the only stipulation I remembered for earning the bonus was spending $2,000 in three months, but he said the rest was written in the small print that came with the card.

I had decided to downgrade my card to the no-fee version because I was struggling to use the card 30 times each month to get the 50% points bonus, so two or three days before the end of the billing period, I would end up making purchases I really didn’t need just to reach the threshold. I decided after reading a TPG article that The Blue Business®️ Plus Credit Card from American Express would work better for me, since it offers 2 points per dollar on everything* — I run a business as a freelance artist, so I would qualify as a sole proprietor.

I have a long history with American Express and have always been in good standing with them. I have also held on to some of their cards for years, so the language used was unsettling, since I had no intention of “abusing” or “misusing” the program. The card just wasn’t a good fit for me. I’m also surprised and disappointed that they seem completely unyielding about their decision. The best I could do was file a report to have them possibly reconsider the decision, but the representative didn’t sound hopeful.

Of course, I also regret that I didn’t pay more attention, and I hope this will help someone else avoid making the same mistake.

*on the first $50,000 in purchases per calendar year; then 1x

The information for the Amex EveryDay Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

In July of 2017, American Express began adding terms to warn cardholders of possible repercussions for “abuse, misuse or gaming” of welcome bonus offers. Those terms give Amex latitude to withhold and rescind bonuses or even close accounts for activity that might be interpreted as a violation, including downgrading or canceling a card in the first 12 months. Since Amex has sole discretion over how these terms are enforced, some unsuspecting cardholders have been penalized even if they had no intent to take advantage of the system. I think these rules are overly harsh, but at least they’re clear from the outset. To protect your rewards, make sure to keep your cards open and in good standing for at least one year.

Mimi failed to note the full terms of the welcome bonus offer, but she may have been making a more costly mistake by purchasing items she didn’t need in order to earn more points. That approach pays off in limited circumstances — namely, when the rewards significantly outweigh the purchase amount — but spending more to earn more generally defeats the purpose of earning rewards in the first place. There are other strategies that may help you hit the transaction threshold on the EveryDay Preferred card, but if you’re struggling to qualify for the 50% bonus each month, then like Mimi, you should look for another card that better suits your needs.

Related: American Express Is Clawing Back Points from Self-Referrals

I appreciate this story, and I hope it can help other readers avoid making the same mistake. In appreciation for sharing this experience (and for allowing us to post it online), I’m sending Mimi a gift card to enjoy on future travels, and I’d like to do the same for you. Please email your own travel mistake stories to info@thepointsguy.com, and put “Reader Mistake Story” in the subject line. Tell us how things went wrong, and (where applicable) how you made them right. Offer any wisdom you gained from the experience, and explain what the rest of us can do to avoid the same pitfalls.

Feel free to also submit your best travel success stories. If your story is published in either case, I’ll send you a gift to jump-start your next adventure. Due to the volume of submissions, we can’t respond to each story individually, but we’ll be in touch if yours is selected. I look forward to hearing from you, and until then, I wish you a safe and mistake-free journey!

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Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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.