How to avoid Amex Clawbacks

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avoid Amex ClawbacksLast week I told the story of an Amex Platinum 100K offer that has led to many clawbacks.  Amex never intended for the offer to go public and so they found every excuse they could to claw back points.  Reasons given included all of the following:

  • Gift card purchases
  • Improper returns
  • Once per lifetime rule
  • Closing the account too early

Many readers are understandably upset and have declared that they’re done with Amex cards altogether.  I think this is a mistake.  In the US, the vast majority of great signup offers come from Amex and Chase.  Given the fact that Chase’s 5/24 Rule limits most people’s ability to signup for many Chase cards, Amex remains an excellent option.  Yes, Amex enforces their “once per lifetime” rule with most signup bonuses, but they have a lot of cards one can get before running out of options.  And some cards have benefits that make them worth signing up for a year even without a bonus.   And, don’t forget that Amex cards are key to huge shopping savings thanks to Amex Offers.

Rather than giving up on Amex, my recommendation is to practice safe signups instead…

Avoid Amex Clawbacks

There is no clear evidence yet that Amex will routinely enforce the types of clawbacks that occurred with the infamous Platinum 100K offer, but it can’t hurt to assume the worst.  Here’s how to practice safe Amex signups…

Don’t buy gift cards or other cash equivalents until after receiving your signup bonus

Amex signup offers routinely include the following language (underlining is mine):

The following charges do NOT count towards the Threshold Amount: fees or interest charges; balance transfers; cash advances; purchases of travelers checks; purchases or reloading of prepaid cards; or purchases of other cash equivalents.

Since gift cards are prepaid cards, you should avoid them. In most cases, you will earn points when purchasing gift cards, but those purchases are not supposed to count towards your new card’s signup bonus requirements.  In practice, such purchases usually do count, but doing so will leave you vulnerable to clawbacks, however unlikely they may be.

Don’t buy anything that you are likely to return until after receiving your signup bonus

A common trick for meeting spend requirements is to make large purchases and then return those things after receiving your signup bonus.  Don’t do this.  Amex (and other banks) are aware of this tactic and they understandably don’t like it.

Unfortunately, sometimes you may legitimately need to return things.  In order to avoid the appearance of doing something wrong, if at all possible, avoid returning anything bought while meeting minimum spend requirements.

Keep your new card for a year before closing the account

Some credit card churners like to cancel their new cards as soon as they’ve received the signup bonus.  If done fast enough, its possible to avoid annual fees this way.

Don’t do this.

Safe options for meeting minimum spend

Many people rely on gift card purchases as an easy way to meet spend requirements, but I just advised against doing so with Amex cards.  Instead, consider the following options:

 

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Ramon

Is this rule only related to Amex cards that offer MR points or any Amex Card (ie. Hilton, Delta, SPG)?

I tried talking to a supervisor, but I was told that an “MR specialist” (in a different department) has to look into the issue first.

So… I actually called back last week to check on the status of when I’ll get my points returned… lo and behold, the rep told me that they had no record of this complaint (and therefore no record of them telling me that I’ll get my points back). I had to start the entire complaint all over again. I’m actually angry that I couldn’t get a written record of being told that I’d get the points back. I filed a CFPB complaint also but haven’t heard back yet (but it’s only been one week since I filed it).

I’m so frustrated because my fiance and I were really counting on this 50K points to help pay for some of our airfare next year when we move abroad to become digital nomads. I know you shouldn’t count your chickens before they hatch, but we already had those points in our accounts! =/

Amex clawed back my 50K sign-up bonus (which was through a public offer). I use all my cards organically and didn’t put any GC purchases on it (although I did have to return some climbing clothes because they didn’t fit). Even still, a grand total of $6k (which is way above the $5k required spending) was put on the card before the 3 month window. They insisted that I called in to cancel my MR account, which I absolutely did not do (ludicrous!). When I demanded they prove that I made this call, they told me they’ll return the points within 8-12 weeks. It’s been 14 and I still haven’t gotten my points back. So shady. I transferred most of my MR points to Krisflyer after that – it just makes me too paranoid knowing that credit-card related points can pretty much be taken away without notice or reason.

Ken

That’s BS. I’d be filing a CFPB claim. 14 weeks?! Ridiculous.

Joey

I just applied for and received a new Amex card (the Blue Business Plus), and I remembered reading about clawbacks in the past so I searched for and found this page. Have clawbacks been limited only to signup offers that weren’t supposed to be public? I know that Amex reserves the right to enforce the rules for any offer, but I’m just wondering how widespread the clawbacks have been.

[…] Since gift cards are prepaid cards, Amex could legitimately withhold a signup bonus if you buy gift cards as a way of meeting a new card’s minimum spend requirements.  In fact, Amex has occasionally used this clause as an excuse for clawing back signup bonuses.  In practice, gift card purchases usually work out fine, but there is some risk.  See: How to avoid Amex Clawbacks. […]

[…] I’ll meet minimum spend without buying gift cards.  See: How to avoid Amex Clawbacks. […]

kevin

so what happens when amex claws back the points and you cancel the card?

kevin

sorry-I meant if the clawback takes you negative on MR points

[…] There are many ways to meet that spend requirement (see: Increase credit card spend (and get most of it back). What still works?), but the ideal approach is to avoid purchasing gift cards.  Amex’s terms state that prepaid cards (i.e. gift cards) are not qualifying purchases.  See: How to avoid Amex Clawbacks. […]

chris hitchens

Frankly, i am sad to see how many try to screw AMEX. Amex is a very respectable company and their customer service is top notch in every way. I do not think them asking you guys to spend money…legitimately is alot to ask. I will always give my heart to amex

TimmyD

Do you think that this attention to GC’s for Min Spend requirements is just given to the Platinum cards, since they are handing out so many points lately? I wonder if I am safe buying GC’s with an Amex Delta that I need to meet the spend on. Any data points of claw backs on anything that is not a Platinum?

Zephyr

Just wondering if you know how to avoid losing cash back rewards due to the “$25 incrementation” rule of Amex Blue Cash Everyday Preferred? I have $110 but only can redeem $100 ..

[…] Ratings Avoiding Amex Clawbacks Review on new AMEX Platinum changes Amex Business Platinum 50% […]

P

Is this all kind of gift cards? So, I can’t buy Petco gift card for a friend who just got a dog? Costco cash card? Amazon gift cards?
Or when you say gift cards, you’re talking about VGCs, Onevanilla, Amex, and others.

[…] Beware of any tricks for meeting minimum spend or avoiding the first year annual fee.  Please see: How to avoid Amex Clawbacks. […]

Nate

I used to just do Simons or Macerich malls visas to meet Amex bonus requirements. Statement line item always shows as the name of the mall.

With all the claw backs, curious if anyone has had recent success receiving bonus with purchase of visas from Simons or Macerich malls?

Thanks