How to avoid Amex Clawbacks

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:

 

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Ben
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Ben

How does AMEX know if you are purchasing gift cards? If I bought some from a grocery store along with my grocery purchases wouldnt they be none the wiser?

Geoff
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Geoff

Agree. We got jammed with the 100K clawback(done solely with VGC’s). My bad. Now, like Ben says, we mix the gift card(s) in with groceries to get a variable amount, not $505.95:).
I also find it odd that AMEX offers their logo branded gift cards on their site(often sans “purchase fees”) but won’t allow purchases of Visa/MC’s to count for bonus spending.

Ken
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Ken

Amex can usually see line item details about what you buy if they want to dig. But if you’re buying from somewhere like Raise.com they’ll easily know that you’re buying GCs. Or if you have multiple $506.95 purchases they can pretty easily determine what those are.

Rick b
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Rick b

Gift cards are a legitimate business expense for many businesses for marketing. are they really now going to police what people buy even on business cards? This is ridiculous. If it’s not category spend abuse why do they care if I buy GC or other spend anyway? They get the same fees.

Rich
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Rich

I wish I could find the original post when the 100k deal went live and then down in a few hours. I predicted that they would claw back. Nobody believed it.

Michael
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Michael

Why would it be here? Gretg doen’t get paid when he upsets his corporate overlords!

Bob
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Bob

I am tired of going on free trips anyway! I get home from these vacations and the lawn is not mowed, we don’t have any groceries, laundry needs to be done, etc.! Credit card points are driving me nuts. We have a weekend trip planned to Orlando. The hurricane will let me stay home and lay on the couch! 🙂

AlohaDaveKennedy
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AlohaDaveKennedy

Meh – goblin claws are not skeletal as your picture suggests. Refer to pictures of Griphook at Harry Potter’s Wizarding Bank. You need to use a more realistic picture of an actual goblin claw to be politically correct and not offend our dear friends in the back office of AMEX.

Michael
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Michael

Kickfurther/Kiva are not MS. It is gambling, pure and simple. I imagine you always win every time you gamble Greg. And you pay for it with your credit cards. The fact that you don’t put caveats on these methods makes me wonder if you get Kickbacks ala the Points Guy.

VERY YMMV. Personally I’d avoid.

StartSpreadingTheLove
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StartSpreadingTheLove

correct. If the economies in these under developed countries crater like Venzeula you will lose all your remaining monies. For someone to suggest you put your spend for a bonus on Kiva is insane in so many ways.

StartSpreadingTheLove
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StartSpreadingTheLove

Hey I still need your CC sign ups. Dont stop doing business with companies that have no morals. Keep hitting those links baby.

Michael
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Michael

Yep

JC
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JC

If you play the game the right way, you wouldn’t be so bitter.

R
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R

‘StartSpreadingTheLove says’

Chill, dude. I lost 100 k MR points too but I signed up using a link which was not supposed to be public and I met my spending using MS. Tough luck! This is a game…if you don’t have qualms about taking advantage of the rules, why blame the banks?

stvr
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stvr

Why would buying merchant gift cards be considered a form of cash equivalent?

Ken
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Ken

@stvr – Because it’s as good as cash for that merchant.. MOs, GCS, they’re called cash equivalents for a reason.

Terry
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Terry

Easy American Express points are over. Read their updated language, it no longer effects just bonus- you will not earn points for buying gift cards or pre-paid cards. Just wait until all those points are clawed back. Oh the humanity!!! AMEX MS at your own risk!

Roy
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Roy

@@sholes clawed back my 100k points after I closed my account on Aug 30..but I only did it because the points were frozen and I didn’t know whether they would clawback later or not (like many said it happen on FT). So they dint give me a chance and I didnt give them my $450. Fair enough.

Nate
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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

trackback

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

P
Guest
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.

trackback

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

Zephyr
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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 ..

TimmyD
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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?

chris hitchens
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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

trackback

[…] 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. […]

kevin
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kevin

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

trackback

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

trackback

[…] 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. […]

Joey
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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.

Army (ClimberMonkeysAbroad)
Guest

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
Guest
Ken

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

Army (ClimberMonkeysAbroad)
Guest

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! =/

Ramon
Guest
Ramon

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