American Express has recently announced that as of May 1st, if you’ve previously had an American Express card (and that card is now closed), you will no longer be able to signup for that card again and get the signup bonus. 

As I’ve discussed in the past, the biggest perk of signing up for credit cards is the big, initial signup bonus the banks give you, say 50,000 points or miles for spending a certain amount of money on that credit card. With certain banks, like American Express and Bank of America, you could signup for a credit card, get that large 50,000 signup bonus and cancel it before the next year’s annual fee was up. Then in a few months, signup  for that same credit card again and get that large 50,000 signup bonus. Rinse, repeat and this is the definition of credit card churning.

However, with these new rules by Amex, this will effectively end credit churning for all American Express cards. Once you get a credit card from American Express, that will be the only time you’ll be able to obtain that signup bonus. This has two important ramifications:

 1. Consider applying for any American Express Card that you had previously NOW.  For example, if you previously had the Delta Gold Skymiles card but closed it last April, you should consider signing up for it again for the current signup bonus, which on that card is 35,000 miles. After 5/1, you will not be able to earn those 35,000 miles on that card.

2. Be more selective on when you apply for American Express credit cards. Now that you can only get the signup bonus once per card, you obviously want to time your application for the card when the signup bonus is the highest for the card. This might be difficult to predict but certain cards like the Platinum Card has seen 75,000 to 100,000 targeted offers and the Starwood (SPG) card typically increases to a 30,000 point signup bonus in August. In those situations, it might be best to wait for one of those offers to come along.

Lastly, the wording on American Express applications have already changed and seem to indicate this rule is already in effect. Per Dan’s Deal and others on Flyertalk, those rules still don’t effect until May 1st. I’ve pasted in the wording from the Starwood application as it stands now but until 5/1, you should still get the signup bonus but there is some risk and YMMV (your mileage may vary). And to be more clear, the application has to be approved by 5/1 so you should apply before 5/1 to allow time for your application to be approved.

That last paragraph is Bad News Bears

There is some risk you may not get the signup bonus – be prepared to accept that risk.This is not for everyone.

I recently completed a mini App-O-Rama for Andrea & I based on this Amex news – stay tuned for the next post on how we dealt with this news.