AmEx cardholders report account closures
Over the past week, reports have revealed that American Express closed accounts en masse. There have been reports of shutdowns over the years since AmEx, so this isn’t the first round of shutdowns. Although we are not exactly sure of the reason, based on this Reddit thread, the practices that AmEx might consider abusive were at least partially responsible.
Why have some accounts been closed?
Based on the self-reports from the forums we analyzed, the reasons for the closures were as follows:
Self-referrals for credit cards.
Purchase gift cards to meet minimum spending for welcome bonuses on credit cards.
Purchase gift cards to maximize AmEx offers.
Misuse of the AmEx time-based payment feature.
Self-referrals seem to be the most common culprit. AmEx offers referral bonuses on its credit cards ranging from 7,500 to 15,000 points for each respective card. If you have an AmEx credit card, you can log into your account and view your individual offer to refer a friend to that card. You will earn a referral bonus once your friend is approved, and your friend will earn a welcome bonus after approval.
A self-referral is when an individual refers to a credit card and pockets both the referral bonus and the welcome bonus.
It appears that AmEx performed an account scan to identify users who benefited from self-referrals, and removed all points associated with those referrals. Some users who did a lot of self-referrals ended up with negative Membership Reward balances, which seemed like another red flag for AmEx. After going negative, it appears that these accounts have been closed.
The bright side (if there is one) in this situation is that a user reported that despite closing their accounts, they were able to transfer all Membership Rewards points to an airline instead. to lose them. Obviously, a speculative point transfer is generally not a good idea due to the risk that unused miles or points could devalue over time; however, in this case there was not much to choose from.
The bottom line
AmEx seems to repress (again) behavior that it considers abusive. There is no way of knowing exactly what triggered this round of closings and what the exact criteria were for selecting which accounts to close. In the interest of keeping your account in good standing (and keeping your Membership Rewards points), it makes sense to break the rules.
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