For most people, credit cards are simply a convenient means to an end. They’re financial tools that allow them to buy that dress, television or even that European vacation. But for others, the side perks and bonus incentives credit card issuers offer up to draw in new customers aren't just the cherry on top of the sundae, but the ice cream, fudge, nuts and whipped cream, as well. These credit card enthusiasts spend hours poring over terms-of-service agreements and consulting spreadsheets to maximize the value they can extract from the sign-up bonuses that come with obtaining new credit cards, canceling said cards after reaping whatever introductory benefits or rewards offered, and repeating the process with a new card like a horde of locusts.
This hobby, known as “credit card churning,” is defended on Reddit boards and other digital nooks and crannies as simply taking what is being offered by credit card issuers, who in return have been looking for ways to slow down the gravy train. The latest effort comes from American Express, which added an innocuous-sounding couple of sentences to the offer term of all of its credit cards. "Welcome offer not available to applicants who have or have had this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.”
For churners who obsess over sign-up bonuses and welcome offers, American Express's bland legalese was tantamount to a declaration of war. If, for example, a churner signs up for a card with the expectation they will receive a hefty welcome bonus in points or cash back, then there's not much point to the whole enterprise if Amex can simply deny you that bonus.
Even worse from the perspective of churners is what they feel is the arbitrary nature of whom gets denied sign-up bonuses. How many cards do you have to have already opened with Amex to get flagged? In what time period? What about how many cards you have canceled? Is there a formula, or does someone at Amex's head office slaughter a bull and read its entrails? The credit card issuer has alleviated some of those concerns by alerting anyone signing up for a card whether they are eligible for the welcome bonuses before proceeding with a credit inquiry.
Doubtless, over the coming weeks, churners will put their heads together and compare notes to determine what level of churning activity triggers Amex to rescind welcome bonuses for future cards. And Amex is just as certain to eventually push back when they discover churners have gamed the new rules. If constantly checking the fine print of offer terms, exchanging long emails with customer service representatives and gambling with your credit score sounds like a great way to spend your weekend afternoons, then more power to you. But for the rest of us, Amex's new clampdown is a reminder that churning isn't a simple or relaxing way to engage with your credit cards, but a somewhat-grueling diversion where you have to stay one jump ahead of the banks. Maybe it's better to take up golf instead.