American Express has some of the most lucrative and valuable cards in the points and miles world. While this is great for consumers, such value can be costly for the bank. Therefore, they have implemented several card application rules to prevent customers from taking advantage. Amex currently has 18 personal cards and 14 business cards, giving consumers many options.
This post will only discuss card application rules. Amex also has rules for authorized users, transferring points, and other sub-topics.
Once Per Lifetime Rule
This is the most infamous and restrictive of Amex’s card application rules. The Once Per Lifetime Rule disqualifies you from getting a card’s sign-up bonus if you currently have or previously had that card. It doesn’t matter if you hit the bonus or not. The fact that you’ve previously had the chance to hit the bonus is what counts.
For example, I hit the sign-up bonus for my Blue Cash Everyday card when I first got it. Therefore, I would not be able to get that bonus again because I have that card.
Product changes, upgrades, and downgrades also count towards this rule. You give up the chance to earn the new card’s sign-up bonus if you switch from one card to another. For example, if I upgraded my Blue Cash Everyday to the Blue Cash Preferred, I would not be able to get the latter’s bonus.
Sign-Up Bonus Denials
American Express added some strict “anti-churning” clauses in their Terms and Conditions in 2018. One of these clauses states that Amex has the right to take away a sign-up bonus if they see certain behaviors. Some of these behaviors include the following:
- Buying cash equivalents
- Peer to peer payments
- Closing accounts that are less than 12 months old
Buying cash equivalents is a hallmark of manufactured spending. Amex has access to data that tells them what you buy on their cards and where. This is called Level 3 Data or Third-Level Data. This means that they can see if you purchase gift cards from places like pharmacies or grocery stores. Simply avoid buying gift cards when using an American Express card.
Peer to peer payments are when you use services like PayPal to send money to friends and family. Amex can see whether you’re making a retail purchase or engaging in peer to peer lending because of their Level 3 data. Just remember that retail purchases via PayPal are fine, but peer to peer lending is not.
Furthermore, closing relatively new accounts makes Amex think that you applied for one of their cards only for the sign-up bonus. This is a clear indicator of “churning” for them. Doing this even once has blacklisted people from ever applying for another Amex card.
Sign-Up Bonus Eligibility
Upon applying for a card, you might have seen a pop-up saying that you’re not eligible for that card’s sign-up bonus. That pop-up also asks you if you want to proceed with the application despite not being eligible.
Many people wonder why this happens. One possible reason is that you have done one of the three actions mentioned in the “Sign-Up Bonus Denials” section. The other possible reason is that you’re not putting enough spend on your other Amex cards recently. Amex doesn’t see you as a person that needs another card if your current cards with them are unused.
5 Card Maximum Rule
The 5 Card Maximum Rule states that one person can have a maximum of five credit cards at one time. Both business and personal cards are included in the five-card total. Cardmembers with five cards must call in and close one of the five cards before opening a new one.
Charge cards (Green, Gold / Rose Gold, and Platinum) are exempt from this rule. You can have as many charge cards as you want. But its common to have fewer than five charge cards because there are not that many charge card options.
This rule matters more for travelers than cash back enthusiasts. Cash back enthusiasts only have three options from American Express. However, most of Amex’s credit cards are travel related.
1/5 Rule and 2/90 Rule
The 1/5 Rule and the 2/90 Rule govern how many American Express cards you can apply for within given time periods. These rules do not affect charge cards, meaning that you can apply for as many of them as you like.
The 1/5 Rule states that you can apply for one credit card within a five-day period. Furthermore, the 2/90 Rule states that you can apply for no more than two credit cards within a 90-day period.
Soft vs Hard Pulls
Amex is known for doing soft pulls for current cardmembers who wish to get another card. Soft pulls are one of the often-overlooked benefits of having an Amex card. The optimal strategy for current cardmembers is to get one card that they have never had before. If they want to get a second card, they should wait at least one week before applying.
However, Amex does a hard pull for new cardmembers applying for their first card. This is normal as every other issuer handles new applications this way. The optimal strategy for new cardmembers is to apply for both a charge card and a credit in the same day. Amex will use the same hard pull and you can get two cards. You will circumvent the 1/5 Rule and get two great cards.
American Express has some of the most valuable cards in the points and miles world. Take heed in their card application rules and American Express will treat you well.
Those who are new to credit or points and miles should look at Chase first. This is because of their 5/24 Rule. However, those who are more established (and already have Chase cards) should apply for new Amex cards slowly and with a purpose. These profiles are likely above 5/24, making Amex the next frontier. Be sure to have a reason for applying for any Amex card. This way, you won’t prevent yourself from getting another Amex sign-up bonus in the future.
For everyone, make sure that you write down the date that you got approved for your new Amex credit card(s). This way you can know when you’re eligible to apply again. Furthermore, this tip especially applies if you want to get two Amex cards within a 90-day period. You can circumvent the 1/5 and 2/90 Rules by simply knowing when to apply.