Being a Good Amex Customer
A couple of days ago as part of the “Investor Day”, American Express made it clear that they are going after people who are “gaming” their rewards programs. Specifically, they are looking for loyal long term customers and not those who only get a credit card for the bonus.
According to the company they will, “…use our analytics and technology, surgically remove gaming and reinvest in higher-quality, more loyal new customers, achieving an acquisition efficiency gain on a year-on-year basis.”
The huge issue all of the banks face is how to acquire these great customers. One of the ways they have done this is through lucrative bonuses that also draw the attention of “gamers”. To counteract these people, companies like American Express have instituted bonus restrictions and rules. For example, Amex will only give you a bonus on each product once.
And it is working. From the investor call, “…our more conservative incentive structure and the controls we have in place have largely kept gaming rates constant over the last couple of years…”. These safeguards they have put in place are seemingly working. But they want to do better and their recent Amex Platinum card changes are a good example of this.
The Amex Platinum Changes
While many people complained about the enhancements American Express made to their Platinum cards, they were very deliberate in my opinion. Giving 5X points on bookings through Amex Travel and a $200 per year Uber credit (personal Platinum only) that is doled out monthly are moves to get you invested in the Amex ecosystem.
If you are booking through Amex Travel to earn your 5X then the company benefits from not only the travel revenue, but they also get you used to using your Platinum card for purchases. Same thing with the Uber benefit. They expect you will link your Platinum card to Uber and use it as a default. They are using strategies to convert you into a good customer. As someone who has family members who love their Platinum cards I tend to think this is working.
Be A Good Customer
If Amex wants customers who are blindly loyal and you want to maximize your return, then how can you become a good customer? Seemingly these two things are at odds. Or are they?
I can’t speak for everyone, but I think Amex has the perfect card that lets us have our cake and eat it too! Of course I am talking about the SPG Amex. This card will probably go away next year, but for now I am using my SPG cards (both personal and business) more and more. Not only do I get valuable offers, but I earn valuable Starpoints from everyday non-bonused spend.
Related: Highest Ever SPG Amex 35K Limited Time Offers Now Available
Strategize with Multiple Cards
I am guessing Amex doesn’t want to limit customers to just one card either. Amex has a great variety of cards with some good bonus categories, benefits and of course Amex Offers. For example you could be a good customer by using your SPG Amex for everyday spend and an Everyday card for gas and groceries. Maybe you have the Platinum too for the benefits of that card? The list goes on.
Conclusion
In a world where technology progresses and companies are more surgically focused on their bottom line, those of us who like to maximize value may have an uphill battle, but it isn’t necessarily a losing one. In my opinion you can be a good customer and still take advantage of awesome deals when they come along.
Bottom line, I’ll avoid their war on “Gamers” by not being one.
HT: Doctor of Credit for the Amex Investor Day info.`
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I’m sorry but i missed where you reveal your “Plan to Counteract the Amex War” in that giant post that was almost common sense… Normally your posts are better quality than this Shawn… What gives?
Just applied for the SPG Business card (I do have a small small business). Was called by AMEX to say I had 5 cards already (one being the SPG personal), and they would give me the SPG business card if I cancelled one of my existing accounts (all personal). I was under the impression that business and personal accounts were kept separate. Any ideas why they considered the number of personal cards I have?
No both personal and business credit cards count towards your limit.
I can understand AMEX’s war on gamers, but when they won’t pay bonuses on gift card spending, shouldn’t they take into account the fact that AMEX is not accepted by a wide variety of merchants?
Points Rule #1 as of now…..DO NOT MS AMEX for a spend down. Otherwise you are the gamer they want to get rid of.
SPG is great. Plat is great for car assist, car rentals (all Amex for that one), purchase protection. I had a flat a few weeks ago. Called Prestige, got voicemail and was put in hold hell. Hung up and called Amex. A human answered, took my info, called me back within 5 minutes to say a tow was on the way. Then the Amex rep called back when the tow couldn’t find the car. He called back AGAIN about 30 minutes later to make sure everything was resolved and I was okay. It was seriously good service. Big purchases (jewelry, electronics, furnishings, road bikes) I put on plat, just because. I suppose Prestige would be just as good.
But.
The fee hike is ridiculous, Delta lounges are the only real benefit I can still see going forward. If Amex added a 2x dining and 3x gas, I’d keep the card. But now it sits at the bottom of my wallet and will stay there until I close it. For daily spend I use Old Blue and Surpass.
AmEx offers very little I can’t get someplace else, and with less hassle. My strategy on avoiding the AmEx war on gamers is, in a nutshell, to boycott AmEx. Chase is your friend and poor Citi wants to be but doesn’t quite know how. Toss in the odd second-tier credit card account to round out your portfolio. Works for me.
Agree that’s the way.
Amex has definitely been shelled the past few years. Losing Costco was a big blow. If they lose SPG, or the SPG is devalued to the levels of Marriott charts, they will lose a ton of big spenders. I got a friend of mine to use SPG and he spends 300K a month min on that card. I think all the card companies dont want gamers. Look at Chase for example, they want to limit this as well. We also see the card programs stripping some benefits on high fee cards. Raising the Plat to $550 is significant. Ill keep the Amex plat business because 1.5 per dollar on 5K or more etc. …Also Shawn great Blog!
There are plenty of people who are not “gamers” by tranditional definition but who are not profitable customers. Who’s stopping someone with organic $10k/mo spending from getting the bonus and then not using the card?
The Platinum cards are pretty well known among anyone who’s points savvy as only good for affordable lounge membership. Just about every blogger starting with TPG has written for the past 5+ years how they have those cards for airfare credit and Centurion membership, and don’t actually put any spend on there. That explains the constant overcrowding in the lounges.
The MR program has become a joke and at the bottom of the heap, their cards have the highest annual fees and the least rate of acceptance. Outside of juicing bonus categories, why WOULD anyone use them on an ongoing basis unless they just didn’t know any better?
Shawn, you said it perfectly. “Bottom line, I’ll avoid their war on “Gamers” by not being one.”. Play by the rules, DO NOT MS the spend down, let them make a few bucks also and we can all be happy.
AmEx does have some decent cards. But who in their right mind is going to keep a Gold card after getting the signup bonus? $160 AF, sub-par rewards, no offsetting travel credit… If you only have cards that are worth putting continued spend on then you’ll cut down on the “gamers.”
2nd point: AmEx really needs to make their rewards structure easier to understand. Amextravel.com, FHTR, this Uber credit business, selected airlines, lack of desirable transfer partners and sub 0.01cpp cash value. They want rich but oblivious customers. They want to use improved analytics to weed out “gamers” but their customers are becoming better educated. Can’t have it both ways.
I can understand AMEX’s war on gamers, but when they won’t pay bonuses on gift card spending, shouldn’t they take into account the fact that AMEX is not accepted by a wide variety of merchants?
For example, I thought it would be no problem to meet that $5000 spending threshold for the bonus on the SPG card, as I could charge my monthly $780 insurance premium to the card. Then I discovered they won’t accept AMEX, but will accept any other credit or debit cards.
So now I plan on using the card to pay income and real estate taxes, but I’m wondering will those payments be considered “cash equivalents?”
Karen, call AMEX and set cash advance limit to zero(or as close as they will allow). Charge taxes. If it goes thru you should be good to go.
Thanks, Geoff, I’ll try that.
Do charge cards have a set cash advance limit, which can be set to $0 or as close to it as possible.
Karen please ignore(I can’t delete:). Sorry I seemed to read “cash advance” not “equivalents”. My bad.
All Amex needs to do is offer decent/competitive bonus categories to avoid gaming. Their Everyday card is a decent example that encourages top of wallet placement. But the reason why this consumer got rid of the card was the excessive use requirements (30 swipes a month) and weak transfer partners – just too much of a hassle vs the benefits.
The new Uber credit nonsense and impending fee increase was a prime reason I just downgraded my Plat to PRG – had Amex offered travel/dining bonuses instead (say 2x), I’d likely have kept the card and used it regularly. Instead, they’ve driven me to the competition who offers better/cheaper products. Just came back from a long (expensive) trip and my Plat was used exactly zero times. My Prestige was used daily.
I do like Amex and spend 7 figures on SPG every year, but presuming SPG goes away next year, my spend will drop precipitously on Amex products. Hopefully, they offer some sort of replacement product that doesn’t suck. But I have low hopes based on the crappy direction Amex has chosen the last few years. The only Amex card I might end up using is the Biz Plat in 2018 and overall spend will likely drop from 7 figures to low 6 figures. I presume many travel enthusiasts will see similar drop in Amex spending when SPG goes away.
Mse,
You really spend 7 figures on SPG every year? Wow you would have a decent business and you would have ton of points/miles.
“7 figures”?? Over a million dollars in one year? Savage.
What’s your credit line on SPG?
$25K. Recycle it 4-5x per month.
liar liar pant on fire!
LOL. you spend a million buck on hotel stays or events a year… and you are here complaining? lol. you should have the centurion card if you spend a million bucks a year on SPG ALONE! LOL.. you probably spend like 2-3 millions a year right?? LOL where is your centurion card? why are you only spending on everyday card or spg? LOL
if you spend a million bucks at SPG you should be there super duper #1 mega ELITE PLAT-Diamond-Meteriote Member!
LOL LOL
Huh? I don’t spend a dime at SPG properties. It’s all MS. Roughly $100K/mo.
I add all my bills to my Platinum and also link to my plastiq. I have my gold card for my groceries and gas and my SPG for the random things
Or the Everyday Preferred. Not a bad option either to use to keep a healthy relationship.