Friday Followup: American Express Shutdowns

It’s been a couple of weeks since I’ve seen any credible reports of American Express shutdowns. As a (hopefully) final follow-up to the most recent round:

  • Adam Winslow no longer works at American Express. His last day way Monday, October 18; I think this didn’t happen simultaneously with the shutdowns because there’s more legal red tape in employment law than for shutting down credit card account holders, and that took time.
  • All credible shutdown reports that I’m aware of involved at least a single card opened with Adam. The most unfortunate data point I have on this is for someone that opened a single Platinum card as their first and only card with American Express through Adam in early 2019 and then was shutdown in the second wave.
  • As a corollary to the above, I’m still not aware of any shutdowns in the last wave for anyone that never opened a card with Adam.
  • There was a report at Forbes of a successful reinstatement of AmEx cards for one Adam-related shutdown, later however, the author later reported that the reinstatement was short-lived: A few days later it was reversed and all the cards were gone again.

So, is there risk in engaging in shenanigan-like behavior? Absolutely, there always has been and always will be when you’re interacting with a bank with manufactured spend, gift card purchases, upgrades, downgrades, retention offers, or a litany of other strategies. We’re never completely insulated from a shutdown, but here is what I do to try and stay in American Express’s good graces:

  • Don’t try and bypass limits implemented by the American Express business logic (in other words, if an offer doesn’t appear for me when I click on a genuine AmEx link, then it doesn’t apply to me at that time.)
  • Don’t try and open more cards then the American Express limits (10 charge cards and 5 credit cards), though I’m actually currently at 11 so we can see how well I’m following my own advice
  • Don’t spend big multiples of my stated income or business income on American Express cards
  • If you take a retention offer, hold the card open and don’t downgrade for at least 12 statements
  • If you take a card upgrade, hold the card open and don’t downgrade for at least 12 statements
  • Don’t use a mailer with an offer code targeted at someone else

Of course, it’s possible that you could do none of those things and still be shutdown, or do all of them and keep accounts open forever. While we do have some inside data on how American Express systems work, we don’t have all the data and those systems can and do change, so what worked and was safe yesterday might be awful today.

So, if you’re not shutdown go out and enjoy your weekend and put all of this behind you. If you are shutdown you have my condolences, but you should do the same thing. Remember, there are literally thousands of banks out there that will cushion your fall from American Express’s grace and will reward you for your business.

The cushion provided by your local credit union to soften the fall from your American Express shutdown.

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