American Express Penalty Box: Getting Out

Introduction

There are several different “penalty boxes” with American Express, but they all share one thing in common: You get a pop-up telling you that you’re not eligible for some bonus due to your past relationship with American Express.

Getting In

There are multiple ways to get put into the penalty box, but all of them involve a single principle — you’ve done something that AmEx didn’t like. Known routes in:

• Closing or downgrading a card within the first 12 months of having the card
• Closing or downgrading a card within the first 12 months of a retention offer
• Closing or downgrading a card within the first 12 months of earning an upgrade bonus
• Too many card referrals to the same person

There are probably other ways in too, but data-points are sparse so it’s hard to find more patterns.

Getting Out

There are two known vectors out of the penalty box:

• Spend ($20,000 per month for a month or two, especially on a co-branded card)
• Time (1-2 years)

Spending on Membership Rewards earning cards seem to be less likely to get you out, while co-brand cards like the Delta or Hilton cards are more likely to get you out. The likely reason that AmEx purchased a bunch of co-brand rewards points and gets to remove some of them off of their books, improving their overall balance sheet.