A rewards influencer in New York found a loophole this year. Chase was handing 5,000 courtesy points to Sapphire cardholders after a World Cup ticket site crashed. He told his more than 200,000 followers that Chase wasn’t always checking who had really tried to buy tickets. Soon after, he said, Chase shut down two of his cards for points abuse. He apologized in a later video and moved his points to other accounts. The cards didn’t come back.
The Journal’s Ben Glickman and Oyin Adedoyin call it a dance. On one side are points junkies with spreadsheets and calendar alerts. On the other are banks that patrol for every new trick. The programs keep getting richer as banks fight for big spenders with ultra-premium cards. That draws more people who open a card, grab the bonus and never spend another dime.
So the banks are tightening up. Citigroup (C) now allows one sign-up bonus a lifetime on its Strata cards. JPMorgan Chase (JPM) did the same for Sapphire last year. Chase also has its 5/24 rule. Get approved for five or more cards from any issuer in 24 months and Chase won’t approve another. American Express (AXP) has a team that hunts for abuse and claws back rewards, or closes the account. Platinum holders who want free lounge access for their guests now need to put $75,000 a year on the card.
The pros get turned down too
Clint Henderson is managing editor of the rewards site The Points Guy. This year he went for credit card number 28, which would have been his ninth from Chase. The prize was a business card with a 200,000-point sign-on bonus worth thousands of dollars. Chase said no. He didn’t have enough business income. “The banks have gotten wise to some of our games,” he said. Here’s the line that matters for the rest of us. Read the fine print and a bank can usually close your account for any reason it likes. Many agreements let it keep the points too.
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This is cash flow (M5), and it’s simpler than the points crowd makes it. Points aren’t money in the bank. They’re a promise from a company that wrote the rules and can rewrite them. The bank can shut the account, and the points go with it. A big unused balance is a loan you’ve made to the bank at zero interest, and the bank can cancel it whenever it likes. JPMorgan Chase is held at weight in 26 books; nothing added.
The concrete thing in your plan is your rewards balance. Redeem it on a schedule, the way you’d collect a dividend, instead of hoarding for a dream trip years away. This week, log into each card and write down two numbers. The points sitting there, and the cards you’ve opened in the last 24 months. If the first is big and the second is near five, spend some points and stop applying. It’s a ten-minute check, and we’re happy to do it with you. Better to find the umbrella while the sky is still blue.