No Method Of Earning Points Is Too Small For The AMEX RAT To Shut Down

by joeheg

American Express has been one of the most aggressive banks when it comes to cracking down on what they feel is an abuse of its rewards programs. This stance was only worsened by the creation and initial success of the AMEX RAT (Rewards Abuse Team). At first, they worked to shut down the biggest loopholes, like adding AMEX offers to multiple cards. While this was understandable because some people were exploiting the system beyond reasonable means, it still made AMEX cards a little less valuable.

AMEX has systematically gone through their systems to close up every possible way to earn anything extra from its cards. Buying gift cards to get a sign-up bonus is not allowed anymore. Neither is referring yourself to a different AMEX card. American Express is now even clawing back bonuses if they feel they were awarded incorrectly.

Most recently, they’ve instituted a pop-up box for new applications to alert you if they’re not willing to pay you a sign-up bonus for whatever reason (since they don’t give an explanation except that you are deemed to be “gaming the system”).

I wondered what would happen to the AMEX RAT during the COVID-19 pandemic. Would they become more lenient and relax some of the most restrictive policies or would they clamp down even more? Based on a note on my recent AMEX statement, I think I have my answer.

On the back page of my paper statement, I saw a “Summary of Changes” notice. I skimmed it and found that AMEX will eliminate another way to earn miles and make it more expensive if you don’t know about the change.

Effective January 15, 2021, we are updating this sub-section to add precious metal coins and bullion to the definition of Cash Advance in your Cardmember Agreement.

Now, this isn’t a big deal to me. But it was a little confusing to Sharon when I told her about the bullion – she was wondering why people would buy salty broth cubes with their AMEX cards (to her defense, she was cooking and her mind was not on manufactured spending.). (Note from Sharon: it was pretty funny at the time. Joe said the look on my face was priceless)

However, I know that many points and miles people take advantage of sales of limited production precious metal coins from the US Mint as both a way to earn extra points and as a reselling opportunity, as these coins cost anywhere from $1,000 to $4,000. If you’ve been taking advantage of these releases, here’s your notice that American Express will now view those purchases as cash advances, and not only will you not earn any points, you’ll also have to pay fees and interest, starting immediately.

I can’t see how these transactions would be a huge hit to American Express’s bottom line. Some of these coins only have a production of 2,000 or less. If every single one of them were purchased with an AMEX card, it wouldn’t even be a blip on the screen. However, the RAT must have seen increased activity from the US Mint when these coins are released and decided that by marking these purchases as cash advances they will keep people from earning a few extra points and earn extra fees for the bank. Totally a win-win for them.

(Note from Sharon: And a shortage of bouillon was averted, too 😉 )

Cover Image by Yannick McCabe-Costa from Pixabay

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This post first appeared on Your Mileage May Vary


Leo November 24, 2020 - 12:35 pm

Seems like weird move. Gold is not a legal tender, so they can not charge for cash advance here

LarryInNYC November 24, 2020 - 12:36 pm

The funny thing about their announcement is that while bullion may no longer count, with the new platinum offer everyone’s trying to figure out how to consume $15,000 worth of boullion.

AlohaDaveKennedy November 24, 2020 - 1:16 pm

Looks like the RAT is really stretching it to justify its existence. Hard to see any real savings for AMEX here after the cost of RAT upkeep (cage, RAT chow, cedar chips, etc.). Time for AMEX to buy a Maine Coon Cat and turn the RAT into a Thanksgiving meal?


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