American Express Alters Membership Rewards Points Management for New Cards

American Express has modified its approach to Membership Rewards points by now creating separate rewards accounts for any new U.S. cards opened. This departure from automatically merging points into existing balances raises pivotal considerations for cardholders. While you can still consolidate your points, failing to do so before canceling a new card could result in losing those rewards—even if you maintain other Membership Rewards cards.

The alteration, recently introduced in Amex's revised terms for October, indicates:

When you open a new Product, a new Rewards Account will be created and linked to that Product.

Starting immediately, existing cards maintain their current accounts, but all new inquiries must consider this shift, which complicates the previously straightforward process of retaining rewards upon card cancellation.

The Implications for Card Cancellation

Previously, cardholders could cancel a Membership Rewards card without losing their points, provided they retained at least one eligible card connected to the same rewards account. This notion held as long as automatic pooling allowed users to overlook linking requirements. Now, however, the onus is on the cardholder to ensure their rewards are correctly linked. This adds an extra layer of complexity—and potential oversight—into the card cancellation process, which was once relatively hassle-free.

The rules state that if you cancel your last linked card, you will immediately forfeit the corresponding rewards balance. So, if you’ve earned 150,000 points with a new Platinum card while also holding onto a Gold card with 50,000 points, the risk lies in closing the Platinum card: that 150,000 points could disappear despite your Gold card still being active. That’s a harsh reality for those who might be unaware of this critical change.

For New York residents, state laws grant a temporary option to redeem points even after such cancellations—90 days if linked to a personal card and 30 days for corporate cards. However, waiting that long to consolidate your points could put your rewards in jeopardy. It’s essential to act quickly, consolidating balances and verifying links before making any rash cancellation decisions. Remember, it's your responsibility now to keep track of your rewards—an extra burden that many consumers may not realize they’re taking on.

Amex's Potential Motivations Behind the Change

Though American Express hasn't explicitly disclosed the rationale for this updated policy, it could serve several distinct purposes. For example, separate balances allow customers to clearly distinguish between business and personal rewards, which might simplify accounting for the more financially savvy consumer. Yet, there’s another layer to this. The potential financial advantage for Amex is quite apparent: customers might easily overlook or forget to combine small point balances. Those fragmented balances could lead to forfeitures that save the company from having to cover redemptions. And let's face it: the less money a company has to pay out, the better it looks on their bottom line.

The recent change also hints at potential future differentiation in card values. Amex's updated terms suggest that the value of points might fluctuate based on the linked products in the future. Imagine a scenario where specific credit cards offer more favorable redemption options than others. This trend isn't isolated; it reflects broader shifts in the credit card market. Recently, banks have increasingly adopted tiered rewards systems based on annual fees and card utilization, as seen in adjustments from competitors like Chase. This could mean even more strategic decision-making for cardholders as they navigate options—and it raises questions about the fairness of point values associated with different cards.

Comparative Actions in Other Markets

Moreover, Amex is making similar adjustments abroad, particularly in India, where they've announced the separation of rewards balances. This change reportedly includes ending transfers between points on cards by November 15, 2026—far less favorable than the U.S. policy, which still allows for linking. This suggests a potential testing ground for the changes U.S. cardholders now face, showing that Amex may be shifting its strategy to minimize costs globally.

Steps for Combining Your Points

If you've opened a new Membership Rewards card, here’s how to combine your points:

1. Log into the American Express website or app and select Manage Connections.
2. Connect the separate rewards accounts you'd like to merge.
3. Wait for verification and check the combined balance before redeeming or canceling any card.
4. If the option is unavailable, contact the Membership Rewards team using the number on your card.

The feedback from users on forums indicates that even if new balances initially appear separate, connection options can materialize shortly thereafter. In one noted case involving the Blue Business Plus card, attendees remarked that balances consolidated even quicker than anticipated, highlighting the necessity to verify that all accounts are correctly linked. (And this is the part most people overlook.)

Future Implications

The amendments made by American Express could signal a more significant trend in the credit card industry, primarily focused on optimizing financial outcomes at the expense of consumer convenience. If you're working in this space, it’s essential to consider how this shift may affect your interactions not just with Amex but with the entire financial sector. Consumers might need to become increasingly vigilant in managing their rewards accounts, as these changes could set a precedent for other card issuers. Ultimately, this evolving landscape may lead to more scrutiny of rewards systems and their fairness, both against one another and for the average consumer.

(HT: Doctor of Credit)