Citi & American Express Install New Anti Gift Card Rules
Over the last few days Citi & American Express installed new anti gift card rules. These are rules that are aimed at cracking down “gamers” or points hunters so to speak. One of the easiest ways to amass a large amount of points is increased spending and gift cards are a big part of that recipe. Is that now in trouble for two of the biggest providers?
It appears that credit card companies are getting ready for a gift card crackdown. Is it all smoke and mirrors or is this a legit worry? Let’s take a look at the rule changes and I will share my thoughts on it with you. Please share yours in the comments below as well!
Citi Rule Changes
The Citi rule changes are aimed at the DoubleCash card (for the time being) which is the go to for gift card purchasers in the Citi lineup. Per Doctor of Credit the terms are changing to the following on November 1, 2019:
The following transactions are not purchases and will not earn cash rewards: balance transfers, cash advances, checks that access your Card Account, items returned for credit, disputed or unauthorized purchases, fraudulent transactions, traveler’s checks, foreign currency purchases, money orders, wire transfers (and similar cash-like transactions), lottery tickets and gaming chips (and similar betting transactions), loads or reloads of balances on gift cards or prepaid cards or cash equivalents, person-to-person payments, Citi Flex Loans, the creation of Citi Flex Pays, Card Account fees and charges (such as late fees and finance charges), and fees for services or programs you elect to receive through us.
American Express Changes
Amex has also targeted their most gift card friendly cards in the Blue Business Plus, Gold and Blue Cash Everyday to start out. Per Doctor of Credit the new terms are as follows:
With your Blue Business® Plus Card from American Express, you earn one Membership Rewards® point for each dollar you spend on your Card for eligible purchases. For the first $50,000 in eligible purchases in each calendar year you also earn one additional point (for a total of 2 points)…Eligible purchases do NOT include fees or interest charges, balance transfers, purchases of travelers checks, purchases or reloading of prepaid cards, purchases of gift cards; person-to-person payments or purchases of other cash equivalents. Additional terms and restrictions apply.
Why Are They Making These Changes?
American Express has been trying to cut down on “awards abuse” for a while now. First the eliminated gift cards counting towards welcome offers, then they shut down all points at places like Simon Malls and now these terms. I called American Express the least transparent lender out there for a reason. If they don’t like what you are doing they will clawback points without warning, like they did with self referral bonuses. This is just expanding on what they have already done.
I am a little more confused to see Citi cracking down since they have never cared before. This comes weeks after Citi completely gutted their travel benefits (and others) across their credit card lineup. And to target a card that earns a flat 2% back which means they are making profit on every swipe no matter what you are buying is confusing. There are no bonus categories for this card so what gives? Is this another cost cutting attempt? Are they lining this up for the rumored Citi DoubleCash transfer options?
What This Means In Reality?
I think both companies are building up their defenses. They are putting something into place so that they can break the glass in case of emergency. Do I think they are going to review all data to pull out earnings on all gift cards? Nope! But do I think they can and will use these terms to close accounts or yank back points when they feel someone is taking advantage of them? Yup!
The fact that they don’t specify cash equivalent cards and just say gift cards means that 3rd party gift cards, like Amazon, fall under the terms. Store gift cards are a HUGE business, just see all of the deals we post about them. Because of that I think they would be crazy to go after it. All kinds of people buy 3rd party gift cards…they can’t wrangle all of that. If you are buying them from a legit store I think it will be fine going forward.
Will they crack down on the obvious things like giftcardmall, Simon mall and giftcards.com etc. Yeah I think those will not earn points for purchases in the near future (as some already have). Will similar 3rd party gift card sites like Gyft and mygiftcardplus earn the same fate? That is where I am not sure.
I think grocery store purchases etc. will be fine unless they notice huge volumes or big spikes in spending. They may use these new terms to do a manual review on your account and yank back those points. We will have to wait and see how that plays out.
This is a troublesome trend for sure and I hope Chase keeps their nose out of it! But for the time being I think this will only affect obvious VGC and MCGC orders and 3rd party cards will be safe. And if purchase are smaller amounts of VGC etc. then those will probably slip through. I think purchases from obvious vendors like Simon Mall/giftcardmall etc. will be on their radar though and those points will be denied in the near future. My real worry is sites like Gyft that exclusively sell 3rd party gift cards getting lumped into this as well. Only time will tell there though.
Share your thoughts below.