Have AMEX Signed The Death Knell For UK Travel Hacking?

DISCLAIMER: Please note AMEX have announced further changes since this post, so please read all their terms and conditions before you apply for a card. 

There have been rumours that AMEX were proposing changes to their terms and conditions but the latest announcement comes as a huge blow to UK travel hacking. Could the days of churning and burning credit cards be over?

The end of UK travel hacking?

The change relates to the eligibility for a sign-up bonus. Previously, it was possible to cancel an AMEX card and reapply after a minimum gap of six months. Providing six months had passed since you cancelled, you would qualify for a second sign up bonus. That gap has now been quadrupled!!!! You will have to wait a whopping two years between cards to qualify for another sign-up bonus. Now that really hurts!

Beware the unsuspecting. This does not mean that you cannot apply for a card sooner. It simply means that if you do apply sooner, you will not earn the sign-up bonus even if you hit the minimum spend requirement. For those following my churn and burn strategy, this makes it harder to rack up the points quickly and impatient types may simply give up in disgust! My view is simple though, surely it is better to fly Club or First class once every two years than never?!

A ray of hope?

I personally do not think this is the end, but it is certainly going to mean it is more difficult. UK travel hackers will need to have more determination and patience to rack up tons of miles.

If you are new to this game and wondering how to earn tons of airmiles without ever leaving the ground, follow this simple plan.

Step one – Months 1 – 2

Take out the AMEX Gold card (be sure to use this referral link to earn an extra 2,000 miles when you satisfy the minimum spend). This will bank 22,000 membership rewards assuming you spend £1,000 per month (minimum spend for sign-up bonus eligibility). When you add this to the sign-up bonus, you will already have 24,000 rewards after two months.

Cancel the card once you satisfy the spend (but transfer your rewards to British Airways or another airline first). Also, use your referral link to refer your spouse or partner before you cancel. You get 9,000 rewards for a referral and your spouse/partner earns an extra 2,000 when they satisfy the minimum spend.

Ensure you get supplementary cards so that you and your partner can both contribute towards the minimum spend.

Total: 24,000 + 9,000 referral bonus = 33,000

Step two – Months 3 – 4

Repeat step one using your partner’s card. This adds another 24,000 to the bucket.

Total at the end of month 4: 57,000

Step three – Months 5 – 7

Then take out the British Airways Premium Plus card and spend £1,000 per month for the first three months. This satisfies the minimum spend requirement and you will bank a further 26,000 airmiles (again use this link to earn an extra 1,000 airmiles). Otherwise, you will only bank 25,000). Assuming you spend £1,000 per month, you will earn 29,000 by the end of three months. Refer your partner before closing the account and earn a further 9,000 miles.

Total – 86,000 plus 9,000 referral bonus 95,000

Step four – Months 8, 9 & 10

Repeat step three with your partner’s card to earn a further 26,000 miles.

Grand total 121,000

Cancelling the cards

Once you cancel the Amex card (and you may not want to due to the availability of the companion voucher) you will need to wait a further 24 months before you become eligible for another Amex Gold sign-up bonus or British Airways Premium Plus card bonus. This effectively restricts you to one reward flight every two years. 121,000 points will be enough for two flights in Club class to the USA using a companion voucher though.

To earn the companion voucher, you will need to spend £10,000 on the British Airways Premium Plus card. This will extend the period before you can earn another sign-up bonus on the AMEX gold card or British Airways Premium Plus card. You will need to wait 24 months after you cancel the card before you become eligible for another bonus.

Existing AMEX cardholders

Oh dear, AMEX have just screwed you with this addition to their small print! Naughty hey? This rule change makes it much less attractive to hold two AMEX cards, such as the AMEX gold card and British Airways Premium Plus card. You will need to hold the British Airways Premium Plus card for longer if you wish to bank a companion voucher and then wait two years after cancelling. Given the attractions of the companion voucher, surely AMEX Gold applications will suffer?

Retain the cards

Assuming continued spend of £1,000 per month, this gives you a measly 24,000 or 36,000 points for the two year period. Obviously, with Amex Gold you can earn almost this amount when you achieve the sign-up bonus, so in my opinion it still makes sense to recycle.

Recyle every two years

Realistically I think you will have to choose between AMEX Gold and British Airways Premium Plus card in future. The latter is probably better value because of the companion voucher but if you wish to transfer rewards to another airline then you will need AMEX Gold.

Once you have earned your companion voucher, I would recommend cancelling and get an entirely different reward card, such as IHG for instance. Once you become eligible for another bonus apply for your preferred card and use that until you earn the sign-up bonus and/or companion voucher. Then go back to your alternate cards.

for what it’s worth…

I personally think AMEX may have shot themselves in the foot with this move as these cards have now just become so much less attractive to hold.

Whilst most people admittedly will not churn these cards at all, I suspect that the ones that do are those who consistently bill more to the card. Why wouldn’t those people, me included, just go take out a Cashback card or another form of reward card for the interim period? Also, I will only hold one card in the future and it is likely to be British Airways Premium Plus card because of the companion voucher.

But, what do you think?