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I recently applied for the Amex Gold Delta Skymiles card, with the intention of getting the sign up bonus (60,000 miles after $2k spend in first 3 months) and canceling the card before the first annual fee kicks in (as it is waived for the first year). I also did the same thing already with the Chase United Mileageplus explorer card, but it didn't have the same nasty terms I see in the Amex Gold card... the Amex Gold cards has some language that threatens to remove/take away/not honor the bonus if I cancel within the first year. My question is, what can they do if I have already used the miles? All of the threat seems revolved around taking the bonus away, but what if it's already been spent?

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    Just downgrade to a no-fee card or close it within 30 days after the annual fee posts and the fee should be credited back. In terms of your credit score, it could be better to downgrade than close. – topshot Aug 13 at 12:27
  • I've done exactly what you are proposing with the Amex Gold Delta card: get the card, use the points, cancel the card. If you have already used the miles, then what are you worried about? – Erich Purpur Aug 13 at 13:18
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    It is quite odd to do these things though if all you intend to do is steal miles or points. – JonH Aug 13 at 16:01
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    @Erich Being billed, perhaps? Having spent the miles doesn't mean they can't ask for them back (in cash form). – 26460 Aug 13 at 16:24
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    @JonH the points are posted as a reward for signing up, not for staying a long term member. If you fulfill your part of the deal it's incorrect to call this 'stealing'. I assume that plenty of people in Amex are getting bonuses for meeting their sign-up numbers; if they want people to stay then they probably need to offer an annual bonus, or reduce their annual fee, etc. – Kirk Broadhurst Aug 14 at 21:15
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Note: I am not a lawyer; this is not legal advice.

TL;DR: As Hart CO says in their answer, there is probably nothing they can do once you've used the points, other than close your card and, potentially, any other accounts you have with them.


The Offer & Benefit Terms for American Express's Gold Delta SkyMiles® Credit Card can be found at this link. Under the heading "30,000 Bonus Miles" it first states when they can take action (emphasis mine):

If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount),

and then lists what they can do with regard to the bonus miles:

we may not credit the welcome offer to, we may freeze the welcome offer credited to, or we may take away the welcome offer from your account.

All of these will prevent you using the bonus miles if they suspect "foul play". There is no mention of any recourse that they reserve should you have already spent the miles before they decide that you are in violation of their terms1. However, it does continue (emphasis mine):

We may also cancel this Card account and other Card accounts you may have with us.

Obviously, the first part won't bother you if you're the one who closed the account, but if you have any other accounts with American Express, they reserve the right to close those as well (how likely they are to actually do this, I have no idea).

And, while the terms and conditions do not explicitly talk of "blacklisting" people who abuse the offer, the opening paragraph is:

Welcome offer not available to applicants who have or have had this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.

Assuming this, or something like it, is present in any future T&Cs, it allows them to take how you behaved with this card into account when considering any future cards you may apply for.


1 As others have said, they do not run the SkyMiles® scheme, so (at least without a lot of extra legal-wrangling over their arrangement with Delta) could not take other miles from your balance or make you "overdrawn" in miles.

They could, perhaps, have written in a "you must reimburse us $xxx" clause, although I suspect the costs of enforcing this would outweigh anything they recovered.

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    The other answers have good advice, but this is the full, correct answer since it actually goes and looks at the T&C's. I was going to do that if no one else had. – Bobson Aug 13 at 12:09
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    The last paragraph, if such a clause exists, they'd make it high, like $800. Then they bill you. If you don't pay, they sell it to a creditor for half value, then you have to deal with all that collections nonsense. Starts to be a lot of work for a $350 flight. – 26460 Aug 13 at 16:31
  • check out reddit.com/r/churning for more information on the subject – Dean MacGregor Aug 13 at 19:33
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    @Bobson TOS are usually out of sync with the de facto policies. Might be worth perusing them but they are rarely going to be what you should base decisions on when good crowd-sourced wisdom exists. – John K Aug 13 at 20:56
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If you churn enough cards with AMEX they will blacklist you from ever getting another bonus with them again. I learned this the hard way. If I had realized this I would have kept my AMEX cards longer. I actively churn cards (free travel for 6+ years), but I am currently unable to get anymore AMEX bonuses. They are willing to give me their credit card, just no more bonuses.

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    Do you really regret, if you got 6 years of free travel? – Dennis Jaheruddin Aug 15 at 10:04
  • It appears that more and more companies are tightening the screws on the rewards programs they offer to stifle churning. – topshot Aug 15 at 13:31
  • I don't regret, and I am still churning Chase. But I would have gone about AMEX differently (kept them for a couple of years before closing). – Heather Aug 15 at 20:42
  • From what I've read AMEX will only give a bonus once per person. Something like, once per personal card and once per business card. – stannius Aug 28 at 20:26
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Remember there is a financial arrangement between the card and the airline mileage program. If you violate the terms and conditions with one there is an impact with the other. When you earn miles either by regular purchases, or through a bonus award, the credit card company purchases miles from the airline mileage program. When you use the card to purchase tickets on the airline, then the card awards you additional miles. The deal works in both directions.

When you violate the terms and conditions of the credit card company they can, if the agreement they have with the program allows it, request that the airline mileage program deduct your improperly awarded miles. While i did qualify the above statement, you should assume they can deduct the miles as part of their agreement. They do this all the time when you return a purchase or cancel a ticket. Depending on the mature of violation they can have your airline mile program membership terminated.

We have seen this occur when a person is caught buying or selling points from outside the program. The termination of the program membership will also cancel any legitimate miles in the program. It will also impact any other AMEX cards you have. The airline can also prevent you from opening a new miles account. The miles membership is also frequently linked to rental car member programs and hotel member programs. Your ability to earn points from those programs could also be impacted.

So if you earned the miles within the three months and then waited the 8-12 weeks for the bonus miles to be awarded, then you made a reservation using the miles in the program, then took the flight, then a cancelled the card just before the annual fee kicked in, and you had no other points remaining in the airline program; Then the only thing you could do is cancel your Amex cards and cancel your mileage membership.

If you are willing to risk that then go ahead and churn the account.

I did check the Chase/United program. It also had similar language.

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    Worth noting here to anyone looking at this answer; the Chase/United program has less aggressive language and only indicates the potential pursuit of retribution up to 6 months... giving you 6 months after this to cancel the card before the waived fee kicks in – KingG0at Aug 13 at 14:02
  • Can you point out which part of the T&Cs they would violate if they go ahead with this plan? – JB Chouinard Aug 13 at 19:51
  • The key phrase is: "if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount)," – mhoran_psprep Aug 13 at 20:36
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My question is, what can they do if I have already used the miles? All of the threat seems revolved around taking the bonus away, but what if it's already been spent?

If you have used your reward points, then the reward clawback will leave you with a negative point balance. I don't believe they can charge you for a negative reward point balance, I see people suggesting this possibility but don't see any examples or language in their terms and conditions that supports that notion. In most cases a negative point balance just means no new rewards until you've spent enough to earn rewards to bring the point balance positive, but if closing the account I see no evidence of a financial consequence to the cardholder.

I believe the worst they'd likely do is blacklist you, but plenty of people churn Amex cards or have rewards clawed back without being blacklisted, it's most likely reserved for people that have had accounts charged off rather than people who leave with negative point balances.

In your case, you can avoid any negative outcome by waiting until the 13th month to cancel. For Amex the annual fee is refunded if you cancel within 30 days of the statement date on which the annual fee is charged. Read your terms and conditions to confirm that provision is still in place (has been for years but I haven't opened an Amex recently).

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    This seems to miss that the miles are not in an account controlled by Amex. Rather, Amex deposits the miles into the customer's Delta account. Amex cannot unilaterally cause the balance to become negative; Delta may not even support the possibility of a negative balance. And closing the credit card will not close the Delta account. – nanoman Aug 13 at 6:43
  • @nanoman It's true, I was speaking about Amex MR in general, unsure of what agreement they have with Delta. I would imagine Delta has no interest in letting a pile of miles be clawed back by Amex. – Hart CO Aug 13 at 14:28
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I'd simply put this as a comment but don't have the rep...

Just for the sake of completeness, I'd like to suggest an alternative:

Simply ask AMEX if they will permanently waive the fee.

I know this isn't an answer to your question, but often times they will do this... In fact, I have the Gold card myself with no annual fee. I had intended to cancel, but they waived the annual fee for me permanently to keep me as a customer, and because of that I still use the card. I'm not sure how commonly it's done, but it doesn't hurt to ask.

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What you are doing is called "churning" and is reasonably common. To answer your question, American Express can charge you the amount you already redeemed to recover the sign-up bonus that you no longer qualify for. If you want to churn cards like this you have to carefully read the terms and conditions and then keep the card open long enough to not be subject to any sign-up bonus clawback. Using the sign-up bonus does not let you escape these terms.

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    How exactly would Amex "charge you the amount you already redeemed"? Would they be able to reach into OP's Delta account and take whatever's there up to the amount owed? Or would OP be ordered to transfer Delta miles back to Amex, and perhaps have to re-earn or purchase additional miles to comply? Or are the miles assigned a specific cash value and that's what would be billed? – nanoman Aug 13 at 4:26
  • @nanoman Well, they cant successfully demand that OP return miles, since OP has no miles and cant create miles. They could put OP at a negative miles total and hope he earns more. Or can demand a cash equivalent. It should be stated in the terms and conditions. – Matt Aug 13 at 4:31
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    OP can "create" miles by purchasing them directly from Delta. But I have never heard of a credit card being able to extract miles from an airline account and leave a negative balance. – nanoman Aug 13 at 4:37
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    @nanoman: Most certainly they can pull redemptions back from the rewards account, even a rewards account not affiliated with the bank. But all the anecdotal evidence points to only doing that if the rewards have been transferred fraudulently, and in such cases rather than leaving the rewards account negative, the airline may well cancel the tickets purchased with those rewards. – Ben Voigt Aug 13 at 15:17
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    @MartinBonner: The TOS doesn't list "having cops arrest you" either, but if you use the card fraudulently it can happen. Also the TOS does say "We may take away the welcome offer" which would include clawing back redemptions. – Ben Voigt Aug 14 at 14:11

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