In response to the current social distancing guidance and the resulting slowdown in consumer activity, American Express US has taken the significant step of adding an additional three-month grace period to cardholders’ minimum spending windows.
The standard minimum spending window on Amex US credit cards is within the first three months of card membership, so eligible customers will now have a total of six months to complete their minimum spends and earn their signup bonuses.
Three-Month Minimum Spending Extension
Ordinarily, credit card issuers attach the welcome bonus to a minimum spending requirement within the first three months to get you into the habit of putting your spending on the card once you’ve received and activated it.
Most new cardholders will therefore plan their major purchases accordingly, and only apply for the card once they’re confident they can meet the minimum spending requirement and claim the full bonus.
At this time, however, travel have been cancelled and restaurant visits and pub nights severely curtailed, and this will definitely have scuppered many households’ plans to meet minimum spends on cards that they’ve opened recently. Furthermore, other prospective cardholders might be hesitant to apply for new credit cards at the moment due to uncertainty over whether or not they’d be able to meet the minimum spending.
That’s why it isn’t surprising to see Amex US making this move. At the top of the Amex US website, you’ll see the following notice:
If you’ve applied for an Amex US credit card since December 1, 2019, or if you’re planning to apply for one before May 31, 2020, then you’ll be eligible for this three-month extension on the minimum spending window. The extension is valid for personal and small business cards, and should encompass virtually all of the Amex US products that we in the Miles & Points community are interested in.
I personally will benefit from this change on a recently opened Amex US Hilton Business Card – I probably would’ve been able to meet the minimum spending by the usual three-month deadline anyway, but this gives me a lot more leeway to work with.
Is It a Good Time to Apply for Amex US Cards?
This may potentially represent a good opportunity for Canadians to pick up some of the Amex US credit cards with higher minimum spends, like the Amex US Platinum Card’s US$5,000 minimum spend or the Amex US Hilton Aspire’s US$4,000 minimum spend, given the longer timeframe that you have to meet the requirements.
Keep in mind, of course, that the external economic climate isn’t particularly conducive to high spending at the moment, so you should make sure that tackling a high minimum spend – even over a six-month window – isn’t going to cause you to spend more money than you normally would.
There are a few other obstacles to bear in mind: the Canadian dollar has weakened significantly against the USD in recent weeks, meaning that the same USD minimum spends will now correspond to a higher amount in Canadian dollars.
Furthermore, many mail forwarding services in the US (including 24/7 Parcel, the service I personally use and recommend), are understandably shut-down at the moment as non-essential businesses, so it may be difficult to receive your US mail in the short-term future. If you’ve been using a family or friend’s address in the US, you should also expect a few delays in the mail processing as well.
If and only if you’re comfortable with the above, then it would make sense to take advantage of the extended six-month minimum spending window being offered by Amex US.
On the other hand, there’s definitely a case to be made for going at a more relaxed pace on the credit card front at the moment and not chasing bonuses quite as aggressively as we do when we can freely travel the world, so it’s perfectly understandable to take things a little easier for now and ramp up your US credit card game when things are better as well.
Meeting Minimum Spends During Social Distancing
On the topic of minimum spending, what are some ideas for meeting minimum spends now that we aren’t going out and spending a lot of money at all?
There’s the usual recommendations to purchase gift cards for future spending or pre-pay your cell phone or utility bills. Also keep in mind that the Plastiq service can allow you to pay bills that you wouldn’t normally be able to pay with a credit card, such as your rent, taxes, tuition, and property taxes. The CRA has deferred the personal income tax deadline to June 1, 2020, which gives you additional time to schedule your tax payments in line with your minimum spending windows.
If you’re running up against the minimum spending deadline and you’re in a position to do so, consider using this opportunity to do some good, such as making a donation to a charity that you’d like to support or that could really use it during these challenging times.
Consider making a charitable donation or helping out with grocery runs to get you closer to your minimum spend.
Alternatively, think of the elderly and immunocompromised folks in your circles who may not be able to leave home for their groceries – you could offer to pick up much-needed items for them when you go for your weekly grocery run, and in doing so you’d rack up some extra spending on your credit card while helping out the more vulnerable members of your community.
Finally, there’s always the refundable hotel trick to fall back on, although it doesn’t work with all issuers and is best avoided on Amex US cards, whose terms and conditions that specifically call out this practice.
Will Amex Canada Follow?
Now that Amex US has made their move, it remains to be seen whether Amex Canada will follow suit. Several cardholders have already reached out to Amex Canada over live chat about the situation, and have been told that they are closely monitoring the situation and will let cardholders know if there are any new developments.
I personally would expect Amex Canada and other financial institutions to do something similar – it would be the right thing to do. Looking at the big picture, depending on how protracted this crisis ends up being, all sorts of conciliatory gestures – even including annual fee waivers and refunds – could be reasonable.
After all, if a product is heavily marketed as a premium travel card with a wealth of travel-related perks, and, well, no one is travelling for half the year, it would only be fair to ask for a partial or full annual fee refund.
As always, let’s keep our fingers crossed that the situation starts to look up soon, and that any requests for annual fee refunds on our part will be opportunistic rather than necessary.
Conclusion
Amex US is extending the minimum spending window for all new cardholders who opened their cards between December 1, 2019 and May 31, 2020, and I’m very pleased to see them making this move to take care of their customers.
I’d expect Amex Canada and other issuers to follow suit and help out their affected customers with similar measures, too, and I’ll be sure to let you know of any such developments as they arise.
