Buzz
There are obvious dangers in trying to manipulate the credit card rewards system. You might miscalculate how to earn signup bonuses and end up in debt. Your credit score could suffer. Your points might lose value, or the card's partners could change unexpectedly.
But those are just errors. There's a more serious risk that's not so innocent: rewards abuse.
Reports have surfaced that American Airlines and Citigroup have been locking accounts and canceling flights for customers who violated AAdvantage program policies.
Here’s an example of such behavior, from a Bloomberg report:
One issue is a practice that’s been banned for a long time: creating multiple accounts in American’s AAdvantage loyalty program using fake names and email addresses, then responding to a Citigroup offer to apply for the airline’s credit card. These online promotions often offer generous rewards of up to 70,000 miles.
A post from The Points Guy suggested a recent promotional mailer may have played a role. This mailer lacked the usual signup restriction, which prevents current Citi cardholders from getting a signup bonus if they’ve opened a card in the past four years. Since signup bonuses are often the most appealing aspect of rewards credit cards, many people applied for a new card just for the points. The offer also seemed to have no redemption restrictions, letting users share the promotion with others.
Both American and Citigroup confirmed to Bloomberg that their policies haven’t changed and they are always vigilant for violations.
If you only have one or two rewards credit cards, it's unlikely you’ll be flagged for violating your credit card or airline’s rewards program. However, the more you try to, let’s say, exploit the system, the higher your risk becomes. Gary Guthrie of ConsumerAffairs explains that manipulating targeted links to secure the same offer, using someone else’s offer, or attempting to open a large number of cards in a short time are huge red flags for card issuers. Starting a fake business? That could definitely backfire on you.
If you're considering adding another rewards card, take time to carefully evaluate your options based on your needs. Plan your application for a time when you'll be able to meet the spending minimum to earn the signup bonus, and most importantly, follow the rules. While you might not be flying in first class anytime soon with your points, at least you won’t risk losing them altogether.
