American Express Alters Membership Rewards Policy Requiring Manual Consolidation for New Accounts
In a significant shift to its long-standing loyalty program structure, American Express has updated its Membership Rewards terms, fundamentally changing how points are accrued for new cardholders. Effective immediately, American Express will no longer automatically pool Membership Rewards points earned on newly opened credit cards into a customer’s existing, centralized rewards balance. Instead, each new product will generate a distinct, independent rewards account. While customers retain the ability to manually merge these balances, the change introduces a critical administrative step that, if neglected, poses a risk of permanent point forfeiture upon the cancellation of a specific card.
This policy adjustment represents a departure from the seamless, unified experience that has defined the Membership Rewards ecosystem for years. Historically, American Express customers who held multiple cards—such as the Platinum Card and the American Express Gold Card—saw their points aggregated into a single, consolidated bucket. This provided a "safety net" for cardholders, ensuring that as long as at least one eligible Membership Rewards-earning card remained active, the entire point balance was preserved, regardless of which individual card was closed. Under the new policy, that safety net is no longer automatic.
Chronology and the Mechanics of the Change
The shift was codified in the updated October program terms provided by American Express to its U.S. cardholders. The core provision states: “When you open a new Product, a new Rewards Account will be created and linked to that Product.”
This policy change does not apply retroactively to existing credit card accounts, which will maintain their current pooling status. However, for any account opened after the effective date of this policy update, the system treats the rewards balance as an island. For example, if a consumer holds a long-standing Membership Rewards account with 200,000 points and opens a new card to capture a welcome bonus of 100,000 points, those 100,000 points will reside in a siloed account. Should that consumer decide to close the new card account, they could theoretically forfeit the 100,000 points associated with that specific product, even if they maintain other active Membership Rewards cards under their login.
The process of consolidating these points remains possible through the American Express website, the mobile application, or via telephone customer support. However, the onus has shifted from the bank’s automated systems to the consumer, who must now verify that their rewards accounts are effectively linked and merged.
The Financial Implications of Point Forfeiture
From a consumer protection standpoint, the risk of "accidental forfeiture" is the most significant consequence of this policy. Loyalty program terms are notoriously dense, and the transition from an automatic system to one requiring manual intervention creates a higher probability of user error.
If a customer cancels their last remaining card linked to a specific, unmerged rewards account, the points associated with that account are generally subject to immediate forfeiture under standard American Express terms. While there are narrow exceptions—such as the 90-day grace period for cardholders with a New York billing address, mandated by state law, or limited windows for Corporate Card holders—the vast majority of consumers do not fall under these protections.
For many, this change highlights the importance of the Blue Business Plus card. As a no-annual-fee product, it has long served as a "parking spot" for Membership Rewards points. By keeping this card open, consumers could downgrade premium cards without losing their points. This strategy remains viable, but only if the consumer takes the active step of merging the balances from their other cards into the account associated with the Blue Business Plus card. Failure to link these accounts renders the "parking" strategy ineffective.
Market Context and Industry Trends
This development at American Express arrives at a time of increased scrutiny and strategic rebalancing across the credit card rewards industry. Financial institutions are facing rising costs associated with reward redemptions, particularly as cardholders become more sophisticated in maximizing travel and transfer partners.
The decision to isolate reward balances may serve several institutional purposes. First, it simplifies the accounting of liabilities for the bank. By keeping balances distinct, the bank can more accurately track the performance and cost-of-acquisition metrics for individual card products. Second, it creates a potential for tiered reward values. The updated terms specifically note that point values may vary based on the products linked to a rewards account. This language aligns with broader industry trends where banks have begun to differentiate the "transfer power" of points based on the card held.
For instance, competitors like JPMorgan Chase have already implemented tiered transfer ratios, such as limiting the ability of certain cardholders to transfer points to specific partners at favorable rates compared to holders of more premium, higher-annual-fee cards. By creating siloed accounts, American Express is laying the technical infrastructure to potentially offer different redemption values or partner access based on which "rewards account" the points are held in.
Global Divergence in Loyalty Policies
The move toward account segregation appears to be part of a broader, global shift in how American Express manages its loyalty programs. A similar, though more restrictive, policy change is underway in India, where American Express has announced that inter-card transfers will be restricted, with the ability to combine points being phased out entirely by late 2026.
While the U.S. market retains the ability to link and consolidate points, the trend toward decentralization is clear. In the U.S., the requirement to manually link accounts serves as a friction point that may discourage casual users from managing their points effectively. Banks have long understood that "breakage"—the percentage of earned points that are never redeemed—is a key factor in the profitability of loyalty programs. By increasing the complexity of managing these points, the bank may see a slight increase in unredeemed balances.
Strategic Recommendations for Cardholders
To navigate these changes, consumers should adopt a proactive approach to their American Express portfolio:
- Verification of Status: Immediately upon opening a new American Express card, log in to the account portal to check if the rewards balance is automatically reflecting the new card’s points. Do not assume that seeing both cards under a single login means the rewards accounts are consolidated.
- Immediate Consolidation: If a new card shows a separate balance, utilize the "link accounts" feature in the online portal or mobile app immediately. Most users report that while the system may suggest a 24-hour waiting period, the consolidation often occurs within minutes.
- Auditing Before Cancellation: Before closing any credit card, confirm that no outstanding rewards balances are attached solely to that product. If an account is not linked to your primary, permanent rewards pool, ensure that you have transferred or redeemed those points before requesting the closure of the account.
- Monitoring Program Terms: As American Express continues to refine its language regarding product-specific redemption values, cardholders should review annual notices and any amendments to the Membership Rewards terms.
While the change does not strip users of their ability to combine points, it effectively ends the era of "set it and forget it" loyalty management. The responsibility for maintaining the integrity of one’s point balance has shifted squarely onto the consumer, requiring heightened vigilance in an increasingly complex financial landscape. As the competition for affluent cardholders intensifies, the ability of these banks to manage the liability of billions of outstanding points will likely lead to further technical and policy-driven updates in the coming fiscal years.
