It’s time to review another credit card offer hitting the malboxes and this time I’m taking a look at the very festive Christmas/Holiday offer from American Express for their Premier Rewards Gold Card.
Let’s start with the outside of the envelope.
The inducement to open the offer is the card is NEW, you get $500 in gift cards to use for this holiday season and there is no annual fee, this year.
Since the offer hit just before Christmas the encouragement to open the card because you are going to get $500in gift cards is strong.
The inside of the envelope is very festive and all about gifts. There is a clear plastic card that says “Your holiday reward: You can earn 50,000 bonus points worth $5001 at select retail and dining partners if you use your Premier Reward Gold Card to make $500 in purchases by 2/28/10. The clear card is actually hard to read by glancing at it. But the $500 is apparent and so is “Your holiday reward: You can earn 50,000 bonus points.” That is set against a light background so it makes it easy to read but the small grey print and the finer print below is set against a background that makes it harder to read. An accident, I seriously doubt that.
It would not fit on the scanned image of the inside of the envelope but the footnote 1 says:
To be eligible to earn bonus points you must be enrolled in the Membership Rewards program at the time of spend and you must charge $500 of eligible purchases between December 1, 2009 and February 28, 2010 in an eligible, enrolled Premier Rewards Gold Card from American Express. “Eligible purchases” include purchases of goods or services, which have not been returned or otherwise credited to your Card account, it does NOT include fees, Finance Charges, Cash Advances or similar means of accessing your Card account or the purchase of American Express Travelers Cheques, American Express Gift Cheques or other cash equivalents. 50,000 bonus points will be credited to your Membership Rewards account 6-8 weeks after you have met the spend requirement. Limit one offer per Card account. Bonus points may be redeemed for gift cards valued at $500 upon point credit with participating partners. Terms and Conditions for the Membership Rewards program apply. Visit membershiprewards.com/terms or call 1-800-AXP-EARN (297-3276) for more information. participating partners and available rewards are subject to change without notice.
Now isn’t this interesting. From the minute you pickup the envelope, to the pretty picture of the gifts, the impression is if you apply for this card you are going to get $500 in gift cards for use this holiday season. Cleverly American Express says on the front of the envelope “Treat yourself to $500 in gift cards this holiday season.” But from the fine print you are not going to get them to use or give this holiday season because they are not going to arrive for 6 to 8 weeks after you have met the requirements. So how am I going to treat myself to them this holiday season? Misleading
American Express could have said “Earn $500 in gift cards this holiday season.” on the front of the envelope, that would have been a clearer statement and still provided inducement but the impression from the inducement that made it to the front of the envelope is deceptive and very misleading. The intention appears to have been to let the thought of $500 in gift cards to be a good bribe to apply. That’s in big print, the fact you get them two months latter, that’s in small print. What do you think?
The cover letter begins with a statement that would make the average person believe they have already been approved for this card. The letter says ” Congratulations are in order. You’ve earned an important distinction — a Card that reflects your achievements and compliments your life.” I’m wondering how I can be congratulated since all the recipient has earned is the honor of receiving the marketing offer.
If we look on the back of the actual application below there is a bold statement: This “prescreened” offer of credit is based on information in your credit report indicating you meet certain criteria. This offer is not guaranteed if you do not continue to meet those criteria, or any applicable criteria bearing on your credit worthiness established prior to your selection, or if the application is altered, or any required information on it is not complete, accurate, or verifiable. Additionally, this offer is not guaranteed if you have responded to another offer from us within the last 90 days or have been approved for another product from us.
So it really isn’t a definitive offer that you will actually get this card. Misleading
On this page we begin to really uncover the value of a ‘bonus point’. Apparently a bonus point is worth one penny (50,000 points = $500). So for every dollar you spend, you are getting a whopping one penny in bonus points.
Would you really want to give out five more cards to people just so you could earn points faster? Isn’t that a huge liability for you? You bet it is. I can see giving your spouse one to use but who else would you give it to, kids, parents, friends? What would you say to them, “Please go use this card as much as you can so I can earn bonus points.” That’s great for American Express, but terrible for you. Don’t do that.
There are some important statements made on this page. Here are some items we learn:
- The annual fee is $175.00.
- Bonus points won’t be made available until 6 to 10 weeks after the purchase.
- Charges at department of superstores or warehouse clubs are not eligible for bonus.
- “We reserve the right to exclude charges that we determine are not made for personal, family, or household purposes or with the good-faith intention of consuming the item charged.” I guess this means that business use of this card does not qualify for bonus points.
What catches my eye right off is this page is labeled a Membership Certificate but it is in fact an application for credit. Also, the five card offer is very prominent as well.
All you need to do to get the card is fill out your name and address, your annual household income, the employer name, telephone number and sign it.
Well we finally made it to the guts of the offer, buried and in fine print. Here are some things that are disclosed:
- You can get more than five cards to hand out to others but they will cost $35 per card.
- There is no grace period to pay your bill. “All charges made on this Charge Card are due and payable when you receive your billing statement.”
- This offer is controlled by arbitration if you have a problem with the card. Arbitration by credit card companies has been found to be grossly unfair to consumers and many of the big credit card companies have dropped that requirement. “I understand that the agreement governing the account includes an arbitration provision, which impacts my opportunity to have claims related to the account heard in court or resolved by a jury, and to participate in class action or similar proceedings.”
- Here is a very interesting twist. Apparently the credit reports of the people you give the additional cards to may be impacted if you can’t pay the bill. They may also be responsible for their own charges. So in actuality they are going on the hook without completing a separate credit application because you handed them a card. “Additional Cards: I have advised Additional Card applicant(s) that you may obtain, verify, exchange, and use information about them in the same manner as described above, that they may be responsible for payment of their own charges if I fail to pay them, and that their own credit records may be affected by nonpayment of the account.”
Interestingly, the full terms and conditions associated with this card do not appear to be included in the mailer.