There have been a couple of waves of disturbing shut downs over the past week that you should be aware of. I don’t want to get too deep into the details of why the shut downs were happening for obvious reasons and also because at this stage I think we still need more data points on specifics. But it is always good to know what’s going with these things because they could impact your credit card strategy.
American Airlines accounts
Some people have had their American Airlines account basically shut down over the past week. I have even seen reports of AA canceling future flights that were booked by these people! That is straight up crazy and I don’t think I’ve ever seen anything like that happen.
Why are people getting shut down?
There seems to be a definite link with people who utilized certain types of targeted mailers and that did activity that clearly qualified as abuse. Basically if you were participating in the action you know what I’m talking about. And if you didn’t participate in the action, well, be thankful.
It’s not clear what the threshold was for triggering a shut down but it is also still unfolding as we speak so we don’t really know how far down AA is willing going to go. It does look like they are taking pretty widespread action though.
This is a pretty big situation though because a lot of people are having issues accessing their accounts or booking awards. Basically their miles are now useless. And in some cases these are people with hundreds of thousands of miles.
There is a discussion taking place on Reddit today but I have to warn you that the discussion is pretty jumbled. There also is a private sub-Reddit that is set up but you may have difficulty joining.
Chase shut downs
There is also some talk about shut downs coming out from Chase. Basically, around Thanksgiving time Chase started to send out letters to some individuals notifying them that all of their accounts were being closed.
It seems that the shut downs are linked to a high level of activity such as opening up a lot of credit cards over the last year or two. For example, one person opened 30 credit cards in the past two years. And that was not including business cards!
Apparently there were also some reports of shut downs related to people applying for links that were not sent to them originally (link hacking).
Either reason could be the reason for some of the Chase shut downs but it does not seem like they are happening nearly as rapid as the AA shut downs.
Avoiding shut downs
At this point, shut downs are becoming pretty common for people aggressively pursuing rewards.
Basically, I would not feel comfortable applying for any type of link that does not seem open or available to the public or that does not look like it was designed specifically for me. I also would avoid any type of activity where you are continuously dipping into the same pot.
I’ve been saying it for a while now but those days are over where you can indulge in rewards at that level and not expect any type of negative consequences.
Now, it is all about playing it safe.
The more I hear about shut downs, the more I want to incorporate some kind of measure into WalletFlo that will help people keep themselves in check when it comes to credit card applications.
Giving users a warning message when they are applying for cards to quickly could be helpful as well as linking out to recent data points about shut downs to further give them the motivation they need to slow down.
Hopefully most of you were not impacted by these shut downs but if you have been getting busy with AA over the last year or so you are probably going to be in trouble.
Some people are thinking about burning their miles as quickly as possible but that could be a little risky because if AA wanted to get aggressive they could potentially take some type of action against you for misuse of their program. That’s probably not very likely but it is still a possibility nonetheless.
As for Chase, I don’t think the actions are as widespread so I doubt you have as much to worry about with shut downs but it is still worth monitoring pretty close.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.
Is it possible to explain why people are getting shut down in less vague terms. I’m curious how far people are pushing their machinations to get points.
Basically abusing targets mailers. Think getting bonuses over and over again for the same card, sometimes waiting only a couple of months. This has been going on for a while but AA has finally decided to do something about it.