Back in November, I reported that Diners Club launched 2 new credit cards: Diners Club Premier and Diners Club Elite. The main focus was on the Elite credit card since it earned 3x points at grocery stores, gas stations and drug stores. This card was just screaming manufactured spending! Most grocery stores sell $500 Visa gift cards and CVS still allows credit card payments on some gift cards they sell.
At 3x points per $1 spent with no monthly cap on how many points you can earn, Diners Club probably would have started loosing money. That would explain why there was an abrupt suspension of applications in late November and customers’ credit cards were frozen. Well after nearly 2 months, it looks like Diners Club is finally closing customers’ accounts and refunding the $300 annual fee.
Diners Club didn’t think this through
My local grocery stores lets me purchase as many gift cards as they have in stock. With 3x points in grocery, I probably would have spent roughly $20,000 a month at my grocery store. That’s 60,000 points for only $238 in gift card activation fees! ($5.95 per card x 40 = $238). 60,000 points is just shy of a one-way First Class ticket over to Europe. For $238, this credit card would have been a no brainer.
I held out on applying because I had too many recent credit inquiries. I’m glad I waited, because I probably would have been shutdown like others for overspending in the bonus categories.
Diners Club Elite account closures
There are plenty of data points for accounts being shutdown. The data points seem to be scattered, but it looks like overspending in the bonus categories is a big no no. Also, spending large amounts at Target also caused accounts to be closed. As of right now, Target allows customers to load their RedBird card with a credit card, but I think that’s going to change real soon. Credit card companies are already flagging accounts for repeat large Target purchases. This is a story for another time.
- Customer was shutdown and never went over his credit limit
- Shutdown after loading $2,000 at Target
- A co-worker was shutdown and he only MS’d roughly $10k per month
- A large MS’er was shutdown after hitting the 3x categories hard. Never loaded at Target
What if I’m not shutdown?
I would recommend 1 of 2 things:
- Hit the spending hard to earn as many points as possible before your account is closed.
- Take the spending slow, add it lots of legitimate spending and hope for the best.
If your account is closed, it doesn’t appear like there’s anything you can do. The bank has the right to terminate their relationship with a customer. All I can recommend is to learn from this experience and move on. It’s part of the game and if you participate in manufactured spending then it’s a risk you take.
We’re you approved for this card before the application page was taken down? I’d love to hear your story with your Diners Club Elite credit card. Please share in the comments below!