Why is BMO Harris shuttering Diners Club accounts?

Reader Jake recently asked if my Diners Club account was affected as part of the massive sweep of closures BMO Harris enacted of the “Elite” version of their new consumer credit card that earns Diners Club Rewards points.

A few months ago, I asked why nobody was talking about the card.  The math, after all was quite compelling if buying Visa gift cards at your local drugstore is your cup of tea.  For a $4.95 “activation fee” and a $0.99 money order fee, one could acquire 1505 Diners Club points.  That’s a cost of only ~0.39c per point — or about $390 to earn 100,000 points which could be transferred at a 1:1 ratio to Alaska Airlines, Aeroplan, British Airways, Delta, etc.  Not only is that a crazy cheap “price” for the miles, but the 3X multiplier made the entire experience much more efficient.

Roughly $400 for potentially two flights in Emirates First Class makes it very much worth it…

Emirates A380 First Class

Emirates A380 First Class

Not surprisingly, this arrangement was super unprofitable for BMO Harris–the card issuer of the new Diners Club cards.  I’m pretty sure they didn’t have any idea what they were getting into by offering a 3X point multiplier on drugstore purchases.

So cards were beginning to be shut down left and right and my account was affected as part of their sweep.  I know several others who were also affected.

It’s important to understand this is always a risk of manufactured spending, and it was one I was wiling to accept mostly because BMO Harris isn’t local to me as a bank, and they don’t offer any other credit card products I’m interested in.  My relationship with them means absolutely nothing to me, so if it ever became unsatisfactory to them, I could walk away and lose nothing.  This is one major reason I do not engage in manufactured spending on cards issued by banks with whom I value my relationship–Amex, Chase, Citi, etc.

Why did they shutter the account?

I spoke to somebody at BMO about my account and he told me what flagged their suspicion on the Elite accounts in general was multiple charges for the exact same high amounts often several times per week.  I also got the impression speaking to him that basically all of the new accounts were under review and that most of them were offenders.  So I’m sure it didn’t help matters that 90%+ of their cardholders were exploitative manufactured spenders…

Does anyone still have a working Diners Club Elite card?

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Comments

  1. I had one last night, as of today it was closed without warning. I only found out because I tried to make a small purchase. I’ve been laying off the MS on this card for the past month in hopes of flying under the radar but I think they’ll eventually get around to everyone who tried any kind of serious MS….which is probably every one of their cardholders who signed up in the past 5 months.

    Now they don’t even bother with the formality of a freeze and review. It’s straight shutdown with supposedly a letter in the mail to explain the decision.

    • That’s how I found out — declined for a ~$2 purchase at Walmart. I was supposed to get a letter weeks ago, but have thus far received nothing… I’d be curious to know what it says.

      • You can find a copy of it one of the FT threads. At least I got $300 credit to my account yesterday, just need to get that mailed to me, otherwise I couldn’t care less what their BS reasons are. It’s obvious they just badly screwed up, and at first tried to legitimize the shutdowns but now just don’t care anymore and want to clean house.

  2. I still have a working Diner’s Club Card.

    • We Fly Free says:

      Are you doing much/any manufactured spending? Curious what the threshold is to draw their ire…

      • They’re going through accounts one by one. If you’ve done any MS on the Elite card, you will get shut down eventually. I did minimal MS in January and no MS in february, and they still got me. When I called the number to lending department and pressed him to give me a real answer, his first response was to ask me what it was I was buying in grocery stores that added up to so much.

  3. I still have my Elite DC card

  4. I did about $35-40k of MS on there. Got frozen account for 2 weeks in Dec and then unlocked, then frozen again in late Jan or early Feb. That one didn’t get unfrozen and I finally got letter in the mail Sat saying why account was closed on Feb 5th (i think it was.

    • That’s about how much I was able to push through before being shut down, though mine wasn’t reopened after being frozen in December… and I tried. I called every week or two, pressed as hard as I could, spoke to supervisors, etc–complete stonewall… “handled by a different department, they don’t answer phone calls,” etc…

  5. What’s MS? Sorry, I’m not good with acronyms

Trackbacks

  1. […] Everyone getting shut down with the new premium Diners Club card. (Which may explain why applications have been ‘unavailable’ for months after first returning in September.) […]

  2. […] Why is BMO Harris shuttering Diners Club accounts? by We Fly Free. Disappointing for those who are having their accounts shut down, but hopefully this means BMO Harris are planning on opening applications again at some stage in the near future. […]

  3. […] William Charles Why is BMO Harris shuttering Diners Club accounts? by We Fly Free. Disappointing for those who are having their accounts shut down, but hopefully this […]

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