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…
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?