Spreading the word about your favorite American Express card and its benefits can earn you extra Membership Rewards, which you can apply toward travel, shopping and other benefits. To use the AmEx Refer a Friend program, all you need to do is share your unique referral link. Each person who applies through your referral and is accepted as a cardholder will net you a bonus.
Just keep in mind that not everyone will be eligible, and your bonus earnings can have tax implications. Here’s everything you need to know to get the most out of the AmEx referral program.
What Is AmEx Refer a Friend?
Like other major credit card issuers, American Express has a referral program designed to reward you for encouraging your friends and family to open an account.
But unlike other issuers, AmEx Refer a Friend offers you a bonus no matter which card your friend is approved for, i.e., it doesn’t have to be from the same “card family” as the card you carry. With over 25 cards available, that freedom may make it more likely your friends will find the right fit.
To invite a friend, share your unique referral link. As long as your friend uses your link to apply, American Express will keep track of their application and reward you if they’re approved. You can then expect it to take eight to 12 weeks for the bonus points to be reflected in your account.
Referral Rewards
Eligible American Express cardholders earn Membership Rewards points, which offer a wide variety of redemptions. You can apply them toward flights, hotels and rental cars booked through the American Express travel portal, transfer them to a travel partner, spend them at retailers like Amazon, buy gift cards, use them to cover eligible purchases or deposit them into an American Express checking or savings account.
“I always tell my clients to look for ways to cut down their costs,” says Karla Dennis, an American Express cardholder and CEO of Karla Dennis and Associates, an accounting, tax and small business services firm based in the Los Angeles area. “Being able to refer someone to American Express gives me an opportunity to utilize my bonus points to buy things that I normally would buy on a day-to-day basis (while reducing overall monthly outlay),” she says.
Cardholders can maximize their rewards through card spending, welcome offers and special shopping offers in addition to referral bonuses. As a result, it’s possible for cardholders to earn thousands of Membership Rewards points from referrals.
“I always encourage my clients to take advantage of credit card referral bonuses,” says Gisselle FeQuiere, founder of Gisselle Tax & Accounting Firm and a tax strategist for small businesses. “Because, let’s face it, who doesn’t love ‘free’ money?”
However, the number of points you can earn through the AmEx Refer a Friend program may vary depending on:
— The card you have.
— How many friends you refer and are accepted.
— Whether you’re eligible for an active referral promotion.
— The limit for your selected card.
Plus, your friend may be able to earn a welcome offer of their own — often worth thousands of points — if they meet certain requirements.
[Read: Best Sign-up Bonus Credit Cards.]
How to Refer a Friend to American Express
You have several ways to take advantage of the card referral bonus depending on your preference and the device you’re using. If you want to refer a friend via email, you’ll need to do it through the American Express email referral tool.
Refer a Friend Via Email
1. Log in to your account on the American Express website, the American Express referral landing page or your American Express mobile app.
2. Select your card (or the card you want to refer).
3. Select the “Refer Now” button.
4. Enter your friend’s email address to send a referral through email.
If your friend has previously declined to receive communications from American Express (such as opting out of email newsletters), they might not receive your referral. Just send them a referral link instead.
Refer a Friend Through Your Unique Referral Link
1. Log in to your American Express account and choose the card you’d like to refer.
2. Scroll down to “Refer by other channels.”
3. Select “Copy” to copy the referral link.
4. Open a text message or social media message window, paste the referral link and send to your friend.
5. Be sure to notify your friend that you will receive a referral bonus if they apply and are approved.
Referral Restrictions
There are some restrictions to keep in mind when using the Refer a Friend program:
— Not all American Express products are eligible for referrals.
— You won’t receive a bonus if your friend is not approved.
— Your account must be in good standing to earn bonuses.
— Don’t broadcast your referral to strangers; your referrals should be people you’re personally acquainted with.
For complete terms and conditions, check the cardholder agreement for your particular card. You can access this from your American Express account.
Your Bonus May Be Taxable
It’s important to remember that bonus offers like this are taxable income
. American Express may issue you a Form 1099-MISC for your federal taxes if you earn more than $600 in rewards.
However, you should be tracking this and all income regardless of whether you receive a form, says Dennis. For instance, you may not earn more than $600 from AmEx rewards, but perhaps you’ve referred friends to other cards from other issuers, too — it can all add up.
“I may not, in any one company, go over the $600, but in the aggregate of multiple companies, I may go over the $600,” says Dennis.
Regardless of whether you receive a Form 1099, remember to track your rewards income across all of your cards and claim it on your taxes.
“I don’t think that people realize that pretty much any income you’re receiving, unless excluded by the code, is taxable,” says Dennis.
The exception is if you give away your bonuses.
“If you’re thinking about taxes, you could donate those referral bonuses to charity and use them as deductions,” says FeQuiere. “It’s a win-win.”
More from U.S. News
How to Maximize Points With the AmEx Trifecta
How to Take Advantage of Credit Card Referral Bonuses
Are Credit Card Rewards Taxable?
AmEx Refer a Friend: How Does It Work? originally appeared on usnews.com
