American Express Membership Rewards® Program Review

Nov 23, 2016 | Be First to Comment!

American Express Personal credit cards

This year, American Express celebrated the 25th anniversary of its Membership Rewards® program. And in the rapidly changing credit card industry, nothing sticks around that long unless it’s doing something right. The Membership Rewards® program was one of the first to discover the formula of offering rewards points that could be redeemed for many different kinds of awards.

As with any credit card reward program, the key to receiving the most value from the American Express Membership Rewards® program is to learn how to earn the most points, and how best to spend them.

Membership Rewards® Basics

Earning Points

With the Membership Rewards® program, the number of points you earn from your spending will depend on the card you have. Most cards simply offers one point per dollar spent, and double points for reservations booked through Amex Travel. Yet some offer bonus points for making specific types of purchases such as gas, groceries, or airline tickets. You can keep your points as long you have at least one American Express card account open, and it’s one that participates in the Membership Rewards® program.

Spending Points

Unlike a credit card that offers miles with an airline’s frequent flyer program or points with a hotel’s loyalty program, Membership Rewards® points are held by American Express, the card issuer.

Once you’ve earned points, you can redeem them for dozens of awards including gift cards, merchandise, and travel reservations. Another option is to redeem points for purchases from retail partners:

American Express Retail Partners

Retail & Travel Partners
Amazon.com
BestBuy.com
Uber
Ticketmaster
Telecharge

You can also redeem points to pay for charges to your card. And with most Membership Rewards® cards, you can choose to transfer your rewards to airline miles or hotel points.

Currently, you can transfer your points to miles with 17 airline programs, points with three hotel chains, or to the Plenti retail rewards program. You can transfer points to most of these programs at a 1:1 ratio, except as noted:

American Express Membership Rewards Partners

Airline transfer partners Hotel transfer partners
Aeromexico Choice Privileges
Air Canada Aeroplan Hilton HHonors (1,000 Membership Rewards points = 1,500 Hilton HHonors Points)
KLM and Air France Flying Blue SPG Starwood Preferred Guest (1,000 Membership Rewards points = 333 Starpoints)
Alitalia Mile Miglia
ANA Airlines
Asia Miles
British Airways Avios (250 Membership Rewards = 200 Avios)
Delta Skymiles
El Al (1,000 Membership Rewards = 20 Matmid points)
Emirates Skywards
Etihad Guest
Hawaiian Airlines
Iberia Plus (250 Membership Rewards points = 200 Avios)
JetBlue TrueBlue (250 Membership Rewards = 200 TrueBlue points)
Singapore Airlines KrisFlyer
Virgin America Elevate (200 Membership Rewards = 100)
Virgin Atlantic FlyingClub

How to Maximize Your Membership Rewards® Points

With so many ways to redeem your points, it can be hard to choose the best awards. Whenever you are redeeming points and miles of any kind, you’ll want to choose the options that offer the most value per point redeemed. As I will show you, most award options offer you just one cent per point towards merchandise, gift cards, and travel reservations. With a penny per point as your floor, your goal is to look for awards that offer more value.

Transfers to Airlines

Most of the time, the use of your points will be transfers to airline miles. Many of the 17 different airline transfer partners are extremely valuable for travel on it and its partners. For example, Flying Blue(Air France and KLM) and Delta SkyMiles and can be redeemed for award flights on those airline and any other SkyTeam partners. British Airways miles can be redeemed for flights on American Airlines and other OneWorld partners. Miles from Air Canada, Singapore, and ANA can be redeemed for flights on United and other Star Alliance partners. You can also transfer points to independent carriers like Hawaiian, JetBlue, and Virgin America.

On the other hand, it’s unlikely that you will see much value from partners with weak frequent flyer programs such as El Al, Emirates, Etihad, and AeroMexico. But when you are able to redeem miles for expensive flights in business or first class, or last minute reservation, it’s possible to receive several cents in value per point transferred.

For example, I’ve transferred points to British Airways, which offers flights under 1,150 miles on American or Alaska Airlines for as little as 7,500 points each way. If you are able to use your points for a last minute flight that would have cost you hundreds of dollars, then you will receive several cents in value for your points. I’ve also used Air Canada miles for business class tickets to Europe, which are 110,000 or 115,000 miles round-trip, depending on your destination. A ticket like this might cost $5,000, so I’m receiving over four cents per point in value.

Finally, American Express will regularly offer airline point transfer bonuses, that allow you to enjoy a more favorable transfer ratio.

Transfers to Hotel Points

I would love it if you could get just as much value from hotel programs as you do from airline miles, but the lower transfer ratios makes it very difficult. Starwood Preferred Guest is an outstanding hotel program, but I would never transfer 1,000 Membership Rewards® points to receive just 333 Starwood points. Choice hotels can offer some excellent values, especially in Europe, but it’s uncommon to receive more than one cent per point.

The best hotel option is Hilton, which offers 1,500 points for each 1,000 Membership Rewards® redeemed. However, you will rarely get more than two-thirds of cent in value a per point from the Hilton program. It might charge 40,000 points for a hotel room that costs under $200. The best reason to transfer any of your points to any these hotel programs is to top off an account that’s just short of what you need for a valuable award.

Reservations Through Amex Travel

You can use your Membership Rewards® points to make travel reservations directly American Express’s travel web site. Most of the time, you will only receive one cent in value per point redeemed towards flights and other reservations. But if you have the Enhanced Business Platinum Card® and book airfare directly through American Express travel, then you’ll receive 50% of your points back. When you can get two cents in value for each point, it’s a reasonably good way to redeem your points.

Gift Cards

You can redeem your points for gift cards to many retailers at a poor value of just one cent per point. However, if you redeem points for a generic American Express card, you will receive a pitiful half a cent per point!

Merchandise

At most, you can expect to receive a penny a point for merchandise awards from American Express or its retail partners. At worst, your points will go towards the full retail value of an item that’s probably available elsewhere for less.

Pay with Points

You can use your points to pay for charges, but this option just offers you terrible 0.6 cents per point.

Best Cards to Earn Membership Rewards®

American Express currently offers six personal and four business credit cards that offer rewards in the form of Membership Rewards® points. In addition, American Express Corporate Card users can opt-in to the Membership Rewards® program for a fee.

Here’s a complete list of the cards that participate in the program, and are currently offered to new applicants:

Best cards to earn AMEX Membership Rewards

Personal Cards Business Cards
American Express® Green Card Blue for Business® Credit Card (limited participation in Membership Rewards)
Gold Card from American Express Business Green Rewards Card
Premier Rewards Gold Card from American Express The Business Gold Rewards Card
Platinum Card® from American Express The Enhanced Business Platinum Card®
mex EveryDay® Preferred Credit Card
Amex EveryDay® Credit Card

My Three Favorite Membership Rewards® Cards:

Amex EveryDay® Preferred Credit Card

I love this card because it offers 3x points at US supermarkets on up to $6,000 spent each year. 2x point are earned at US gas stations and you get one point per dollar spent elsewhere. Best of all, you get a 50% points bonus during each statement period that you make 30 or more transactions. This means you can earn 1.5x on everything, 3x on gas, and 4.5x at the grocery store. There’s a $95 annual fee for this card.

Premier Rewards Gold Card from American Express

This is another card that offers lots of bonus points. You earn 3x points for flights booked with the airlines, 2x points at US gas stations, restaurants, and grocery stores, and 1x elsewhere. It has a $195 annual fee, but it also features a $100 annual statement credit towards airline fees.

The Enhanced Business Platinum Card®

American Express recently made substantial upgrades to this card, which is why they call it “enhanced.” It now offers 1.5x on purchases of over $5,000 as well as the 50% bonus points when redeeming rewards for flights booked through Amex travel. And it offers dozens of perks and benefits such as airport business lounge access and a $200 annual credit towards airline fees. It even includes elite status with Hilton and Starwood hotels, as well as three rental car companies. There’s a $450 annual fee for this card.

How Membership Rewards® Compares with Other Credit Card Reward Programs

Chase Ultimate Rewards

This program is the strongest competitor of the Membership Rewards® program. Chase offers several different credit cards that feature as much as five points per dollar spent. Points can be transferred to seven airline and four hotel programs, each at a 1:1 ratio. Also, several cards allow you to book travel reservations through Chase at 1.25 cents per point, and the new Sapphire Reserve offers 1.5 cents per point.

Citi ThankYou Rewards

This is the weakest of the three major programs, but it’s rapidly improving. Its airline transfer partners are mostly foreign carriers with pretty weak award charts, but it recently added JetBlue. Fortunately, the Citi ThankYou Premier and Prestige cards offer good bonus point offers for things like travel, entertainment and dining purchases.

Conclusion

I’m a big fan of the American Express Membership Rewards® program because I’ve been able to redeem my points for some fantastic award flights in business class. In fact, I like to keep a healthy balance of both Membership Rewards® points and Chase Ultimate Rewards points, just in case I need to book last minute travel to somewhere. Once you understand the best ways to earn and spend these valuable points, you can receive far more value from your travel rewards card than you may have thought possible.

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