topic Re: Amex Membership Rewards Points, what's your strategy? in Credit Cards

Amex Membership Rewards Points, what's your strategy?

NoMoreDebt — Mon, 01 Apr 2024 22:51:37 GMT

How long do you save up your points before you use them? For my situation I have the option to cash them out into Charles Schwab which seems like a nice way to go if not using them for airfare.

If someone wasn't traveling for roughly 2 to 3 years would you save them at the risk of them being nerfed or use them/cash them out?

Re: Amex Membership Rewards Points, what's your strategy?

Anonymous — Tue, 02 Apr 2024 01:00:31 GMT

@NoMoreDebt wrote:
How long do you save up your points before you use them? For my situation I have the option to cash them out into Charles Schwab which seems like a nice way to go if not using them for airfare.

If someone wasn't traveling for roughly 2 to 3 years would you save them at the risk of them being nerfed or use them/cash them out?

I think it depends on your goal and possibly the amount you have and your potential earning rate without travel. If you are set on a real aspirational travel award, cashing them out isn't going to get there, so it might (or might not!) be worth taking the risk of devaluation etc and keeping them, and hopefully adding more.

But if it's more casual, e.g. maybe I will use them for a domestic flight sometime, and then you realize that's not going to happen soon, cashing out might be more appealing.

This of course happened with Covid, when no-one knew if, let alone when, normal travel would return. I cashed out my UR points (thanks, Pay Yourself Back!) and I'm sure others cashed in MRs via CS or maybe gift cards

Re: Amex Membership Rewards Points, what's your strategy?

swankytiger — Tue, 02 Apr 2024 01:09:24 GMT

Cash them out with the Schwab card and put them in VTI/VOO/SCHB/etc

Re: Amex Membership Rewards Points, what's your strategy?

CorpCrMgr1 — Tue, 02 Apr 2024 01:59:04 GMT

I cash them in ASAP. I know people that fly and visit Europe on points.

Re: Amex Membership Rewards Points, what's your strategy?

Shooting-For-800 — Tue, 02 Apr 2024 02:49:03 GMT

I use all of mine at Home Depot from HD gift cards.

$1 per 100 points.

Simple and easy.

Re: Amex Membership Rewards Points, what's your strategy?

NoHardLimits — Tue, 02 Apr 2024 03:07:50 GMT

I use my MR points for inexpensive airline revenue tickets or to top off my Delta SkyMiles account for an award redemption. I'm not putting much spend on my MR earning cards these days, so I will likely exhaust my supply of points within the next year or so.

Re: Amex Membership Rewards Points, what's your strategy?

FicoMike0 — Tue, 02 Apr 2024 03:24:50 GMT

I remember a couple of European vacations on points. Two week, athens, paris, geneva. 747 first class that was nice. I had a biz trip in la the week after. I stayed an extra day, flew back geneva to Paris to JFK to lax, long day, traveling with the sun.

These days, I mostly cash them in.

Re: Amex Membership Rewards Points, what's your strategy?

redpat — Tue, 02 Apr 2024 06:36:52 GMT

My perpetual running MR balance runs between 300k - 400k and use them for transfer partners. I never worry about MR devaluation since there are so many ways to use them. On the other hand I have seen many transfer partners have devaluation, but some transfer bonuses off-set some of those issues. I have never gone to 0 MR points and never will, I redeem about 300k annually.

My advice is, don't panic and plan a trip that you would like to take and if you need to accumulate some, do so.

Those who panic miss out.

Re: Amex Membership Rewards Points, what's your strategy?

okurosetta — Tue, 02 Apr 2024 17:01:19 GMT

How have you used points in the past? If so, what on? How would you want to use the points? If flights, do you travel domestic, international? If hotels, do you stay at high-end properties, something decent but good value, or the cheapest possible? Are you sitting on a lot of points?

The answers for which strategy would be best could go so many ways based on those answers.

I am similar to @redpat as I like to have a stash of points available for redemptions. If a good points booking comes up in your searches, you'll either have enough points or you won't. I'd rather have enough points.

There is a balance to this - I'd prefer to earn more than I burn, but not significantly more. And so long as one is earning at least or more than they burn, if they are sitting on a ton of points, cashing out may make sense. I went ham on Amex SUBs for a while, earning well over 700k MR from SUBs alone, and did cash out quite a bit of MR to Schwab at 1.1cpp. But I only did this because I had excess MR - now that I have gone through the various SUBs (basically only NLL offers for me left), I currently have 145k and would prefer to stay around 200-300k at most times, so redeeming to Schwab isn't even a thought.

Re: Amex Membership Rewards Points, what's your strategy?

OrangeRange — Tue, 02 Apr 2024 17:59:03 GMT

I don't see MR points as being devalued over time as the points themselves have multiple uses, and aren't what changes in value, it's the transfer partner redemption values that do. I'm much more cautious of keeping my American Airlines miles too high and unused for example, as there could always be a sudden devaluation of them.

I have around 310K MR points now. I usually use mine to top-off SkyMiles redemptions for flights I take domestically and to Canada. I have done a few Hilton transfers as well. Ideally, I'll always keep a reserve of about 200K points for any international flight options, and the rest will just go to domestic flights and any sporadic Hilton stays I want to do but don't want to pay for.

If you don't have any immediate use cases, then cash out or let the stockpile continue to grow until you do.

Re: Amex Membership Rewards Points, what's your strategy?

Anonymous — Tue, 02 Apr 2024 19:05:16 GMT

@OrangeRange wrote:
I don't see MR points as being devalued over time as the points themselves have multiple uses, and aren't what changes in value, it's the transfer partner redemption values that do. I'm much more cautious of keeping my American Airlines miles too high and unused for example, as there could always be a sudden devaluation of them.

Yes, but for some this is a distinction without much of a difference. If my dream is to fly SuperFirstClassYesReally(TM pending) round the world on LTL Airlines (incorporation pending) and it currently takes 250K MR, but by the time I have those it's gone up to 400K MR, yes, I can still buy gifts at 1MR per cent as I could before, but since that wasn't my goal, from my view the MR has devalued.

Re: Amex Membership Rewards Points, what's your strategy?

FlaDude — Tue, 02 Apr 2024 19:15:23 GMT

I accumulate mine perpetually towards the goal of some future "trip of a lifetime" that may or may not ever happen.

Re: Amex Membership Rewards Points, what's your strategy?

OrangeRange — Tue, 02 Apr 2024 19:22:35 GMT

@Anonymous wrote:
@OrangeRange wrote:
I don't see MR points as being devalued over time as the points themselves have multiple uses, and aren't what changes in value, it's the transfer partner redemption values that do. I'm much more cautious of keeping my American Airlines miles too high and unused for example, as there could always be a sudden devaluation of them.

Yes, but for some this is a distinction without much of a difference. If my dream is to fly SuperFirstClassYesReally(TM pending) round the world on LTL Airlines (incorporation pending) and it currently takes 250K MR, but by the time I have those it's gone up to 400K MR, yes, I can still buy gifts at 1MR per cent as I could before, but since that wasn't my goal, from my view the MR has devalued.

Good point, but the thing is you have many more options on different airlines besides LTL to get there with MR (or UR/TYP vs. airline-specific currency). One program may devalue its miles, and another may keep them steady or have a fixed award chart based on distance/season. It takes more work to find those sweet award spots, but IMO that's part of the game if you want to be invested in the MR system.

Over time, inflation affects everything. Dollar and points inflation won't stop, so I should have modified my statement and said hoarding indefinitely isn't wise. If one isn't going to travel in 2-3 years time, then cashback is the better option.

Re: Amex Membership Rewards Points, what's your strategy?

Aim_High — Wed, 03 Apr 2024 12:11:02 GMT

My personal opinion is that redeeming MRs for anything other than travel via transfer to partners is likely a losing proposition for most consumers. That's because that most of the MR-earning cards (Platinum; Gold; Green; Everyday Preferred) tend to have annual fees and I would imagine that most consumers have at least some 'spoilage' of unused AF credits that detracts from their earnings rate. Of course, there are always exceptions, but AMEX 'coupon-book credits' are highly specific to either limited merchants or usable time frames. I believe AMEX counts on that spoilage and consumers not paying attention to make the cards more profitable. And the non-travel redemptions are also normally much lower in value than for travel. Sure, with the Schwab Platinum it's possible to earn 1.1 cpp versus only 0.6 cpp in cash value, but even at that level the unrecovered AF in the calculation could drag down earnings for a consumer for whom that card is not a natural fit. Same with gift cards, normally limited to 1 cpp or even less. I've found that even the baseline for travel through the portal is about 1 cpp also, so transferring points is where it becomes much more lucrative. Consequently, if someone is not transferring MRs and if they don't fully and organically recover AF through credits or through the equivalent cash value of perks like lounge access, they may be earning lower rewards with non-travel redemptions than if they just stuck with no-AF cash back cards. Not only might they meet the same rewards levels they'd get with MRs, but they'd also simplify having to manage use of the various credits.

After all, those of us on My FICO who are familiar with card options realize that the MR earnings rates (even at the higher 5x/4x/3x) are not superior to cash back cards if the redemption rate is just 1 cpp. For the higher-earning categories of travel, dining, groceries, or transit, it's possible to earn as much or more without paying an AF or worrying about credits. Where MRs shine is for someone who can easily recoup the AF through either credits on things they would buy anyway, perks like lounge access that they would use or appreciate anyway, or from the higher valuation when redeeming points for travel far in excess of 1 cpp.

All of the above is why I'm sitting on a large pool of MRs after closing my AMEX Gold card and applying for the no-AF Blue Business Plus. BBP gives me the option to retain and even accumulate further MRs if I choose to do so without an AF. And BBP earns MRs at 2 MRs/dollar on uncategorized spend, up to a high $50K annual spending cap. At the same time, I believe I get better overall value from Chase URs and Sapphire Reserve without so many coupon-book games. And URs always have a base cash value of 1 cpp without having to resort to gift cards or opening additional charge cards like a Schwab Platinum.

With all of that said, I would suggest hanging onto the MRs for travel if there is any chance you could use them in the next few years. I agree with posts above that acting too rashly could be counter-productive. And also that MRs are unlikely to be substantially devalued.

Re: Amex Membership Rewards Points, what's your strategy?

MrDisco99 — Tue, 02 Apr 2024 20:21:22 GMT

Planning a trip to Paris in late 2025. Saving up MR and UR points so we can go business class and stay someplace nice for free.

Re: Amex Membership Rewards Points, what's your strategy?

okurosetta — Wed, 03 Apr 2024 16:43:30 GMT

@Aim_High wrote:
All of the above is why I'm sitting on a large pool of MRs after closing my AMEX Gold card and applying for the no-AF Blue Business Plus. BBP gives me the option to retain and even accumulate further MRs if I choose to do so without an AF. And BBP earns MRs at 2 MRs/dollar on uncategorized spend, up to a high $50K annual spending cap. At the same time, I believe I get better overall value from Chase URs and Sapphire Reserve without so many coupon-book games. And URs always have a base cash value of 1 cpp without having to resort to gift cards or opening additional charge cards like a Schwab Platinum.

BBP is such a beast. I find it gets the travel Amex Offers that I had seen on their charge cards like Gold, Plat, and Green. For example we recently used a 20% Amex Offer for $50 off a Marriott that was already the best booking. I don't often see travel Amex Offers like this on other cards, including my Marriott card, so to see such valuable offers on a no annual fee card is ridiculous.

One thing I enjoy about MR is using Rakuten. I have the Rakuten browser extension installed and yes, it does get annoying - it is currently up as I type this - but just by clicking on it as I check-out whenever I shop online, including forgetting sometimes, I earn an average of 30k MR per year. Sometimes it's the epic 1 point trips from Walmart orders when only one small item qualifies, other times there's a big multiplier on a heavy shopping day, such as when we buy an item we planned on obtaining at a sale rate with a high multiplier, which can be 10X or higher.

We recently booked a great redemption, Delta economy ALB -> DTW -> YYC for two people, 25k points + $11.20 in taxes +$15 to transfer 25k MR -> Delta. The paid rate was $747.90 and we were eyeing a ~$1635 round-trip with United. No points option for the return but United still reasonable one-way paid at ~$810, so was OK booking one-way points and one-way paid. Math works out to: ($747.90 - $11.20 - $15) / 25,000 = 2.89 cents per point.

Clicking on the Rakuten browser extension nets me 30k MR per year and I just used 25k MR + $26.20 for a flight for two from Albany NY to Calgary. Sure, I am using a great redemption for an example, but all you need is an MR-earning card to utilize Rakuten, and BBP is one without an annual fee, that earns 2X MR on general spend and has great Amex Offers to boot.

BBP is a beast. A free card combined with a free shopping portal gets me basically free airfare (only pay surcharges). Ridiculously strong card.

Re: Amex Membership Rewards Points, what's your strategy?

redpat — Wed, 03 Apr 2024 07:07:09 GMT

@okurosetta

See if there is any restaurants in your area using rakuten dining for 7x using BBP.

Re: Amex Membership Rewards Points, what's your strategy?

okurosetta — Wed, 03 Apr 2024 13:12:32 GMT

@redpat wrote:
@okurosetta

See if there is any restaurants in your area using rakuten dining for 7x using BBP.

Oh, for sure. There aren't many restaurants in my area on there, but it is sweet to earn 5X TYP + 5X MR when it works out.

Re: Amex Membership Rewards Points, what's your strategy?

K-in-Boston — Thu, 04 Apr 2024 19:02:49 GMT

@redpat wrote:
My perpetual running MR balance runs between 300k - 400k and use them for transfer partners. I never worry about MR devaluation since there are so many ways to use them. On the other hand I have seen many transfer partners have devaluation, but some transfer bonuses off-set some of those issues. I have never gone to 0 MR points and never will, I redeem about 300k annually.

My advice is, don't panic and plan a trip that you would like to take and if you need to accumulate some, do so.

Those who panic miss out.

Totally agree with you. An overwhelming majority of my annual spending is on Membership Rewards-earning cards and there isn't much at all that doesn't go onto credit cards. I let them build up for a couple of years (using them, but not as quickly as I was earning them) and ended up using about 1.2 million last year and about 500k this year. At one point in January I was down to about 1000 (which was crazy to see) after some transfers for business class award fares, but I'm already back to 200k or so. Definitely not worried about devaluation on MR points, since no matter what the value is never going to be as low as a transfer to Schwab, gift cards, or pay with points redemptions.

Re: Amex Membership Rewards Points, what's your strategy?

unsungivy — Fri, 05 Apr 2024 12:32:36 GMT

I sit on them forever and have the AmEx CSR feel the need to remind me that they're there. I'm at 500k+.

How much does first roundtrip class to Australia take? 🤔 One of these days. Maybe.