topic Re: AMEX Membership Rewards - Rip off unless used for travel? in Credit Cards

AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Mon, 02 Aug 2010 04:05:55 GMT

Hi all,

I currently have an AMEX Zync for personal use (Ecopack and Restaurant pack) and an AMEX TrueEarnings cashback card for my business.

I am thinking about replacing the TrueEarnings with an AMEX Green charge card, which participates in the membership rewards program, because I want the credit utilization benefits and the evolving internal credit limit.

Upon doing some research, I've found most of the stuff on the AMEX site (vacation packages, gift cards, electronics) have less than a 1% return associated with their redemption; with few exceptions. For example, I found a Tag Heuer watch for 177,000 points (1,770.00 worth of cash value @ 1% redemption) but turned around and found the identical watch easily for $1300.00. The same goes for Apple products, like iPods - $250.00 worth of points to redeem for a product that can be bought from Apple for $150.00.

In my opinion, the Membership Rewards program for businesses AND personal is a ripoff compared to the TrueEarnings card, which (for the personal) is 3% cashback for gas, 3% restaurants, 2% travel, and 1% everywhere else.

I understand that AMEX points can be redeemed for travel and hotels; when I called AMEX about this, they were vague and said that your AMEX MR points can be worth 1%, less than 1%, or MORE than 1%, depending on the airline and the current airfare deals the airlines have available.

I am wondering if I am missing something here - if I use AMEX MR points just for airfare and hotels, will I consistently get at least a 1% return on my points (or more?), or am I going to get the weak ~0.50% that I am seeing on the AMEX MR website? Anyone reading this who uses AMEX MR points to get free airfare may want to chime in about this?

Re: AMEX Membership Rewards - Rip off unless used for travel?

GST2008 — Mon, 02 Aug 2010 15:38:34 GMT

I use my MR points for giftcards as they generally trade in at a 1% rate that way (e.g. $25.00 g.c. is 2500 points). One of the benefits to the program is that if you do a lot of shopping online, you can use the bonuspoint mall and get 3 or 4 or 5 points per dollar.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Mon, 02 Aug 2010 21:40:11 GMT

Yeah the bonus points mall is pretty neat......but again I'm concerned about redemptions (1% for gift cards is mediocre and 0.50% for other gifts.....horrible). I would use most of my MR points for electronics and travel, but for electronics the payout is 0.40 - 0.50%, and it seems hit or miss with travel.

So I ask - has anyone on this board used their points in an effective manner? Meaning more than 1.0% value received from redemptions....

Re: AMEX Membership Rewards - Rip off unless used for travel?

joestay — Mon, 02 Aug 2010 23:39:44 GMT

When I first was looking for an Amex card, I was taking into account the reward system also. I also took into account my chance of getting the cards I was looking into. After some serious thinking, it looked like the Costco card was the best in rewards for me based on my spending and also because I got a pre-approved mailing for Costco and other charge cards. This brought me up to 2 credit card: Amex Costco and Capital One. I use Capital One for gas, grocercy, and drug store purchases since I get 5 points of each $1 spent. I'm gonna trade in 20,000 points for a $200 gift card, which will make sure I get as close to 5% cash back as possible. Everything else, I charge on the Costco card, unless Amex isn't accepted.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 05:58:40 GMT

@joestay wrote:
When I first was looking for an Amex card, I was taking into account the reward system also. I also took into account my chance of getting the cards I was looking into. After some serious thinking, it looked like the Costco card was the best in rewards for me based on my spending and also because I got a pre-approved mailing for Costco and other charge cards. This brought me up to 2 credit card: Amex Costco and Capital One. I use Capital One for gas, grocercy, and drug store purchases since I get 5 points of each $1 spent. I'm gonna trade in 20,000 points for a $200 gift card, which will make sure I get as close to 5% cash back as possible. Everything else, I charge on the Costco card, unless Amex isn't accepted.

Joe,

Can you explain why you stuck with the AMEX Costco TrueEarnings w/ cash back versus going for an AMEX Charge card under the membership rewards program? I would be interested to hear your thoughts.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 07:58:00 GMT

@Anonymous wrote:
Joe,

Can you explain why you stuck with the AMEX Costco TrueEarnings w/ cash back versus going for an AMEX Charge card under the membership rewards program? I would be interested to hear your thoughts.

Not sure about Joe, but if you are not a big spender and don't travel much, the Amex Costco is the only rewards card from Amex that's worth it. With low spending, any card with a fee is right out, and I make good use of the two 3% categories and decent use of the 2% category. As everything else yields 1%, you cannot really do anything wrong with that card.

Re: AMEX Membership Rewards - Rip off unless used for travel?

joestay — Tue, 03 Aug 2010 17:38:12 GMT

Almost all of the gift card and reward will be based on 1% or less return for each dollar you spent using an Amex charge card for the membership reward program. With Costco Amex Trueearnings, I'm guarentee at least 1% return for each dollar spent. See, with the charge card, you do get 2x points for each dollar spent but with the Coscto card, you also get 2% for each dollar spent. Costco has the advantange here because of the trade in from the membership reward program. Also, with Costco, you get 3% cashback for resturant purchases (including fastfood). Everything else is 1%, which guarantee you can't go under 1% return for each dollar spent. With the cashback from this, I could use the money to buy the things I want by price shopping first for a better deal then for the items that you could get from the membership reward program. Hope you get what I am saying.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 17:49:07 GMT

I can vouch for Costco TE, 3% gas, 2% restaurants and travel (fastfood included as joestay mentioned), 1% everything else. Combine that with the Costco Executive Membership to get 2% extra for Costco spending bringing it up to 3% for Costco purchases. The cashback from both (Costco voucher that can be cashed out) should more than pay the annual fee for the executive membership and some

*Edit* Might want to look into the Starwood Amex too for travel rewards

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 17:45:56 GMT

@Anonymous wrote:

@Anonymous wrote:
Joe,

Can you explain why you stuck with the AMEX Costco TrueEarnings w/ cash back versus going for an AMEX Charge card under the membership rewards program? I would be interested to hear your thoughts.
Not sure about Joe, but if you are not a big spender and don't travel much, the Amex Costco is the only rewards card from Amex that's worth it. With low spending, any card with a fee is right out, and I make good use of the two 3% categories and decent use of the 2% category. As everything else yields 1%, you cannot really do anything wrong with that card.

Yeah, that is a good point, I love the TrueEarnings cash back spread (way better than lots of the other cashback cards, especially now that Chase Freedom has been gimped). I don't travel much, but I would love to do it more often IF I can get AMEX to pay for the airfare and perhaps some of the hotel. I am still trying to ponder, thanks to AMEX's vague explanations, if loading up major business expenses on a membership-rewards enabled AMEX Business Green charge card (or gold/plat) would give me superior travel ability than loading up on my current TrueEarnings for business card.

Since I entertain and promote my company often at restaurants......the TrueEarnings is giving me about $4-500 cash back per month. If I were to put the same expenses on an AMEX Biz Green, I would get around 16-17K of MR points. What concerns me is whether or not 16K of membership reward points equals $400.00 cash back per month (I doubt it, looking at the Membership Rewards store). The only way AMEX Biz Green can give me more benefits over the TrueEarnings is IF the MR points can be converted to frequent flier miles and hotel points at a redemption rate of return of at least 1% or more - is this possible, or even probable?

Re: AMEX Membership Rewards - Rip off unless used for travel?

C6 — Tue, 03 Aug 2010 19:28:47 GMT

Why waste your time and money with the American Express direct issue cards. They're over priced, offer very limited rewards in general, and you're always subject to FR when you don't fit a specific profile. While the Costco Amex card is probably the best current Amex direct offer most would be better served by the Fidelity Amex card. The Fidelity Amex offers a flat 2% back on everything, no annual fee, and a lower interest rate for those that occassionaly revolve debt. Another choice is the USAA Amex which has fair rewards, no fee, and a low 8.9% interest rate for those in the top tier. Perhaps the only reason to apply for an Amex direct issued card is for the reward bonus points as in the current case for their Starwood card. Use the points and cancel it. Even now the Starwood offer is looking minimal when Citibank is offering an AA Amex with 75,000 - 100,000 bonus miles for new customers.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 20:23:51 GMT

The true value in Membership Rewards is not the gift cards or even the basic travel/hotel flight search that both typically offer 1% back or less. Most people use Amex MR for their ability to transfer their MR points to the airline/hotel programs such as Continental, Jet Blue, Hilton, etc. Airline miles can easily net > 1% back and frequent travellers combine their regular miles from flying with the MR points to redeem for flights/hotels.

If you're looking to rack up a lot of miles but are not yet sure which airline you want to redeem on, MR points enable you to collect tons of miles in an airline/hotel agnostic program and then then transfer them to your program of choice when you're ready to book your travel.

The ability to transfer MR points to airlines/hotels is a capability of the Green, Gold, Platinum & Centurion Cards ONLY. Other cards (Blue, Znyc) which participate in MR do not have this ability and as such you are limited to the gift cards or the basic travel options.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 21:42:45 GMT

@Anonymous wrote:
The true value in Membership Rewards is not the gift cards or even the basic travel/hotel flight search that both typically offer 1% back or less. Most people use Amex MR for their ability to transfer their MR points to the airline/hotel programs such as Continental, Jet Blue, Hilton, etc. Airline miles can easily net > 1% back and frequent travellers combine their regular miles from flying with the MR points to redeem for flights/hotels.

If you're looking to rack up a lot of miles but are not yet sure which airline you want to redeem on, MR points enable you to collect tons of miles in an airline/hotel agnostic program and then then transfer them to your program of choice when you're ready to book your travel.

The ability to transfer MR points to airlines/hotels is a capability of the Green, Gold, Platinum & Centurion Cards ONLY. Other cards (Blue, Znyc) which participate in MR do not have this ability and as such you are limited to the gift cards or the basic travel options.

This part is of great interest to me. Since AMEX CSRs can't tell me what their personal experiences have been with the airline/hotel points transfer strategy, could you and others please share of some success stories where you aggressively used accumulated MR points to travel for free while maintaining a >1% redemption return on points?

Again, it seems like the TrueEarnings card is superior to the charge cards at this point for "return on investment," but here's one reason why I am still considering the AMEX Biz Green: because it is a charge card, I can put my large business expenses on it every month and have it NOT mess up my FICO utilization; whereas the credit card must be paid down multiple times a month before the statement cuts. Is this correct? Also I like managing my assets online and Costco TrueEarnings forces me to wait at the end of the year to pick up the rebate check in-store, whereas the MR points can be spent "as you go."

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Tue, 03 Aug 2010 22:57:47 GMT

The main way to get more than 1 or 2% is in redeeming for business class tickets or higher. Coach can also provide value as well. It really depends on if you're a frequent flyer member of the airlines which Amex enable you to transfer to and the ease in which you are able to redeem miles in your program(s) of choice. All of the typical policies (e.g. 25K for domestic coach in most programs, etc) still apply but Amex enables you to reach those goals through spending instead of just by travel.

Amex also has bonus offerings periodically where you get bonus miles when you transfer to an airline partner. E.g. 1 MR point typically equals 1 BA mile but right now 1 MR point = 1.2BA miles as a temporary promotion.

Flyertalk has indepth discussions on this. See link here -> http://www.flyertalk.com/forum/american-express-membership-rewards/1111596-20-mr-transfer-bonus-ba.html

I personally just got the SPG Amex card (also offered by American Express and a similar program to MR with airline transfers but with a lower $65 annual fee) as a result of a 30K bonus points offer I received in the mail.

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Wed, 04 Aug 2010 01:11:00 GMT

@Anonymous wrote:

@Anonymous wrote:
The true value in Membership Rewards is not the gift cards or even the basic travel/hotel flight search that both typically offer 1% back or less. Most people use Amex MR for their ability to transfer their MR points to the airline/hotel programs such as Continental, Jet Blue, Hilton, etc. Airline miles can easily net > 1% back and frequent travellers combine their regular miles from flying with the MR points to redeem for flights/hotels.

If you're looking to rack up a lot of miles but are not yet sure which airline you want to redeem on, MR points enable you to collect tons of miles in an airline/hotel agnostic program and then then transfer them to your program of choice when you're ready to book your travel.

The ability to transfer MR points to airlines/hotels is a capability of the Green, Gold, Platinum & Centurion Cards ONLY. Other cards (Blue, Znyc) which participate in MR do not have this ability and as such you are limited to the gift cards or the basic travel options.

This part is of great interest to me. Since AMEX CSRs can't tell me what their personal experiences have been with the airline/hotel points transfer strategy, could you and others please share of some success stories where you aggressively used accumulated MR points to travel for free while maintaining a >1% redemption return on points?

Again, it seems like the TrueEarnings card is superior to the charge cards at this point for "return on investment," but here's one reason why I am still considering the AMEX Biz Green: because it is a charge card, I can put my large business expenses on it every month and have it NOT mess up my FICO utilization; whereas the credit card must be paid down multiple times a month before the statement cuts. Is this correct? Also I like managing my assets online and Costco TrueEarnings forces me to wait at the end of the year to pick up the rebate check in-store, whereas the MR points can be spent "as you go."

Very much correct. I've been paying twice a month religiously for the past three years, even before i got the *Edit*Costco AMEX, just to keep utilization at optimum levels( <9%)

Like the other poster said, I would look into Starwood AMEX see if it works for you. From reviews I read, theyre pretty generous about converting points into other frequent flyer programs. I'm just not partial to cards with AF

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Wed, 04 Aug 2010 16:05:52 GMT

@Anonymous wrote:
The main way to get more than 1 or 2% is in redeeming for business class tickets or higher. Coach can also provide value as well. It really depends on if you're a frequent flyer member of the airlines which Amex enable you to transfer to and the ease in which you are able to redeem miles in your program(s) of choice. All of the typical policies (e.g. 25K for domestic coach in most programs, etc) still apply but Amex enables you to reach those goals through spending instead of just by travel.

Amex also has bonus offerings periodically where you get bonus miles when you transfer to an airline partner. E.g. 1 MR point typically equals 1 BA mile but right now 1 MR point = 1.2BA miles as a temporary promotion.

Flyertalk has indepth discussions on this. See link here -> http://www.flyertalk.com/forum/american-express-membership-rewards/1111596-20-mr-transfer-bonus-ba.html

I personally just got the SPG Amex card (also offered by American Express and a similar program to MR with airline transfers but with a lower $65 annual fee) as a result of a 30K bonus points offer I received in the mail.

Right now AMEX is offering 3X MR points on airfare purchased on PLAT cards (between 7/1/10 - 9/30/10). Again, flyertalk is a great resource for finding out more about these types of promotions (some are by invite only tho).

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Wed, 04 Aug 2010 17:41:39 GMT

I don't think the 1% return on GCs is all that bad - certainly beats Citi "thank you points" redemption

Discover's GC redemption rate is fabulous (can you beat a $45 or $50 gc for $40?). And statement credits 1:1 aren't bad either.

Re: AMEX Membership Rewards - Rip off unless used for travel?

C6 — Wed, 04 Aug 2010 20:17:14 GMT

1% return in gift certificates is bad when one can get 2% back in cash elsewhere. With regards to airline miles, unless one can book many months in advance, the net return per mile is usually only 1%. As an example, an unrestricted first class ticket from the mainland to Hawaii is 200,000 miles. I can frequently buy the ticket for $2000 - $2500 plus I get 2% back on that purchase and earn ~15,000 miles. With cash I'm not limited to one airline and I don't have to jump through any hoops

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Thu, 05 Aug 2010 15:59:33 GMT

@C6 wrote:
1% return in gift certificates is bad when one can get 2% back in cash elsewhere. With regards to airline miles, unless one can book many months in advance, the net return per mile is usually only 1%. As an example, an unrestricted first class ticket from the mainland to Hawaii is 200,000 miles. I can frequently buy the ticket for $2000 - $2500 plus I get 2% back on that purchase and earn ~15,000 miles. With cash I'm not limited to one airline and I don't have to jump through any hoops

Re: the bolded part - that's about earning, not redeeming.

I have a 2% cash back card, but if shopping at Amex mall earns 3-5-10% "points" and I get a a 25.00 gc at 2500 points, that works out better, assuming that I can USE the gc, of course.

I get 3% on my Citi Driver's Edge at groceries, drugstores and gas stations, plus "drive rebates" - If I were stuck with the TY points, rather than the cash, I'd drop it in a heartbeat 'cuz the redemption value is so poor for TY points.

I don't travel much, so miles would be wasted on me, no matter how many millions I had.

It's ymmv as always...

Re: AMEX Membership Rewards - Rip off unless used for travel?

Anonymous — Sun, 22 Aug 2010 15:12:44 GMT

Keep in mind if using for business purposes a cash back or cash equivilent card will increase your tax liability whereas using points for airline miles, even for personal travel will not. This is a big reason amex MR is preferable over a cash back card for business spending. So for me a 2% cash back card for business spending really only nets me about 1.3%. It is not hard to get more than 1.3% from MR points.

The best bang for your buck is international first or business class flights by transferring to airline partners. Sometimes redemption ratios are are 5% or more (whether you would spend that much on your own is a different story). If you don't fly intl, domestic seats can be a decent remdemption value as well, but usually only on expensive or last minute flights.

Another good card is the Amex SPG, you effectively earn 1.25 miles per dollar spent.

Re: AMEX Membership Rewards - Rip off unless used for travel?

CHARGE_IT — Mon, 23 Aug 2010 08:54:55 GMT

I use mr points for travel only and regularly for years. It seems to be the only way to get full or higher value. Purchasing or using mr points as cash usually cuts their value by twenty five percent.

The last half of 2009 they ran a 3 times points special on gas , grocery, pharmacy and seems like something else. Just six months of this really boost the accrued value and make the one percent irrelavent.

Greatest value for mr points always comes from booking travel on AMEX and second would be purchase through SHOP AMEX. Never use them to pay off your bill. Big loss there.

They run bonus programs every year, and more than once, so it is really hard to make a judgement about value. It would seem that is part of the value of membership; If you are a member you will know what is available and even then, some members will get better deal depending on the card , use and performance.

So, what you read on line about the cards and mr points is a bottom line projection. It ends up higher always when average over a year. My points always pay for my 'big' vacation each year, and with the six months boost last year, I am doing even better than usual. Paired with vacation spots desperation in th economy, I will be a having a special vacation this year.

Good luck,