Question: Charles Schwab AMEX Platinum Multi-year agreement renewal?

[TheFIGuy]

Curious on if anyone has heard of Charles Schwab and American Express renewing their multi-year agreement? Today I was doing some research around the contract terms and definitions and I'm a bit fearful. But again FEAR = False Evidence Appearing Real so please read below and let me know if this makes sense!

Definition:

• Multi-year: "A multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. Such contracts are issued under specific congressional authority for specific programs."
  • Source: https://www.fpds.gov/help/Multiyear_Contract.htm

Timeline:

• ~ March 2015 - "American Express (NYSE: AXP) today announced a new exclusive multi-year agreement with Charles Schwab & Co., Inc. to create two new premium co-branded cards. With the agreement recently finalized, the cards are expected to be available in early 2016."
  • Source: https://www.marketscreener.com/quote/stock/AMERICAN-EXPRESS-COMPANY-4814/news/American-Express-Annou...
• ~ March 2020 - Estimated multi-year agreement with Charles Schwab & Co., to have ended or be up for renewal
• ~ Q3 2020 - Charles Schwab & Co., acquired TD Ameritrade  "We expect the transaction to close in the second half of 2020 with integration efforts to begin immediately thereafter."
  • Source: https://www.aboutschwab.com/announcement
• TD Ameritrade has a credit card agreement with a visa for it's "client rewards" card which Schwab just acquired.
  • Source: https://www.tdameritrade.com/client/creditcard7/index.html

Talking Points:

• To those who're way more intelligent than I in the AMEX CC travel game, should we be bracing ourselves?
• I haven't noticed any news regarding renewal or termination of the agreement, but seeing the multi-year agreement should be or has already ended what should cardholders expect?
• I have been cashing out MR points to Schwab every 10k MR just because of the data points above and my paranoia.

Thanks for the replies and insight in advance!

[longtimelurker]

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@TheFIGuy wrote:

Curious on if anyone has heard of Charles Schwab and American Express renewing their multi-year agreement? Today I was doing some research around the contract terms and definitions and I'm a bit fearful. But again FEAR = False Evidence Appearing Real so please read below and let me know if this makes sense!

Definition:

• Multi-year: "A multi-year contract means a contract for the purchase of supplies or services for more than 1, but not more than 5, program years. Such contracts are issued under specific congressional authority for specific programs."
  • Source: https://www.fpds.gov/help/Multiyear_Contract.htm

Timeline:

• ~ March 2015 - "American Express (NYSE: AXP) today announced a new exclusive multi-year agreement with Charles Schwab & Co., Inc. to create two new premium co-branded cards. With the agreement recently finalized, the cards are expected to be available in early 2016."
  • Source: https://www.marketscreener.com/quote/stock/AMERICAN-EXPRESS-COMPANY-4814/news/American-Express-Annou...
• ~ March 2020 - Estimated multi-year agreement with Charles Schwab & Co., to have ended or be up for renewal
• ~ Q3 2020 - Charles Schwab & Co., acquired TD Ameritrade  "We expect the transaction to close in the second half of 2020 with integration efforts to begin immediately thereafter."
  • Source: https://www.aboutschwab.com/announcement
• TD Ameritrade has a credit card agreement with a visa for it's "client rewards" card which Schwab just acquired.
  • Source: https://www.tdameritrade.com/client/creditcard7/index.html

Talking Points:

• To those who're way more intelligent than I in the AMEX CC travel game, should we be bracing ourselves?
• I haven't noticed any news regarding renewal or termination of the agreement, but seeing the multi-year agreement should be or has already ended what should cardholders expect?
• I have been cashing out MR points to Schwab every 10k MR just because of the data points above and my paranoia.

Thanks for the replies and insight in advance!

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Your definition of "multi-year contract" clearly applies only to those involving agencies of the Federal Government, others do not require congressional approval!   So the 5 year max doesn't apply here either.   Do you have any reason for believing the contract was for 5 years?

[TheFIGuy]

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@longtimelurker wrote:

Your definition of "multi-year contract" clearly applies only to those involving agencies of the Federal Government, others do not require congressional approval!   So the 5 year max doesn't apply here either.   Do you have any reason for believing the contract was for 5 years?

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Negative just looked up multiple definitions of "multi-year agreements" via google. I was unable to find any additional information concerning the Charles Schwab and American Express agreement term length. Good point regarding Federal Government contracts! So you believe it could be for a longer-term?

[longtimelurker]

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@TheFIGuy wrote:

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@longtimelurker wrote:

Your definition of "multi-year contract" clearly applies only to those involving agencies of the Federal Government, others do not require congressional approval!   So the 5 year max doesn't apply here either.   Do you have any reason for believing the contract was for 5 years?

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Negative just looked up multiple definitions of "multi-year agreements" via google. I was unable to find any additional information concerning the Charles Schwab and American Express agreement term length. Good point regarding Federal Government contracts! So you believe it could be for a longer-term?

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It could be longer, or shorter and already renewed, just thought your concern seemed predicated on the 5 year cap!

Presumably term length is a balancing act between the parties: you don't want to be stuck too long in something that isn't profitable for you, but if there are sufficient start up costs, you want a minimum term to give you a chance to recoup those costs.

But some platinum partnerships DO end, e.g. Mercedes-Benz, so it might be interesting to see when that started!  (Ended in 2018)

[Brian_Earl_Spilner]

I remember not too long ago, people weren't able to transfer their MRs. Wonder if that was because they were negotiating. 🤔

I hope the deal doesn't end. I was planning on getting a Platinum in the next month or so to dump these MRs I can't use for travel at the moment.

[TheFIGuy]

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@longtimelurker wrote:

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It could be longer, or shorter and already renewed, just thought your concern seemed predicated on the 5 year cap!

Presumably term length is a balancing act between the parties: you don't want to be stuck too long in something that isn't profitable for you, but if there are sufficient start up costs, you want a minimum term to give you a chance to recoup those costs.

But some platinum partnerships DO end, e.g. Mercedes-Benz, so it might be interesting to see when that started!  (Ended in 2018)

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I was using the 5-year term length because that would be the longest term length stated by the definitions I found. Exactly, the problem is how is Charles Schwab profiting from the AMEX partnership currently. I sometimes forget this forum isn't the world, and how many people actually have the CS Platinum and are cashing out their points into a Schwab account and keeping them there, etc.

But now that Schwab acquired another company that has a visa credit card infrastructure and customers I'm curious if they're re-thinking the agreement between American Express.

• ~ August 2011 - Mercedes Benz & American Express Deal "Premium credit card provider American Express has inked an affinity deal with equally upscale automaker Daimler AG, the maker of Mercedes-Benz products."
  • Source: http://www.thedetroitbureau.com/2011/08/mercedes-does-deal-with-american-express/
• ~ March 2018 - American Express and Mercedes Benz cancel contract together
  • Source: https://thepointsguy.com/2018/03/american-express-to-discontinue-mercedes-benz-platinum-card/

So the Mercedes-Benz and American Express deal lasted about ~7 years.

[wasCB14]

I've not investigated your concerns, but if the agreement were to end...I'd just get a regular Platinum.

I got tired of all the tax forms and basis updates from moving shares around to chase brokerage promotions. But if I do resume bonus chasing, a good bous is worth a lot more than the annual CS Plat loyalty credit.

Given that I have a lot of miles and little upcoming travel...I would be tempted to cash out some MRs before the agreement ended. But I'll keep them as flexible MRs for now and intend to use them for travel.

I'm already set up with a 2.625% Premium Rewards and a 5.25% WWFCR. I might get a plain or MLB BofA CR, too. So cash back is a ready alternative for me.

[TheFIGuy]

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@wasCB14 wrote:

I've not investigated your concerns, but if the agreement were to end...I'd just get a regular Platinum.

I got tired of all the tax forms and basis updates from moving shares around to chase brokerage promotions. But if I do resume bonus chasing, a good bous is worth a lot more than the annual CS Plat loyalty credit.

Given that I have a lot of miles and little upcoming travel...I would be tempted to cash out some MRs before the agreement ended. But I'll keep them as flexible MRs for now and intend to use them for travel.

I'm already set up with a 2.625% Premium Rewards and a 5.25% WWFCR. I might get a plain or MLB BofA CR, too. So cash back is a ready alternative for me.

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Nice! I'm not deeply rooted in the BofA family but those are good redemption values! Thank you for the input!

[kdm31091]

It's anyone's guess how long the contract truly was for. Cobranded cards do occasionally change hands (or the partnership ends). The Schwab cashout may have become too popular in reward communities when obviously Amex would prefer you redeem for lower value rewards. But that doesn't mean the contract is or will be ending soon. 

[TheFIGuy]

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@Brian_Earl_Spilner wrote:

I remember not too long ago, people weren't able to transfer their MRs. Wonder if that was because they were negotiating. 🤔

I hope the deal doesn't end. I was planning on getting a Platinum in the next month or so to dump these MRs I can't use for travel at the moment.

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I love Schwab and AMEX, and the 1.25% cashout rate is steller, so I too hope it doesn't end anytime soon! Hopefully, it's like the AMEX and Costco agreement that went on for 15+ years!