Exploring American Express Membership Rewards

Exploring American Express Membership Rewards
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We’ve taken a look at how to earn Ultimate Rewards and opportunities to redeem Ultimate Rewards. Now it’s time to do the same with another versatile, valuable points program: Membership Rewards.

Earning Membership Rewards

American Express Membership Rewards, like Ultimate Rewards, can be earned through spending on eligible credit cards. While Ultimate Rewards offers an additional earning option by way of purchases in the Ultimate Rewards Mall, Membership Rewards may only be earned based on card spending.

Many – but not all – American Express cards earn Membership Rewards points. Cards branded for other programs, such as the Delta SkyMiles and SPG cards, obviously earn points in the programs they are named after. Some, like the Blue Cash and Blue Cash Preferred cards, earn cash back, as the names infer.

Three of the best cards for earning Membership Rewards are the:

  • American Express® Premier Gold Rewards Card
  • American Express® Business Gold Rewards Card
  • American Express® Business Platinum Card

Information about each can be found on our Sign-Up Links Page.

American Express offers an additional point per dollar on any travel purchased through their own travel booking service, but otherwise points are earned based on each eligible card’s category bonus.

Personal Premier Gold Rewards Card

The Personal Premier Gold Rewards card earns a bonus of 25,000 points after the first $2,000 in purchases. On regular spending, the card earns 3 points per $1 on airline purchases, 2 points per $1 at gas stations and supermarkets and 1 point per $1 elsewhere. The $175 annual fee is waived for the first year.

Business Gold Rewards Card

The Business Gold Rewards card earns a bonus of 50,000 points after $5,000 in purchases. On regular spending, the card earns 3 points per $1 on airline purchases, 2 points per $1 on advertising, computers, shipping and gas and 1 point per $1 on all other purchases. The $175 annual fee is waived for the first year.

Business Platinum Card

The Business Platinum Card earns a bonus of 25,000 points after $5,000. The card comes with a $200 airline fee credit, free access to many airline lounges and a number of other benefits to help offset its sky-high $450 annual fee. Unfortunately, this card is not a great choice for points earning, at just one point per dollar for all purchases with no incentivized spending categories.

Ineffectively Redeeming Membership Rewards

Myriad options exist for redeeming Membership Rewards, but some are very, very clearly worse than others. For example, Membership Rewards can be redeemed for Amazon.com purchases, but only at a value of 0.7 cents per point, which is a very poor value.

Points may be used at a value of ~0.75 cents per point toward hotel stays using the Pay With Points feature, but this is also a poor value.

Pay With Points redemptions for flights are somewhat better, finally hitting 1¢ per point in value.

Paying with points for airfare can be a fair decision if a cheap cash fare is available that would make an airline miles redemption unpalatable, making this the least bad of the options mentioned here.

Gift Cards are another redemption option, but the values are all over the place. Some, like Groupon, come in at 1¢ per point. Some, like the American Express® Shop Small® Gift Card, come in at an obscenely low 0.5¢ per point. Statement credits are available for roughly 0.6¢ per point.

The worst option by far, in my opinion, is to redeem for home goods, electronics or other products available for purchase using points. It may be possible to argue value of 1¢ per point as compared to MSRP on some items, but most in my research are discounted enough at retail that the real value comes nowhere close.

These knives, for example, come in at over 58,000 points. They price out at $329.95 on Amazon, but that’s still a devastatingly low redemption value. It hurts my heart to think someone may have redeemed so many precious points for an item like this when the real prize lay just around the corner:

Effectively Redeeming Membership Rewards

Far and away, the most effective way to redeem Membership Rewards is by transferring them to airline and hotel partners. These transfers can help you unlock much more value than the 1¢ per point possible using Pay With Points for flights, which in turn is a better option than any other non-transfer redemption.

Let’s dive in and take a look at the transfer possibilities:

Airline Transfers

Membership Rewards features 16 different airline transfer partners.

At first blush, this list may seem unappealing to domestic travelers, but it’s critical to take airline alliances into account.

Cathay Pacific – the proprietor of Asia Miles – is part of OneWorld, for example. Iberia and British Airways both use Avios, but care of BA’s affiliation with OneWorld, redemptions on American are possible. Air Canada, Singapore Airlines and ANA are all part of Star Alliance, which means redemptions on US Air and United (among many others) are possible. Alitalia and Air France are part of SkyTeam, along with Delta.

Several airlines, like Virgin Atlantic, Virgin America and JetBlue help round out the options. In terms of major carriers, the only one that sticks out as incompatible with Membership Rewards is Southwest/AirTran.

We’re not going to go into the specifics of each and every transfer partner, but here are a few key tips:

Not All Mileage Redemptions Are 1 to 1

Travelers familiar with Ultimate Rewards should take note of this when exploring Membership Rewards possibilities: while some transfers are indeed offered at a 1:1 ratio, many are not. JetBlue, El Al and Virgin America are all examples of this. Take note when considering a transfer! Membership Rewards offers helpful conversion calculators on the details page for each transfer partner where this is the case.

Not All Transfers Are Instant

Some transfers do indeed take place within just a few minutes, but in other cases, it may take a few days for miles to be deposited in your account. Keep this in mind when booking and don’t freak out if the miles don’t show up immediately!

All Partners Are Not Equal

Just because carriers are part of an alliance does not mean the number of miles required for any given trip will be the same for all partners. For example, Air Canada offers short-haul and long-haul redemption options for domestic flights, allowing you to save miles as compared to Singapore Air, which charges a uniform amount of miles for any domestic flight.

However, Singapore charges less miles than Air Canada for almost any other itinerary, including flights to Europe and Asia from the US. Singapore also offers the most affordable Hawaii redemption option out of the available Star Alliance partners.

Distance-Based Programs

While most airline mileage charts demand a flat rate for travel within a given region, some programs calculate mileage costs based on distance flown. This can create valuable redemption opportunities on expensive flights over short distances.

For example, many flights within South America, to the Caribbean, from the Northeastern United States to Canada and in between Hawaiian islands can present outstanding value. This is true of British Airways and Iberia Avios, both of which determine the required number of miles based on distance thresholds.

Unfortunately, the program charges each segment of a trip separately. That means if you were to fly from, say, Jacksonville to Freeport, Bahamas on American, you would need to book two flights – one from Jacksonville to Miami and one from Miami to Freeport. As such, it may make sense to purchase a cheap cash fare to a hub for a Oneworld partner – such as American – and then use Avios.

This is not true of ANA‘s distance-based chart, which bases its miles requirement on the total number of miles flown on the trip, regardless of segments. If you’d like to hop around Europe, for example, ANA’s chart can offer great value for this reason, empowering you to fly between many relatively close locations while burning relatively few miles.

Use Airline Partners to Avoid Limitations

With a little patience and know-how, it’s possible to play allied programs against themselves for greater travel value. Using Avios on American or Aer Lingus is a good example of this.

While very useful on short-haul flights because of the flight distance advantage mentioned above, this is also a way to avoid the extraordinarily high fuel surcharges British Airways charges when booking award redemptions on its own flights. Flying Aer Lingus or American transatlantic instead of British Airways can save hundreds of dollars per passenger while using the same miles.

Another is using Air France‘s Flying Blue program for redemptions on Delta rather than depositing miles into Delta directly. Delta doesn’t allow for one-way trips, requiring awards to be booked as roundtrip flights. When traveling to multiple destinations on a trip, this can present an issue. Air France, however, allows for one-way bookings on Delta using its Flying Blue mileage program, potentially saving serious miles for travelers near Delta hubs in need of a multi-stop itinerary.

In A Pinch, Consider Hawaiian

There will probably be a better redemption option available for most flights, but Hawaiian Airlines‘ program has a secret weapon: the airline is partners with many major carriers and not an exclusive member of any one alliance. Hawaiian’s partners include ANA, American, Delta, JetBlue, Korean, Virgin America, Virgin Atlantic and Virgin Australia. Redemption options tend to be limited to certain geographic regions and must be operated by the carrier you’re using a partnership award with (ie.- Hawaiian redemptions for American must be on American-operated flights, not on American partners like British Airways).

Hotel Transfers

Membership Rewards features 4 different hotel transfer partners.

Hilton‘s program has been so badly devalued that it’s hard for me to imagine using Membership Rewards toward a stay with them. It’s possible to transfer points to Hilton and then transfer them onward to a variety of airlines, but the transfer ratio is extremely punishing. Using points with Hilton only makes sense to me for low-category properties that are featuring a particularly expensive cash rate for whatever reason or for the most exclusive Hilton options. Otherwise, it’s a program to avoid these days.

Best Western and Choice Privileges may offer fair redemption options for budget travelers. This is a definitely a Your-Mileage-May-Vary situation, though, as my checks for award nights with both programs yielded several fair redemption options and several that were quite poor when compared with the cash rate.

SPG‘s program is, itself, quite compelling, and something we’ll explore in greater detail in the future. However, the 3:1 Membership Points to SPG Points transfer ratio is so poor as to make this a bad option for most travelers.

Promotional Transfer Bonuses

All of the above applies to the normal transfer rules and ratios offered by Membership Rewards, but on a fairly regular basis, the program has been known to offer handsome incentives to transfer points to a particular partner program. Bonuses as high as 50% for Aeroplan, British Airways, Delta, El Al, Flying Blue, Iberia, JetBlue, SPG, Virgin American and Virgin Atlantic have come and gone over the past few years. The most recent bonus was this past June, offering 20% more HawaiianMiles on applicable transfers.

Transfer bonuses of 30-50%, especially to programs like British Airways’ Avios, can offer an extremely compelling case for many travelers. Let’s consider an Avios flight from Boston to Dublin on Aer Lingus as an example. This already offers a stunning value at just 25,000 Avios roundtrip thanks to Boston being just under 3,000 miles from Dublin and therefore falling into a favorable Avios distance category.

At a 50% transfer bonus, this flight would take less than 17,000 Membership Rewards points, which is almost impossible to believe. This makes Business and First Class a more affordable proposition for travelers that prefer to use their points as economically as possible, too.

Personally, I’m holding onto my stockpile of Membership Rewards in anticipation of a sizable transfer bonus, as it’s been quite some time now since American Express has offered one, and history would suggest we’re due for a big one soon.

Hopefully this guide has helped bring you up to speed on Membership Rewards! Please leave any questions in the comments below, and we’ll keep the discussion going!

1 Comment
  1. Donnie Law

    I’ve never thought about the Hawaiian Airline transfer angle. Good stuff!

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Casey Ayers is a consultant and entrepreneur with a passion for travel. After amassing enough miles and points to travel anywhere in the world for almost free in less than six months, he developed PointsAway as a way to help others make travel dreams big and small come true.
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