This Flyertalk thread points to an American Express Membership Rewards change that I had somehow missed — beginning September 1, the fee to transfer points from Membership Rewards to US airline frequent flyer programs will be going up.

Amex currently charges $0.0005 per point to transfer to US carriers, and caps the fee at $75. This will go up to $0.0006 or $99 beginning September 1. For a 100,000 mile transfer the fee is $50, going up to $60, a 20% increase.

They describe the fee as an ‘offset’ for the federal excise tax they pay when buying miles from US airlines. However, the fee isn’t a direct reimbursement of their actual costs, and it certainly isn’t mandated. It’s a charge they pass along to their customers. And similar programs, such as Starwood which allows transfers to more airlines than Membership Rewards, do not impose such a fee.

Fortunately, transfers to hotel programs (which aren’t at an especially favorable rate) don’t incur the fee, and more importantly transfers to non-US based mileage programs don’t incur the fee. Since the best use of Amex points is usually transfers to Air Canada (followed by All Nippon Airways) I will rarely have to pay the fee. The exception being when I transfer say 1000 points to someone else’s account to keep their mileage active, and it’s a US program, I do consider the 50 cents I have to pay to be more than worthwhile.

American Express does let you link anyone’s account you wish through their website and make transfers, even if their rules do say you can only transfer points to someone with a card on the account. This rule may be in place if you call and have a representative make the transfer but if you handle the transaction wholly online it certainly isn’t.

I do still love Membership Rewards points. Not as much as Starwood points, but they’re much more valuable than points in most airline programs. The flexibility to choose what you wish to do with them at the point you need them is huge, and transfers take place much faster than with Starwood in most cases. For instance, transfers to Air Canada, Delta, and Continental are instantaneous. I’ve seen Mexicana take a couple of days even though they say two weeks, and I’ve seen Singapore take from a couple of days to a week. Starwood can take much longer, though of course their partner list is also much larger (including for instance American, LAN where transfers are 1 Starwood point to two LAN points, and even Air New Zealand Airpoints).

The nice thing about Air Caanda Aeroplan transfers, as I’ve written in the past, is that Aeroplan has a generally more favorable award chart than United (e.g. 120,000 miles from the US to Asia in first class, compared to 145,000), they do not block availability offered by their Star Alliance partners, and their routing rules are much more generous — you can cross either ocean or both, and you can book two stopovers in addition to your destination or a stopover and an open jaw, while United only allows one stopover or an open jaw.

And ANA points can be especially useful for specific routes, because they use a distance-based chart rather than zone-based, and because they have interesting partnerships in addition to their Star Alliance membership such as Virgin Atlantic and Jet Airways. To wit, a business class roundtrip in Virgin Upper Class between New York-JFK and London-Heathrow is only 63,000 miles while United charges 55,000 miles for coach and doesn’t provide the Virgin option. (From my home airport of Dulles, a Virgin Upper Class redemption would be 68,000 miles.)

Of course, Starwood partners with both Aeroplan and with ANA, and they offer transfer bonuses when transferring points in chunks of 20,000. But we can’t all earn Starwood points all the time, the Starwood Amex notwithstanding. For example, American Express will allow me to make much larger charges on my Platinum Amex than on my Starwood Amex (despite an especially high limit even with the latter). So I will accumulate Membership Rewards.

Ultimately I won’t get too excised over American Express’ change to their excise fee pass-along, but it’s a minor annoyance in what amounts to death by a thousand cuts that is all-too-common in the loyalty industry. Amex for instance has lost partners over the years, like Marriott and Northwest, and hasn’t added partners of equal value. No, JetBlue doesn’t count.