I like Ben, Ben is a friend of mine, but this morning he goes a bit over the top at One Mile at a Time with his declaration of the death of American Express Membership Rewards as a valuable program.
Of course, I already used the program selectively — the American Express Premier Rewards Gold card was my choice for airfare (triple points) and groceries (double points) and that’s the crux of why my credit card advice hasn’t changed.
See, unlike Ben I still value 3 Membership Rewards points from airfare more than 2 Chase Ultimate Rewards points for the same purchases. And I value 2 Membership Rewards points from groceries more than 1 Ultimate Rewards point for those. (For the uninitiated, Chase Sapphire Preferred earns double points on travel.)
I don’t think these calculations are actually even close but I certainly don’t think they weigh in the opposite direction the way that Ben does, and to such extremes — Here’s the money quote:
a Membership Rewards point is very close in value to a Delta SkyMile, because nowadays that’s just about their most valuable transfer partner. Without exception, every one of the best award values through Membership Rewards has been ruined.
He acknowledges some remaining uses for Membership Rewards points and dismisses those. I won’t be so quick to dismiss and will propose other uses as well.
Well, you can use only 63,000 Membership Rewards points to fly Upper Class from New York to London on Virgin Atlantic by transferring to ANA… but you’ll pay $800 in taxes/fuel surcharges.
And that’s still a great deal! Only some of that is fuel surcharge, remember that about $300 is airport taxes, international taxes, and the UK ‘passenger duty’ that’s extortionate on premium cabin travel.
There’s a $500 fuel surcharge that you won’t be hit with if you redeem 100,000 Continental miles, sure. But I’d save the 37,000 miles by spending $500. And further, I expect the option to redeem Continental miles on Virgin to go away next year anyway.
You can use 90,000 Aeroplan miles to fly to Europe in business class through Aeroplan, though any domestic US segments will be booked into coach and if you fly Lufthansa transatlantic you’ll pay $600+ in fuel surcharges and taxes.
Not true. Domestic segments on Continental still book up front. Aeroplan is refusing to book domestic first class seats as part of a business class award, but Continental codes their front cabin as business class for award redemption so you’re good there. And the combined United/Continental will be coding their front cabin as business. Which means you only won’t be able to include US Airways first class in an Aeroplan award (you will of course be able to include US Airways first class in a first class award).
And the fuel surcharges are annoying, to be sure, but I’ll earn 50% – 100% more points on specific categories of spend on the Amex, and eat those charges, the math just works out.
British Airways? Well, through November 16 there are some good values, but after that you’re hosed.
Yes and no, the best value awards should be getting more expensive but folks transferring to British Airways for redemption on British Airways to Europe are in some cases even better off requiring fewer points. And Amex has twice this year offered major transfer bonuses to BA (40% and 50%).
Here’s an example I very much disagree with.
I had a longtime client with tons of Membership Rewards points email me wanting to travel from Detroit to Tel Aviv in business class. In the past we transferred to Continental and usually had a nice one-stop routing on Lufthansa for 120,000 miles in business class. Now the only option is to transfer to Aeroplan and pay 135,000 miles plus about $1,000 in taxes/fees. If we want to avoid Lufthansa and the fuel surcharges associated with them, we would have to add two additional stops (based on availability for his dates) and the domestic segments would be in coach.
I’d argue that Ben’s approaching this wrong. For Detroit to Tel Aviv in business class with American Express points, it’s not “the only option” to transfer to Aeroplan and pay 135,000 miles plus fuel surcharges to get a one-stop award.
Instead, I’d offer that I would rather transfer 90,000 points to All Nippon for that very same award and pay fuel surcharges. That’s 45,000 fewer miles, And the last time I did this on ANA, total taxes and fees inclusive of fuel surcharges were $611.
Now, was Continental a better deal at 120,000 and probably $400 less cash? Even then I’d have preferred to save the 30,000 Amex points and shell out an extra $400. I still might have gone Continental because Amex points used to transfer instantly there versus taking a couple of days with ANA. But the answer there isn’t at all obvious. (By the way, and for what it’s worth, a Boston – Zurich – Tel Aviv roundtrip routing would be only 85,000 miles.)
The All Nippon award chart — which is distance-based rather than zone or route-based — isn’t uber-cheap for first class, long haul. But medium distance trips and in business class there are some real bargains.
And let’s take this simple illustration. Now, I coined the term Skypesos. But I also wrote a pretty long-ish post detailing how to get really good value out of their program.
Let’s assume Ben’s analysis is right, that transfers to Delta are the best remaining use of American Express Membership Rewards (I actually think that All Nippon – even with fuel surcharges represents a good value, to some destinations Aeroplan will as well, the British Airways with a transfer bonus can, and Singapore Airlines for one-way Star Alliance awards, also with fuel surcharges, can occasionally be non-crazy too).
About half the year there’s a transfer bonus, sometimes as high as 50%, for moving Amex points to Delta. Say I earn 3 Amex points per dollar on airfare spend via the American Express Premier Rewards Gold card. With that 50% transfer bonus I’m earning 4.5 Delta miles per dollar. That means I can literally spend double the Delta miles and come out ahead compared to Chase Sapphire Preferred for the same award ticket. But of course, if you follow my advice you should be able to avoid spending double the Delta miles on many awards.
American Express Membership Rewards have taken some hits. But they’re still a very important store of value. They still have partners in all three alliances. And they’ve demonstrated their trustworthiness over the years.
Sure, the Chase Sapphire Preferred card has increased in relative value and I am a big big fan of that card. But no need to make extreme claims about Membership Rewards, either..
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