Reader William writes:

My father has been banking American Express miles for the last 15 years. To date he has accumulated 1.3 Million AMEX miles. By the time he retires, in about two years, he thinks he will have nearly 2 Million miles. He uses his card for major purchases at his firm.



His plan is to use the miles to fly and vacation with after he retires. I am worried that keeping your miles in one place – especially that many – might mean he could also lose them all at once. For example if AMEX drops a FF partner he would like to fly or a hotel chain
he wants to stay at – he would then be out of luck.



Should he start moving them into certain programs or just leave them in AMEX? What would you do?

I have hundreds of thousands of Amex Membership Rewards points myself.

The only reason to pre-emptively move Membership Rewards points would be if you need points available immediately for last minute travel. I’ve been known to use points for SAME DAY travel that would otherwise have cost thousands. You can’t use Amex points for that because it takes a few days to make the transfer.

But as far as a worry over the value of the points disappearing, I wouldn’t.

First, I don’t see Amex being liquidated. (Then again, I didn’t see Worldcom or Enron coming, either.)

Second, even if a single transfer partner gets eliminated, there are lots of ways to claim awards that are “unpublished” by Amex. Say you want a domestic United ticket. United isn’t a partner, but ANA, USAirways, and Mexicana are partners. You can claim United flights with any of those partner miles. You can also claim United domestic flights with Delta miles, another Membership Rewards partner. You can also get United miles by transferring Amex points into Continental and then on to Amtrak and finally from Amtrak to United with no devaluation (but only up to 25,000 miles per year).

Say that Amex removes Hilton hotels as a partner. Then just transfer the Membership Rewards points into Continental and then from Continental to Hilton. That will give you more Hilton points than a direct Amex to Hilton transfer anyway. (Update 9/26/03) You can no longer transfer Continental miles to Hilton. Instead, transfer Membership Rewards points to Hawaiian Airlines to Hilton for the same effect.

There’s alot more flexibility in those points than you realize!

Besides, if the points are being saved for future travel, who’s to say which programs he’ll want to have points in yet anyway?

Finally, if you are still concerned about the points you might consider AwardGuard protection (which will pay out awards in the event that your frquent flyer programs fail). They aren’t taking new memberships at the moment, but that may (hopefully) change soon.

Some general rules of thumb, though, for Amex transfers:

• Don’t make large transfers until you’re ready to actually travel — unless you use points for last minute travel and need the points already sitting in the accounts of one or more programs. You lose flexibility.
  
• Don’t make large transfers without travel plans unless there’s a redemption bonus (Amex sometimes offers 25% and even 50% conversion bonuses)
  

• Don’t transfer to programs where the miles are hard to use without knowing exactly what you want to do with the points and knowing that you CAN make use of them. Continental is the classic example of this. I would only transfer points to Continental if I was a Platinum (75,000 mile flyer) with them or if I was planning to move the points to Amtrak – which is having its own budget problems at the moment.

Best,

Gary

Update: Reader Craig Kolthoff points out that you can earn a 15% bonus on Delta transfers through August 15th. If you want Delta miles, now is a good time. But since these type of promotions come around each year, I wouldn’t redeem a million just for the 150,000 bonus.