[Offers in this post are no longer current]

Aeroplan has started adding fuel surcharges to many partner awards, including on Lufthansa, All Nippon, Asiana, and Thai.

One of the common internet memes is that this is a real blow to American Express Membership Rewards. Because Amex points transfers was one of the key ways that folks in the U.S. were generating Aeroplan points.

Certainly the change to Aeroplan with no notice whatsoever makes their program less valuable. And it means that points that might have been transferred into Aeroplan have a bit less value, since the transfer option is worth less.

An equally big kick in the teeth to Aeroplan came in July with their massive award chart devaluation (and that wasn’t even the only recent cutback).

Of course, American Express also lost Continental as a points transfer partner on September 30th. We had a year’s notice of the change (all loyalty programs, take note!), and for the Platinum and Centurion cards Amex compensated for the loss of Continental lounge access by adding US Airways lounge access, a $200 annual airline fee credit, comped registration for Global Entry, and Priority Pass Select which covers a bunch of lounges worldwide and Alaska Airlines here in the U.S. American Airlines lounge access was a relatively recent add as well, I tend to think that the American Express Platinum card is a reasonable investment for the perks, independent of the points program, but the question here of course remains where to put your spending and not just what card to carry. So Membership Rewards is still the key driver.

At the time that transfer options to Continental were closing, I suggested it could be reasonable to transfer those points to Continental that you needed for a specific award where Continental was likely to be the best program for booking that award (eg Europe, Asia, but not South America or French Polynesia).

And I remain glad that I didn’t transfer wholesale points over to Continental. Last week there was a bit of a scare with United Mileage Plus, clearly available award seats especially on Thai Airways were being reported by United agents to be unavailable. The fear was a return to ‘Starnet blocking’ — the past practice (really, pre-May 2010) of programming Mileage Plus computers to say that seats being offered by partner airlines weren’t available, even though the partners were offering those seats as awards, because Mileage Plus didn’t want to pay for the seats. After a bit of digging, it turns out that there was an unintentional glitch, that there’s troubleshooting now going on to fix it (prompted by my inquiries), and that it’s not intentional blocking of partner award availability.

But warehousing Continental miles may not be a great idea, and even though transfer options from Membership Rewards are clearly diminished in value by losing Continental as a partner, by the increased points and cash costs of Aeroplan awards, and an expected devaluation in the British Airways award chart, the Membership Rewards program still offers meaningful value — transfers to many programs like British Airways, Aeroplan, and Delta are instantaneous; Amex runs frequent transfer bonuses such as 67% to Delta and 50% to British Airways; and their other partners do continue to offer value — Aeroplan even isn’t adding fuel surcharges to all partner airlines (so far, none on United, US Airways, Singapore for instance), and All Nippon adds fuel surcharges but for relatively shorter trips their award chart pricing can be really attractive. Even Singapore Airlines, which adds fuel surcharges to awards, has a role to play — one-way Star Alliance awards, and better availability on Singapore Airlines-operated flights, for instance.

And I do continue to trust American Express Membership Rewards. They’ve built a reputation, and maintain it, they provided a full year’s notice of changes to the Continental relationship in contrast to so many programs. I love Chase Ultimate Rewards but the value proposition there is still new enough that I’m not sure what to predict in terms of future behavior. For now, though, Chase is on the upswing and Membership Rewards, through no fault of their own, has declined a bit in relative terms.

So what does all this mean for credit cards, since I’ve seen lots of references to bailing on Membership Rewards for Chase’s Ultimate Rewards. And my answer is the same thing that it was before. Which is that a diversified approach makes sense, and here is mine:

• Starwood Preferred Guest American Express. Most generic spending. [No longer available]
  
• American Express Premier Rewards Gold. Airfare (triple points), gas and groceries (double points). [Has ew card name and earn structure]
  
• Chase Sapphire Preferred Visa. Restaurants, all travel (hotels, taxi, tolls) other than airfare, international spending for the no foreign currency conversion fees, merchants who don’t take American Express.

Starwood points are more flexible than Chase Ultimate Rewards points, the currency of my much beloved Sapphire Preferred card. Starpoints transfer to American, US Airways, Delta, tons of international airlines. It remains a great store of value, and the only real downsides are poor transfer rates to United/Continental and that transfers can take several days rather than happening instantaneously.

But not everyone takes American Express, and the Chase Sapphire Preferred gets you better transfers to United and also to other hotel programs like Hyatt (and less valuably, Marriott and Priority Club) plus transfers to British Airways and Korean. It also gets you no foreign currency transaction fees and double points on all travel and dining spend, which frankly is where most of my spend is. And it’s a beautiful card with no embossed numbers on the front and a bit of weight to it, it’s fun.

American Express Membership Rewards? I still like the flexibility. I still like the speed of transfers to many partners. I still like the transfer bonuses. And just as before, I focus the right spending on my Premier Rewards Gold card — the spending that the card bonuses, which is airfare, gas, and groceries.

And the small business version of the card currently comes with a bigger signup bonus and replaces double points on groceries with double points on advertising (GoogleAds!) and shipping. [No longer the current earn structure] So it may work better for some.

A diversified approach still makes sense today as it did before. And as ever we do not know the next move a program will make, changes without notice, flexible points remain exceedingly valuable especially when they’re with a program that you trust. So I remain happy with my three card approach. There are, of course, other cards that I have for specific purposes (such as Diners Club for its primary rental car coverage plus the fact that I like being one of the last people in North America who has one!). But these are my three primary cards (and by way of disclosure, I do receive a referral credit if you choose to use my links to apply for them).