One useful benefit of Membership Rewards branded credit cards is that it’s possible to get a points advance. Through a points advance you can borrow between 5,000 and 60,000 Membership Rewards points (depending on the type of card you have), under the condition that they’re earned back within a year. If they aren’t earned back in that period you have to pay a fee of 2.5 cents per point. While it’s not something I ever took advantage of, I know lots of people found this extremely useful, especially when they were a few thousand points short of a redemption they were looking to make.
And the offering made perfect sense to me. By allowing members to borrow points, American Express is building more loyalty and ensuring future spend on their credit cards. In the event that people don’t earn the points back, American Express gets 2.5 cents per borrowed point, which they surely make money on.
Anyway, American Express has updated the terms of their Membership Rewards program to indicate that the points advance option will only be valid through June 30, 2013.
A puzzling change for sure, especially given that this was one thing that set Membership Rewards apart from Chase Ultimate Rewards.
(Tip of the hat to Gary)