AmEx Membership Rewards Points Are Incredibly Valuable

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A couple of weeks ago my best frenemy, The Devil’s Advocate, tried to piss on my Lufthansa parade.

Wahhhh, who wants to take a bath in an amazing jacuzzi tub (which has seen more rears than an American MD-80 seat). Wahhh, who needs rubber ducks (when you can buy them for 10 cents online). Wahhh, who needs a seat and a bed when you can just have an angled flat seat (okay, maybe he didn’t specifically say that, but he does fly his girlfriend in angled flat business class, so we can only assume). 😉

FCT-Ducks

This week he’s back with an equally nonsensical piece, entitled “AmEx Membership Rewards Points Are Totally Worthless.” When I first saw the title I had to double check to make sure that Christopher Elliott didn’t start writing for Hack My Trip.

Nene

His argument basically boils down to Membership Rewards points being worthless because:

  • They have a lot of the same transfer partners as the other major transferable points currencies
  • They have a lot of less-than-ideal transfer partners
  • The hotel transfer partners are “useless” because of the bad transfer ratios

Julian seems to be a bit confused about the main benefit of transferable points currencies. They’re not valuable because they’ll get you a cheap ride on a triple deck whisper jet to outer space. They’re valuable because of how practical they are, and a large part of that practicality comes from the fact that several of the points currencies have redundant transfer partners.

Here are what I consider to be a few of the biggest selling points of the major transferable points currencies, specifically as it relates to Membership Rewards:

Transferable points currencies are valuable for hedging against devaluations

At least Julian acknowledges this point… sort of. As I said above, transferable points currencies aren’t valuable because they get you redemptions that aren’t otherwise possible, but rather because they keep your options open.

A transferable points currency is akin to investing your money vs. storing it under your mattress. Yes, the value of transferable points currencies can fluctuate. But that’s a good thing. Sometimes they lose partners or their partner programs devalue, while other times they add more transfer partners or their partner programs open up new redemption opportunities.

In the case of Membership Rewards, I’d agree the value of Membership Rewards points fell a few years back when:

Conversely, the value of Membership Rewards points increased when:

Transferable points currencies are more valuable – not less valuable – when they have overlapping transfer partners

Julian contests:

What about international partners? AmEx has British Airways as a partner. Great. So does Chase and SPG. Who else? Virgin Atlantic. That’s good. Except so does Chase and SPG. Sensing a trend here?

Ahhhh, but wait! AmEx Membership Rewards has Singapore Airlines, and Singapore has their infamous Suites Class. That’s an excellent redemption opportunity. Clearly American Express has a “sweet” partner right there.

Except that SPG also has Singapore as a partner. And Chase just added them too. And then so did Citibank Thank You. Yeah, you heard me… Citibank Thank You points can now be transferred for the same premium Singapore Suites and at the same 1:1 transfer ratio as Membership Rewards. Aren’t these are the same Thank You points people were trading for Magic The Gathering cards just a few months ago? At this rate it’s just a matter of time before 12 stars at Starbucks gets you halfway to a business class redemption on Singapore’s fifth freedom flight between New York and Frankfurt.

Caroline

That’s a great point, and it actually makes Membership Rewards points more valuable, and not less valuable.

Most people don’t have the ability to earn millions of points per year, so being able to “pool” points from various currencies is awesome.

Yes, British Airways Executive Club partners with American Express Membership Rewards, Chase Ultimate Rewards, and Starwood Preferred Guest. Yes, Singapore KrisFlyer partners with all three plus ThankYou points.

And that’s awesome, because it means it’s easier to get enough points for a free redemptions. If you earn 50,000 points in each of the transferable points currencies, isn’t it a huge win to be able to combine all four towards a Singapore Suites Class award?

I always talk about the benefit of diversifying your points without overdiversifying. When multiple transferable points currencies have the same transfer partners, that’s a way to diversify your points currencies without overdiversifying.

Win, win, win…

Transferable points currencies are valuable for maximizing category bonuses

From the perspective of someone looking to maximize points, one of the greatest benefits of transferable points currencies is that their credit cards often come with extremely lucrative category bonuses.

Unless Julian has a post next week about how earning points is overrated and we should use credit cards with the lowest category bonuses, I’m happy earning my KrisFlyer miles at a slightly accelerated rate:

More transfer partners doesn’t make a program worse

Yes, Membership Rewards partners with El Al and Frontier and has less than stellar transfer ratios to Starwood, but that doesn’t somehow devalue the best transfer partners.

That’s like arguing that airlines devalue their mileage programs when they add more ways to redeem miles for merchandise, experiences, etc. For the most part I’d never redeem points for that, but options are options.

I’ve helped people redeem literally hundreds of millions of Membership Rewards points over the years, and all but a handful of times I’ve redeemed Membership Rewards points through the following airline transfer partners:

  • Air Canada Aeroplan
  • ANA Mileage Club
  • British Airways Executive Club
  • Delta SkyMiles
  • Singapore KrisFlyer

I’m quite content redeeming Aeroplan miles for travel to Europe in Swiss business class with no fuel surcharges and two stopovers in addition to the destination for 90,000 miles roundtrip.

Swiss-Business-Class-A330-03

I’m thrilled to redeem ANA Mileage Club miles for Lufthansa first class roundtrip between New York and Frankfurt 100,000 miles plus ~$800 in fuel surcharges (or maybe Julian would rather burn 220,000 MileagePlus miles without fuel surcharges because tickets purchased using miles should be “free”).

Lufthansa-First-Class

You can’t beat 50,000 British Airways Avios roundtrip for Aer Lingus business class between Boston and Dublin on Aer Lingus.

Aer-Lingus-Business-Class

Delta SkyMiles? As much as I complain about the program, by comparison their program has increased in value over the past couple of years.

Who cares that they’re adding 47 tiers – if you’re redeeming SkyMiles right, you shouldn’t be redeeming them for travel on Delta. I’ll gladly redeem 125,000 Delta SkyMiles for roundtrip Virgin Atlantic Upper Class between the US and Europe.

Virgin-Atlantic-Upper-Class

And Singapore KrisFlyer? Need I really say anything? Nothing I love more than a double bed in the sky!

Singapore-Suites-Class

Bottom line

In all honesty, kudos to Julian for taking the contrarian view and doing so hilariously.

It’s just a shame he’s wrong. 😉

Cynthia

About lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

More articles by lucky »

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Comments

  1. I have to agree Lucky. While its true the hotel rates suck (although SPG isn’t TERRIBLE, especially if you just need to top it off). I really appreciate having more than one source for points that I can transfer. I was recently able to book a European vacation entirely on miles (including a couple hotels, although mostly I’m AirBnB’ing) including LH F A380 on the outbound and SQ Suites on the return and I wouldn’t have been able to do that were I not able to combine my points from Chase Ultimate Rewards and AMEX. Sure the value of Membership Rewards has gone down with recent devaluations (not to mention the increasing reduction in benefits for Platinum cardholders), but its still a great mileage currency.

    Also, its not discussed, but I have found that for almost every partner AMEX is faster or at least just as fast in terms of how long the transferred miles take to post in whatever program you want to put them in. I transferred both MR points and Chase UR points to SQ for my trip at the same time and it took Chase 2 days longer to get them there.

  2. I think you are wrong and your friend right. AmEx points pretty worthless with limited exceptions which Hack pointed out.

  3. @ Mike — Out of curiosity, which points currencies do you value and for what kind of redemptions?

  4. Hold on… need to go pop another bag o’ popcorn before the next episode of Real Travel Bloggers of the World begins… ;^)

  5. The MOST valuable thing about MR is they can be turned into cold, hard CASH at 1c/mile, or 1.2c/mile if you have a business card. Plus, you will EARN more miles on the ticket you purchase with MR points because the airline considers it a ‘revenue’ ticket.

    Just purchased three tickets LAX – Hawaii for 565.00. Used 56,500 point less 20% back = 45,200 points net plus 5,110 miles to be earned = 40,090 net points to go to Hawaii.

  6. I swear, the rivalry between you and the HMT devils advocate is getting to the level of Akbar Al Bakar and Airbus, or NeNe and Shereé in season 1!

  7. Another advantage of Amex MR is that they’re able to be collected with and transferred to airlines and hotels with a no-fee card, the Amex Everyday.

  8. @David Young $565 RT for three people total? I’d like to see how you did that. Google shows me high $200s for a RT per person… I’d prefer to take 75k miles and a few dollars for 3 people RT using BA Avios

  9. Devils advocate’s posts are pretty good, but his argument today was simply flawed. He did not account for cat bonuses (which you covered Lucky) – I would rather earn 2 MR at a grocery store than earn 1 Starwood point, if my ultimate goal is to transfer to a common partner such as Aeroplan. Moreover, he compared one flex currency against others (for example, you could transfer Starwood points or TYP or UR to a common program such as krisflyer) – he should have taken a stand on which flex currency is better than others (in his opinion) and that would have been reasonable. He is going to make a series with Starwood and UR points being bashed next – all I can hope is that he does not go on to say that Starwood is worthless because you could transfer MR to Krisfkyer – that would be a wasted debate IMHO.

  10. @Lucky

    Ok now, I would like to know how you redeemed 100k ANA miles for Lufthansa F? ANA can only book tickets at least 7 days in advance… but Lufthansa mostly opens F seats to/from NYC 8 days in advance (sometimes more)… so did the travelers just turn around at FRA?

  11. Lucky, surprisingly you also left out the fact that AMEX also has lucrative transfer bonuses.

  12. @ William — I intentionally left it out, since it has been a while since we’ve seen a generous transfer bonus to one of the handful of transfer partners I find more useful. Wanted to give him as little ammo for a rebuttal as possible. 😉

  13. @ Lantean — ANA awards have to be booked four days before departure. And you can change the return date after outbound departure.

  14. It seems like he wants to ruin your world, Plucky. That´s two strikes in a row. What will be next, Rimowa cases are useless as a amenity bag?

  15. lucky,

    I absolutely agree with you. Mynhead was spinning when I read the other post. They are worthless because they have overlapping partners with other and some of the point exchange rates are not good – so what!!!

    it so easy to get a lot of those point with great sign up bonuses! I just used a ton of easily earned points to book a trip from Boston to India on Virgin Atlantic – lots of value to me!!!

  16. One of these guys is flying in business class drinking warm beer and listening to his girlfriend complain the entire flight about the angled flat seats while the other is kicking back in Lufthansa first class with a cold flute of Krug and a mouthful of warm nuts. Membership Rewards points for the win!

  17. Before we label Julian with words like “ignorant”, we should remember the premise of his series: “Sometimes the Devil’s Advocate might truly believe in the counterargument. Other times he might take the opposing position just to see if the original argument holds water. But he’s always arguing the contrarian view. That’s exactly what we’re going to do here each week. “

  18. @MikeOWave: That’s why I’ve been pretty dubious of HMT DA as a regular feature. The first few posts were great (and then he had a funny one), but I was already bracing myself because there just aren’t enough sensible contrarian viewpoints out there to do 52 a year. And most of the sensible contrarian viewpoints have already been expressed in regular blog posts anyway. (And the ones that haven’t, DA is unlikely to discover and I sure am not going to divulge! Those are trade secrets. :-D)

    Most importantly, this series of DA posts is a cringe-inducing train-wreck. The point of a valuable DA is not to make a cartoon-figure scenario, but rather to give arguments that are least halfway sensible and actually stimulate thinking, even if many people don’t believe them. When a DA advocates a position no one believes, it becomes a strawman and quite useless. (Or when he advocates a position that “low information” FFP users hold, it becomes worse than useless because it validates wrong beliefs about miles and they may not realize how unserious he’s being.)

    At this point it just feels like DA is descending to Christopher Elliott’s level and writing absurd flamebait just for the clicks.

    Writing with such hyperventilating hyperbole that Amex MR “Are Totally Worthless” helps no one. We know they’re worth a minimum of 1.25 cpm if you have Business Plat and 1 cpm if you don’t. It would have been actually helpful if he’d, you know, done some real work and quantified a value for the three transferable currencies based upon average fuel surcharges for TPAC and TATL tickets. Amex has a focus on international FFPs which tend to charge YQ, but with recent devals in US programs, it’s often either pay exorbitant miles and no YQ or with a foreign program reasonable miles with YQ. When you actually do the math, you often come out ahead or breakeven if you realize you can pay the YQ at 1.25 (MR)-1.33 (UR) (or even better do some MS on the Barclay Arrival and/or Fido 2% to cover it), compared to transferring to a US program. (SPG is the current big winner because they transfer to AA, US, and AS, the only USA ones to not have devalued yet.)

    The hilarious thing in all this? CW actually says, “Ahh!! YQ!! Never pay YQ!” which is basically the stance DA adopted. The true DA position would have been to actually do some work, crunch the numbers, do the work no one has done, and show a comparison of when paying YQ is a good idea, which is a much under-reported and non-CW stream of thought. It’s something that’s occasionally mentioned on blogs that sometimes it’s better to just pay the YQ, but no one has done the legwork (that I’m aware) to make a comparison table/spreadsheet to run the scenarios. (Drew and Carrie, I hear your name calling on this one! Great content post idea for you.)

    Please note that while I use strong language in this post, it’s not personal against the DA as the DA acknowledges that his positions are absurd. What cracks me up is the comments on HMT, the noobs are eating it up. I guess it serves as therapy to channel their frustration, even if the channeling is wildly inaccurate. It’s a frustration that familiarity with the ins and outs and routes obviates, so I’m fairly oblivious to their plights, mean old me. But kudos to DA for being a populist chest-pounder and writing a popular post. There is a special skill in that and vindicates, after a fashion, the hyperbole. It vindicates if you want to be the BuzzFeed + Donald Trump of the travel blogging world. 😛 Sorry, I keep trying to say nice, conciliatory things, but other stuff just keeps coming out. 😀 I guess I’ve just been thoroughly infected by faux cat fight spirit of these posts, I just can’t help myself.

  19. I gotta say the devil guy is wrong on this one Mr lucky. Amex miles are the best and it’s run by amex which makes it even better ( costumer service)

  20. I have really enjoyed being able to use one currency and “top off” with another…BA miles with an injection of transferred Starwood points for that wonderful Business Class to South America with Easter Island side trip a couple of years ago, for instance.

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