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Update: This offer for The Business Gold Rewards Card from American Express OPEN is expired, but there’s currently an opportunity to earn 50,000 Membership Rewards® points after you spend $5,000 in purchases on the Card within your first 3 months of Card Membership. Learn more about the special offer here.
UPDATE: The offer for the Business Gold Rewards Card from American Express OPEN is expired. You can find the best current offer here.
Gary made a post yesterday saying that his credit card spending strategy hasn’t changed, despite Aeroplan’s recent introduction of fuel surcharges for travel on Lufthansa.
My strategy finally has changed. You see, I have three levels of credit cards — those in my money clip (which I always have with me and use daily), those in my wallet (which is usually in my carry-on and are rarely used), and those in my drawer at home collecting dust (which I acquired just for the sign-up bonus, typically).
Yesterday my Premier Rewards Gold Card from American Express
was downgraded from “money clip” status to “wallet” status.
So what’s still in my money clip? The Chase Sapphire Preferred® Card, Starwood Preferred Guest American Express card, and Business Gold Rewards Card from American Express OPEN (only because I’m trying to reach the minimum spend).
For now as far as I’m concerned the sky is falling when it comes to Membership Rewards points. I’m confident American Express is working on acquiring new partners, but I’d say my valuation of Membership Rewards points has been cut from about 2.2 cents per point back in June to at most 1.4 cents as of November 16. To recap, here’s what has changed:
- Aeroplan massively devalued their award chart on July 15, increasing the cost of many of my favorite redemptions by over 50%
- ANA started imposing fuel surcharges for award redemptions on Virgin Atlantic
- Aeroplan stopped allowing one to fly in domestic first class when booked on an international business class award
- Continental was removed as a transfer partner of Membership Rewards as of September 30
- British Airways is massively devaluing their award chart as of November 16
- Aeroplan (without any advance notice) has started imposing fuel surcharges for travel on Lufthansa
Add them all up and 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.
What can Membership Rewards points now be used for?
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.
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.
British Airways? Well, through November 16 there are some good values, but after that you’re hosed.
And that only leaves Delta, which is previously the one program you shouldn’t transfer Membership Rewards points to without a specific use.
Again, I’m confident they’re working on finding a new partner (I suspect Alaska or US Airways, though who knows), but in the meantime I just can’t justify putting any spend on their cards.
Don’t get me wrong, the Premier Rewards Gold card has long been one of my favorite credit cards, offering triple points on airfare, double points on gas and groceries, and one point on everything else.
But the Chase Sapphire Preferred card offers two points per dollar on all travel expenses.
The thing is, I’d much rather earn 2.0 Ultimate Rewards points than 3.0 Membership Rewards points. Those Ultimate Rewards points can be transferred to United, where you can still fly without fuel surcharges with some amazing award values. For example, 100,000 miles for business class to Europe with the option of flying Virgin Atlantic and having a stopover and open jaw is a fantastic value.
Or even better, my favorite award redemption is still traveling from the US to Asia via Europe in Star Alliance first class for only 140,000 miles (business class is 120,000 miles). That gives you four longhaul first class segments and stops in both Europe and Asia for about the same as other programs charge for first class just to Europe. It’s an absolute bargain.
A lot of people then ask me about the Starwood American Express. It’s also a great card, no doubt, and one I frequently use. But it’s no substitute for a program with instant points transfers like Membership Rewards or Ultimate Rewards. This is because it takes 1-2 weeks to transfer points from Starwood to an airline. I still love the card and use it all the time, but it’s not a program where I can find the award space, hold the ticket, transfer points, and then ticket the reservation all within an hour. Instead it’s one where I speculatively have to transfer points in hopes of the award space not disappearing, which is a big gamble. If anything it complements Membership Rewards and Ultimate Rewards, since it can be used for hotels when redeeming those points, or if you have longterm award redemption goals you can transfer the points to an airline in anticipation of making a booking.
Yesterday alone was a clear example for me as to how tough Membership Rewards points have become to use.
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 United 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.
Then I had another client wanting to book what is usually a simple award, from San Francisco to Rome in business class. As is often the case there was no availability on the nonstop Lufthansa flight from the west coast, so their only options were to fly a transcon in coach to Charlotte, and then Lufthansa from there, all while paying fuel surcharges (based on availability it was the only “reasonable” option).
And those are just two typical examples. Hell, the last five awards I’ve booked for customers using Membership Rewards points have all been in the form of transferring miles to Delta, which I previously almost never did.
My point? United miles really make just about any award redemption easy. Star Alliance is hands down the strongest alliance to Europe and Asia. To South America OneWorld is the strongest alliance, though British Airways is transfer partners with both Membership Rewards and Ultimate Rewards. Otherwise the most valuable mileage currency nowadays is American, and you can accrue those miles through the Starwood Preferred Guest American Express.
I say this not as someone trying to make a few bucks off referral commission on a credit card, but as someone that books award tickets for people 12+ hours per day and has for years told clients their Membership Rewards points are the most valuable mileage currency out there. The Chase Sapphire Preferred card will make both of our lives easier, trust me…
Keep in mind the Chase Sapphire Preferred card comes with a nice sign-up bonus, offers double miles on travel and dining, has no foreign transaction fee, and no annual fee the first year.