The Points Mom

How To Use Those Amex Points Sitting Idle In Your Account

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Learn About and Apply For American Express Cards That Earn Membership Rewards Here

 

I wish that this, my second newsletter, had a racier subject like my first, which was about “porn”. Luckily, if you missed it, you can access it here. The topic of this newsletter is much drier with lists and even worse, involves some math. Nevertheless, it was inspired by a lot of you who seem to have a common question…

Since I have debuted my site, The Points Mom, a mere 2 weeks ago, I have been inundated with emails and approached by many people that share a similar characteristic. All of these people have accumulated a “ton” of American Express Membership Rewards points (“Amex points”), yet, don’t know how to use them for free travel. Let me try to be of some assistance.

There are 2 main ways to use American Express Membership Rewards Points For Free Travel

There are two main ways in which you can use your Amex points to book free travel. The first method entails transferring your points out of your Membership Rewards account into one of your loyalty program accounts. The second method involves actually “Paying with Points” for your travel purchases that you have booked on American Express Travel, and paid for with your Amex card. Let’s look at these methods separately.

1. Transferring Your Amex Points

Currently, the Membership Rewards loyalty program transferees include:

FREQUENT FLYER PROGRAMSAeroMexico Club Premier, Air Canada Aeroplan, Air France Flying Blue, Alitalia MilleMiglia, ANA, Asia Miles, British Airways Executive Club, Delta SkyMiles, EL AL Israel Airlines, Emirates Skywards, Hawaiian Airlines HawaiianMiles, Iberia Plus, JetBlue TrueBlue, Singapore Airlines KrisFlyer, Virgin America Elevate,Virgin Atlantic Flying Club

HOTEL LOYALTY PROGRAMSChoice Privileges, Hilton HHonors, Starwood Preferred Guest

Most points transfer at a 1:1 ratio, which means one Amex point equals one partner’s mile/point. However, there are some exceptions. Most notably, the transfer rate to Starwood Preferred Guest is 3:1, meaning for every 1,000 Amex points you transfer to Starwood, you get 333 SPG points. This transfer rate is very unfavorable, and unless you are in dire need of Starwood points, I would never recommend this transfer.

Transfers can be made with no transfer fees to hotel programs. However, when you transfer points into a U.S. airline frequent flyer program, you will be charged an excise tax offset fee of $0.0006 per point (with a maximum fee of $99). American Express states that they charge this fee to offset the federal excise tax that they must pay on transfers.

2. Pay With Points

You can also “Pay With Points” for your travel as long as you a) booked the travel through the “American Express Travel” website and b) paid for the travel using an Amex card that earns Membership Rewards points. I have found that American Express Travel offers comparable rates on flights and hotels as the actual companies directly or other travel websites like Expedia.

Generally, when booking and paying with points on Amex Travel, one Membership Rewards point equals $0.01 incremental ticket value on travel. For example, 20,000 points can be redeemed for a $200 airline ticket. There are better redemption rates if you have an American Express Business Platinum, but going into detail here would get too confusing. I will save this topic for a future newsletter. Feel free to email me if you wish to discuss the redemption features of your Business Platinum.

When you use “Pay with Points”, your points will be deducted from your Membership Rewards account, and a credit for a corresponding dollar amount will be issued to the Amex card you used to pay for the travel. If your points redeemed do not cover the entire purchase amount, the balance will remain on your card. There is a minimum redemption of 5,000 points.

Is one method better than the other?

It depends and you will need to do a bit of investigating to figure it out. I always start out by going to the loyalty program’s site (like Delta) to see how many miles/points are required for a free flight or stay. I then go to American Express Travel and see if I would use less Membership Rewards if I were to “Pay with Points” for that same flight or stay. So far, in my experience, transferring usually wins.

Keep in mind that you will not earn rewards points on your travel if you transfer your Amex points to a partner and then redeem that new currency for free travel. You do not earn points or miles when you book with points or miles. In contrast, when you are “Paying with Points”, your travel counts as paid fare, so you will still earn the loyalty program’s points or miles on your travel purchase. This is another factor to take into consideration when deciding upon which method to use.

A word about value

I want to touch on one more tricky topic regardless of which method above you are using.

Another common question that I am asked is “Is it worth it to use my points”? I think a better question may be-“Is it worth it TO YOU to use your points? There is no easy answer to this question, as it is subjective based on your own personal finances and travel goals.

I know two very different types of people. Person A will only use their rewards if it makes financial sense to do so. For example, some travel bloggers value Amex points at 2 cents a piece. Person A will only use their Amex points if the value of the travel they are booking is greater than the value of the Amex points they are using.

On the other hand, Person B does not even think about value. If they use rewards to book a free trip, that is all the “value” they need to make it worth it for them. Many of these people would not be able to travel if they could not use their points and miles, so if they are losing value, so be it.

I fall somewhere in the middle. I take into account point and mile valuations when I search for award travel. If the cost of my flight or hotel stay is low, I will not use my points or miles if the discrepancy in value is too great. For example, I almost always pay for a flight under $200 because I would likely be losing too much value using miles. But, if the price tag of a ticket or a room is higher, I may opt for the redemption, even if I am losing value.

Think about where you are on this spectrum. It will help you in finally using that stash of Amex points that may be sitting idle in your account!