Episode 44: All About Amex (in 10 minutes)

Today we’re doing 10 minutes on the podcast All About Amex. This post is a companion piece to that audio.

The goal here is to describe the “quirks and features” (as Doug DeMuro would say) of American Express credit cards and their Membership Rewards program.

Amex may not be as straightforward to interact with as Chase but if you take time to familiarize yourself with Amex it can prove to be a very valuable relationship.

Card Limits

Amex limits the number of active cards we can have with them. The number has changed over the years, but the current limits are:

  • 4 credit
  • 10 charge

Charge cards are the green, gold, platinum and plum cards (of which there are many varieties) that need to be paid off each month and have “no pre-set spending limit.” Everything else is a credit card.

This includes personal and business cards, but does not include authorized user cards.

It’s possible to have more than these limits if the cards were opened when limits were higher.

Universal Referral

Amex has the most generous referral program in the credit card space.

See: All About Amex Referrals

  • If you have an active Amex card you can refer friends and family for Amex cards. You’ll earn a bonus for the referral if your friend is approved, and your friend can also get a welcome bonus for the card. To start the process visit:
  • You can even refer friends for Amex cards you yourself don’t have.
  • The referral bonus depends on the card you’re referring from. The welcome bonus your friend gets depends on the card they apply for. This creates some interesting opportunities since you can get a lucrative referral credit even if your friend applies for a lowly no annual fee card.
  • Referral offers can sometimes be inferior to public or affiliate offers so be sure to verify you’re referring for the best possible option.
  • Through 10/28/2020 Amex is running an amazing promotion whereby qualifying referrals will get not only the referral bonus, but will earn an additional 3 points for spend on the card they refer from for three months:
    Three For All Promo

Offers Vary

Amex is known to display different welcome offers depending on location, cookies, whether you’re on mobile or desktop, or whether you’re browsing incognito. We call this the Amex Random Number Generator.

As with referral offers, you’ll want to make sure you’re catching a welcome bonus that’s the best currently available so if you don’t see what others are reporting – keep trying until you do.

Transfer Partners

Amex Membership Rewards transfer 1:1 to a variety of airlines and hotel partners, most notably:

  • Aeroplan
  • Delta SkyMiles
  • ANA
  • Asia Miles
  • Aviaca LifeMiles
  • Singapore KrisFlyer
  • Qantas
  • British Airways Avios
  • Etihad
  • Virgin Atlantic
  • Hilton

Chase’s Ultimate Rewards program is perhaps more user-friendly with familiar US transfer partners like Southwest, United, and Hyatt. But Amex’s partners can be quite valuable both for domestic travel and international premium cabins.

Notable Redemptions

Unlike Chase Ultimate Rewards, Amex Membership Rewards can not be cashed out directly for a penny a piece.

You can use points to “Cover Your Card Charges” for 0.6 cents a piece (a very bad value). You can redeem for gift cards at 1 cent a piece (a potentially slightly better value). You can also use Memberhip Rewards to “Go Shopping” or “Pay With Points at Checkout” – which also present bad value.

A couple of better approaches to consider, if the above mentioned 1:1 transfers aren’t appealing:

  • 1.25 cents a piece “cashout” to a Schwab brokerage account when you carry the Amex Schwab Platinum card
  • 1.5 cents a piece towards airfare booked through Amex when you carry the Amex Business Platinum card (through a 35% Membership Reward point rebate)

The redemption opportunities these two premium cards offer make them perhaps the “cards to get last.” Not because they’re bad cards, but because much of their value is contingent on having a lot of Membership Rewards to redeem.

Insider Fares

Amex sometimes offers airfare that is less than what you’d find when booking direct. Mostly commonly I’ve seen these on American and Delta, and when available discounts are in the 5-10% range.

This can sweeten the 1.5 cent per point redemption with the Amex Business Platinum mentioned above.

Skirting Lifetime Churning Restrictions

Amex theoretically limits us to one welcome bonus per card lifetime. You can see this in the welcome offer T&Cs where it says you can’t get the bonus if you “have or have had” this card.

When this policy came into place a few years ago it seemed like it would be the death of churning Amex cards. But in practice it hasn’t been so bad due to:

Overall, Amex’s restrictions in this area are far easier to work with then Chase’s 5/24 policy.

Household/Spousal Transfers

Although Amex does “pool” Membership Rewards between a single person’s Personal and Business cards it does not allow spouses nor those in the same household to transfer Membership Rewards to one another.

This is a significant restriction, and an inferior policy to Chase Ultimate Rewards. In practice it necessitates that each individual have an assortment of cards that are strong at both earning and redeeming for an effective strategy.

You Can Have Multiple of the Same Card

Although you can’t generally get the welcome bonus for a single card multiple times, Amex does allow you to have two or more of the same card.

And just to be clear here: We’re not talking about authorized users or multiple physical cards associated with the same account. We’re talking about opening and maintaining additional cards each with their own number, payment schedule, and earning structure.

An example of where this can be useful is for cards with annual spending caps or other benefits.

Upgrade Offers

Amex will sometimes send targeted bonuses for upgrading a card. These typically come after having a card open for a year, and are sent via email or available in your Amex Offers are online.

A nice thing about these upgrade offers is how they lack lifetime language and unlock the ability to effectively get a bonus for getting into a card you’ve had before.

Pay Over Time Bonus

For some strange reason, Amex likes to send out 10,000 Membership Reward offers for enrolling in Pay Over Time on charge cards.

While the cards remain charge cards this unlocks the ability to cary balances on select purchases. If you get one of these offers: Take it. Because there’s no downside and Amex seems to be auto-enrolling charge cards into Pay Over Time without offering these bonuses.

Retention Offers

If you call Amex or Chat with them, they might present a Renention Offer for keeping the card open or encouraging spend.

If you accept an offer, be sure to keep the card open for 12 months after you’ve accepted the offer. Amex doesn’t take kindly to the acceptance of retention offers and subsequent cancellation of the card. In some cases they’ll claw back the offer and/or put you into a “Penalty Box” of sorts whereby you won’t be eligible for welcome offers.

Bottom Line

I know some people who have had dozens of credit cards from Chase and have maybe just one or two Amex cards. I think that’s a big missed opportunity. Hopefully this podcast and post will help people see the merit in Amex that might not be obvious from afar.

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About the author

– Written by Robert Dwyer, contributor at Milenomics. Connect with me on Twitter @RobertDwyer

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