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Sunday Reader Question: What is the best way to unload Membership Rewards points?

by on September 23, 2012 · 28 comments

in Aeroplan, American Express, British Airways, Sunday Reader Questions

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This week TPG reader Dawn asked for advice on how she should unload her Membership Rewards points before her account is closed:

“I have been a member of Amex since 1991 and almost as long with Membership Rewards.  I am in jeopardy of losing my current balance of 685K Membership Rewards points and am trying to figure out the best way to unload them before my account is closed.  I have been saving for the “dream trip”, but do not see that happening in the near future. “

I’m not exactly sure what Dawn’s specific situation is or why she’s going to lose all her points, but I would like to remind you Amex cardholders that if you cancel your cards that earn Membership Rewards points, you will lose your points, so always transfer them to a partner program before canceling all your Membership Rewards-earning card like the Premier Rewards Gold card or the Platinum.

If you’re just looking to get out of paying an annual fee, you can always just downgrade to an Amex Everyday card. That way your points will remain.

If you have a corporate card, but are leaving your job and have give up your card, before you do, sign up for a personal Amex and link your corporate Membership Rewards account to your personal one and then even when the corporate account is closed, you maintain your points.

For the question at hand, if you have to transfer those 685,000 Membership Rewards points, I have a few points of advice.

1. Don’t transfer to hotel programs since the transfer ratios aren’t a great value. I would love to see Starwood at a 1:1 or 2:1 ratio, but unfortunately it’s 3 Amex points to 1 Starwood, and I don’t see a great opportunity there. Same for Hilton, which is 1 Amex point to 1.5 Hilton HHonors points.

2. There are a lot of airline transfer partners where you can find some good values, but I would personally split up the points and send them to British Airways Avios and Air Canada Aeroplan, so you have coverage in both Oneworld and Star Alliance for redemptions down the road. Delta is the third option I’d consider, but lately I’ve noted some recent negative changes to the program and there are rumors that it will change drastically – plus, they haven’t run any good transfer bonuses lately and at just a 1:1 ratio, I just don’t see a tremendous value.

Just picking some numbers out of my hat, I would probably transfer 400,000 Amex points to British Airways because there’s currently a 40% transfer bonus until September 27, 2012, meaning I’d end up with 560,000 Avios. Plus, you can redeem those Avios on partner airlines like American, and short-haul awards start at 4,500 Avios each way since Avios is a distance-based program. I fly New York to Miami all the time and that’s just 15,000 Avios roundtrip, while tickets go for $300-$500 in coach, so you can get great value out of these points. Plus, there are no last-minute redemption fees, and there aren’t huge fuel surcharges on North America and South America fares usually (unfortunately there often are large surcharges, taxes and fees on flights to Europe) so it’s a good thing to have some extra Avios in your back pocket.

That would leave me with 285,000 more to transfer to Air Canada’s Aeroplan mileage program, which is a Star Alliance program, and which you can redeem on all 27 carriers. They’re flexible with their routing rules and you can build in stopovers. However, they do have fuel surcharges on a lot of Star Alliance carriers including Air Canada flights, as well as Star Alliance partner Lufthansa, ANA, Adria, Asiana Airlines, Austrian Airlines, LOT Polish Airlines, TAP and THAI; and they don’t price one-way awards at half the price of roundtrips (you still have to redeem the full amount of miles).

So this isn’t a perfect solution, but between these two transfer partners, you should be covered whether you need some last-minute domestic trips, short- and mid-haul trips, as well as some great opportunities to redeem for premium international travel, so that’s what I’d do.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • BobChi

    Since you mentioned them, I’d like to know in general about which airlines impose ghastly fuel surchages on award travel. I’m familiar with British and the value of using my Avios on partner flights instead, and I believe one should not redeem Advantage miles for British Airways flights either for the same reason. I don’t participate in Aeroplan so that one is not important to me. But who else is guilty? Likewise perhaps someone could put together a list sometime of which countries to beware of connecting through because of other taxes and fees. I’m aware that one should avoid London at all costs unless London is your actual destination because of ripoff taxes and fees imposed by the government. What others should one be aware of?

  • Marianag

    How about transferring to Virgin Atlantic and then double the points to transfer to Hilton so Dawn can have some hotel points? She could transfer the 285k you suggest to Air Canada, to Virgin Atlantic and get 570k hilton points. Enough for 10 to 14 nights at great hotels.

  • PJ

    I thought I could spend to top the nearest 1000 and transfer all points out including the pending points and then cancel the membership.. Wrong I was charged for the deficit points irregardless the pending points AND AMEX is very slow in posting points ; I doubt they go with the statement cut off date.

    this is what I would do: sep 27 is the deadline is transfer into Avios with 40 % bonus . Avios beat AA by miless in many many occassions. Also aeroplan is an OK exit to travel on Star Alliance partners.

    No way i would touch hotel points that is a big give away.I spend 1000 on Citi Hhonors to collect 40K what can 40K do? for frugal travellers ( no elite status) it is a complete waste of time

  • PJ

    WE certainly all wish all miles could have been should have been much more friendly. Be adaptable is one key word.. I have been having good time with Avios and Aeroplan with my MR points .

  • Grant

    I have the Amex blue cash everyday card which earns cash back at grocery stores. I am thinking of switching that card to the Amex blue card you mention above. Do you know if this is possible? I have about $11 of cash back in that account.

  • Grant

    I actually like the transfer to SPG, regardless of the 3:1 ratio. SPG has great hotel redemption offers and you can always transfer those points to airlines in quantities of 20,000 to get an extra 5,000 miles.

    SPG seems like a great option for storing your MR points.

  • John

    I would tranfer to Singapore Airlines Krisflyer program instead of Aeroplan. Krisflyer members have special access to Singapore Airlines 1st and bus cl award seats. Also, Krisflyer charges less miles for some United flts than United does. Further Krisflyer allows one way awards and Aeroplan DOES NOT.

  • http://twitter.com/jamucsb Jamison

    Another reason Dawn might think her account might be closed soon is the dreaded AMEX Financial Review

  • John

    I’m guessing that is what is probably going on.

  • thepointsguy

    Have you thought about the SPG Amex, since you can earn 1 Starpoint per $1 spent?

  • Grant

    Yes I have both the personal and biz cards already. Thx TPG

  • http://www.facebook.com/people/Franko-Tarin/1755627301 Franko Tarin

    Personally, since she advised she was saving up for a ‘dream trip’ i would price out a RTW fare using miles. Pick an airline in whichever airline alliance meets her goals. Figure out which hotels she wants to stay in and dump the points into those chains and then go have some fun.

  • William

    What if you have two Amex cards? Can you cancel one without fear of losing the points since you would be keeping a card in the end?

  • David

    If she is looking for cash, another option is to wait for a good deal on gift cards. A 50% off deal came along with Gap gift cards, and my father and I quickly scooped up $5000 worth of them, although they were a bit of a pain in the ass to turn around and resell. But miles are still better if you don’t have enough.

  • thepointsguy

    Right- as long as you have one with Membership Rewards open, you don’t have anything to worry about

  • thepointsguy

    Yea.. in which case she should just transfer ASAP and worry about the rest later

  • thepointsguy

    Agree KrisFlyer is a good program.. I just hate how you have to call to book all partner awards and the fees are generally higher than Aeroplan in my experience

  • thepointsguy

    Not a bad idea.. I’ll add in the link to that post for those who might want to top up on hotel points http://thepointsguy.com/2012/04/25-bonus-on-american-express-to-virgin-atlantic-hilton-transfer-angle/

  • Sam_Goh

    I recently went through this after the PRG/Gold Biz 100K bonanzas last year. You CANNOT downgrade a charge product, e.g. PRG, Plat, Green to a Blue which is a credit card. Best you can do is to downgrade to a Zync ($25 annual fee). Getting a blue requires a new app/credit pull, which you can do and then cancel the charge product.

    For biz cards, there’s not even a Zync option. Green may be lowest possibility?

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  • Giovanna

    I was going to post the same thing — charge cannot downgrade into credit. When I did this, I wasn’t even offered a Zync, I was only offered a green (downgrading a PRG Personal, not business card). Thanks for letting me know, perhaps I can call back and downgrade again!

  • http://twitter.com/jamucsb Jamison

    I hope Dawn transfers all her MR to BA Avios before the generous 40% bonus expires in 2 days

  • http://twitter.com/jamucsb Jamison

    I hope Dawn transfers all her MR to BA Avios before the generous 40% bonus expires in 2 days

  • RJ

    Hi Brian,

    If I have a SPG business card, and I cancel my other amex premier gold rewards card, will I still be downgraded to membership rewards card “express” or will it remain membership rewards points?

    cheers

    RJ

  • RJ

    Correction:

    Hi Brian,

    If I have a SPG business card, “IF” I cancel my other amex premier gold rewards card, will my points still be downgraded to membership rewards card “express” or will they remain membership rewards points?

    cheers

    RJ

  • thepointsguy

    SPG business isn’t a membership rewards card, so if you closed all Membership Rewards cards you would lose those points

  • thepointsguy

    So transfer them before doing so!

  • RJ

    Thanks Bri!

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