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Update: The offer mentioned below for the Starwood Preferred Guest Business Credit Card from American Express has expired. View the current offer here.
I’ve often talked about American Express’s OPEN Savings program for business cardholders in the past as one of the great reasons to think about getting a business credit card.
OPEN Savings in particular could be a particularly good value because of automatic discounts at certain vendors like 5% off Hyatt and up to 10% off at Office Max as well as 90 days of purchase protection and extended warranties. by charging certain expenses to a card that was part of the program, such as the Business Starwood or the Business Platinum card.However, lately Amex has been very cagey about discussing the benefits of the OPEN Savings program, and now it’s become clear why. There has been a major covert overhaul of the program where you can earn up to either a 10% discount or 4 bonus Membership Rewards points per dollar (although sometimes lower in the 3% discount and 2 bonus points region) automatically at certain merchants.The conditions vary per merchant, but here’s a cross-section.
FedEx Office: Automatically get a 3% discount credited to your American Express statement or get 1 additional Membership Reward point on every dollar spent up to $250, 5% or 2 additional points on every dollar spent above $250 and up to $1,000 and 10% or 4 additional points on every dollar spent above $1,000 and up to $100,000, per calendar year, per card account.
Hertz: OPEN cardholders automatically get discounts credited to their American Express statement of 5% or 2 additional Membership Rewards points on every dollar spent over $500 and up to $2,500, and 10% or 4 additional points on every dollar spent over $2,500 per calendar year per Card Account. No benefit on spend of $500 and below.
Hyatt: When you use your American Express OPEN card at participating Hyatt hotels and resorts in the U.S., you automatically get a 5% discount credited to your American Express statement or 2 additional Membership Rewards points for each eligible dollar spent up to $10,000 per card account per calendar year.
Office Max: Eligible purchases at OfficeMax.com automatically get a 5% discount credited to your American Express statement or 2 additional Membership Rewards points on every dollar spent of $250 or less and 10% or 4 additional points on every dollar spent more than $250. Though it’s only for online purchases, this seems like Amex’s bid to compete with the 5x category spending bonuses on Chase cards like the Ink Bold and Ink Plus.
You can choose either the 1–4 bonus Membership Rewards points or the 3-10% discounts by logging into your Amex account and selecting the option within your OPEN card account. Some OPEN cards are not eligible for bonus Membership Rewards points, so those will just earn a discount.So how do you determine which benefit to choose? As always, you have to do the math based on your expenses.
Let’s take two examples.
If you are using your OPEN card simply for business expenses and you use it mostly for office expenses that you can predict and buy online at OfficeMax.com, let’s say you spent $1,000 per statement so that you’re well above the $250 threshold. With the discount option, you’d get $100 back in statement credits. If you chose bonus points, you’d be earning 5,000 Membership Rewards points. I value those at about 1.8-2 cents each, so you’d be getting about $90-100 in value. In this case, you’re pretty much breaking even on your options. However, if you’re looking to get a little bit taken off your cash flow, the discount is the way to go, while if you’re going to use those Membership Rewards points for some super-premium redemptions where you know you’ll be able to get more than 2 cents in value from them – perhaps by taking advantage of transfer bonuses – that could be the way to go for you.
I like the Hyatt example, because it’s always a good question of whether to use an Amex with OPEN Savings card or the Chase Hyatt Visa on hotel stays, and often the OPEN card wins out because of the superior value you get from a discount instead of earning 3 Hyatt Gold Passport points per dollar. So let’s say you spend about $500 per month staying at Hyatts for the year. That’s $6,000 total. With the OPEN Savings 5% discount, you’d get $300 back in the form of statement credits, while with the OPEN Savings bonus, you’d be getting 3 Membership Rewards points per dollar for a total of 18,000. At 1.8-2 cents each, that would be worth about $324-$360. In this case, I might consider taking the points instead of the discount because I personally know I can reap that value from Membership Rewards points by transferring them to airline partners like British Airways, Singapore Airlines or Delta and using them on on premium redemptions like using those British Airways Avios for Cathay Pacific first or business class, or Delta miles to fly Korean Air.
That said, $300 in statement credits might be more in line with your earnings strategy and is a notch above the 1-2% cashback many cards offer.As with all points-related decisions, before you put your strategy in place, think about where you’re going to be spending your money, what your spending numbers are going to be and then calculate out both the discount you will get versus the value you could get out of the points you’d earn instead and make your decision based on the cold, hard facts.