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Upcoming Changes to American Express Pay With Points: Some Charges May Need to Be Paid Before Points Are Applied

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American Express’ Membership Rewards Pay With Points program is an easy  way to use your points for everyday purchases. With travel, you generally get 1 cent per point  when you use the points you’ve earned with your Platinum, Premier Rewards Gold, Green and EveryDay cards, and 1.25 cents per point if you have the Business Platinum. Usually, you can go to American Express Travel and use points to cover all or part of your trip.

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However, starting May 8, 2014, there will be some changes. As of that date, you need to actually pay for the trip using your Amex card and wait to get reimbursed when you redeem your points for a statement credit. And if for some reason you don’t get reimbursed in the same billing cycle, you’re on the hook to pay your bill (which you absolutely need to do in full on charge cards because the APR/fees will negate the value of any points earned), and then get a statement credit the next billing cycle. So this is something to keep in mind if you’re a Pay With Points user.

Per Amex’s new Membership Rewards rules, which I read through today with a fine tooth comb, here are the details:

Using Pay with Points to Book Travel on American Express Travel, For Products on ShopAmex through May 8, 2014, For Products Through Membershiprewards.com After May 8, 2014 and Elsewhere:

When you use Pay With Points anywhere except on Amazon.com (including at shopAmex through May 8, 2014, for products through membershiprewards.com after May 8, 2014, American Express Travel, Ticketmaster, Telecharge and elsewhere) three things will happen:

  • Your Linked Card Account will be charged for your purchase
  • American Express will deduct points from your program account
  • American Express will apply an accompanying credit to your Linked Card Account

The credit to your Linked Card Account may appear during a different billing cycle than the charge for your purchase. You are still responsible for paying the amount due on your Card statement by the due date. Any credit to your Linked Card Account in connection with these purchases can’t be converted back into points.

If the points you use don’t fully cover the entire amount of the charge, the difference will remain charged to your Linked Card Account.

If you use a Pay Over Time feature (such as the Extended Payment Option) for a purchase using Pay With Points, the statement credit you get may not be applied to that feature. Instead, it might be applied to your Pay in Full balance. If you think this has happened, please call us using the number on the back of your Card.

Point minimums

You must use a minimum amount of points for some Pay With points rewards:

  • American Express Travel: 5,000 points
  • Ticketmaster: 2,000 points
  • Telecharge: 7,000 points

A Clarification

I called American Express to clarify the complex language on the heading of this section of the terms and conditions, and confirmed that on and after May 8, 2014, when you click on the “Shopping” tab on the home page of the Membership Rewards website, you will no longer be able to see a list of purchase categories under the heading “Browse Rewards.”

At present, clicking on the Shopping tab of the home page at membershiprewards.com yields a list of shopping products; on May 8, 2014, these will no longer be available
At present, clicking on the Shopping tab of the home page at membershiprewards.com yields a list of purchase categories (shown at left); on May 8, 2014, these will no longer be available

Instead, you will only be given the following two options:

Shop with Points at Amazon.com
Shop with Points at ShopAmex.com

Amex is making this change in order provide a bigger marketplace for its Membership Rewards customers with more searchability.

My Thoughts

It still is unclear to me why American Express can’t instantly use the points to wipe off the charge like so many other credit card issuers do with their point systems. I couldn’t imagine wanting to use points to book flights for a family of four and then having to pay the charge in full using cash to avoid any interest charges and then end up getting a huge credit on my account (which you can get cut into a check, but it is still a big hassle).

American Express has done so much with technology – with a pretty robust social media platform and even an app that allows you to pay NYC taxis with your points, I don’t see why they’re taking a step back here. Hopefully this will be a rare situation, but I still think it was important to call out for all of you who use Pay With Points.

Premier Rewards Gold Card from American Express

Apply Now
  • Receive 25,000 Membership Rewards® Points after you spend $2,000 on purchases on your new Card in your first 3 months of Card Membership.
  • 3X points for flights booked directly with airlines. 2X points at US restaurants, US gas stations, and US supermarkets. 1X points on other purchases. Terms and limitations apply.
  • No matter where you're traveling, when you use your Premier Rewards Gold Card there are no foreign transaction fees from American Express.
  • $100 Airline Fee Credit. Up to $100 a year in baggage fees and more at one airline.
  • There is a $0 introductory annual fee for the first year, then $195.
  • Terms and limitations apply. See Rates & Fees
Intro APR Regular APR Annual Fee Balance Transfer Fee Credit Rating
N/A Introductory annual fee of $0 for the first year, then $195 See Terms Excellent Credit