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In order to maximize your points and miles, you have to be able to use them. TPG Senior Points and Miles Correspondent Jason Steele recently learned the hard way that American Express sometimes makes it more difficult than it should be to access the points you’ve earned. Here’s his take.
Early this spring, I signed up for the Amex EveryDay Preferred Card to take advantage of its bonus categories. The card earns 3 points per dollar at US supermarkets, 2 points per dollar on gas and 1 point on everything else, but you earn a 50% bonus on all points when you make 30 transactions in a statement period, increasing those earning rates to 4.5, 3 and 1.5 points per dollar, respectively. As I looked forward to banking a good amount of Membership Rewards points, my only concern was how quickly I would wear out the card’s magnetic stripe.
Yet as summer approached, I hadn’t been seeing the windfall of points that I had expected. As I investigated the problem, I learned something about the way American Express awards points. In this post, I’ll explain precisely how Membership Rewards points are earned, and why you shouldn’t be surprised if they don’t show up in your account right away.
How Most Credit Cards Work
With most credit card issuers (apart from Amex), you typically receive all the points you earned during the last billing period within 24-48 hours of when your statement closes. If you meet the minimum spending requirements to earn a sign-up bonus during that billing period, those points will appear at the same time. If a purchase you made is still listed as “pending” when your statement closes, then you simply receive those points the next month when the transaction has fully cleared. It’s pretty straightforward.
How American Express Cards Work
While my sign-up bonus arrived quickly, it took over two more months to receive my points earned from spending. Here’s why:
When your Amex statement closes, you do not immediately receive all of your points. Instead, your points are listed as “pending,” or at least some of them are. In the case of the Amex EveryDay and EveryDay Preferred cards, only the “base” points earned are listed as pending, which includes category spending bonuses, but excludes any bonus for meeting the transaction threshold in a statement period (i.e., the 50% bonus for 30 puchases on Everyday Preferred, and the 20% bonus for 20 purchases on the no-fee Amex EveryDay card).
You must then wait another month until your next statement closes for the points to show up in your account. At that time, you’ll receive any bonus you qualified for based on the number of purchases you made, but you’ll still have to wait to finally receive the base points. In an online chat with a customer service representative from American Express, I was told to wait another 7-10 days beyond when the statement cycle closed after the month in which I earned my points. Thankfully, my base points posted only two days after the points from the 50% bonus.
Earning Your Sign-Up Bonus
To make matters more complicated, your sign-up bonus is awarded according to a completely different formula, but thankfully the process is simpler and doesn’t take as long. Once you’ve met your minimum purchase requirement and the necessary charges are no longer listed as pending, you will receive your sign-up bonus. Unlike with other credit card issuers that I’m aware of, you don’t even have to wait for your statement to close!
An Example of How You Will Receive Your Points
Let’s say you apply for your own Amex EveryDay Preferred card today and are approved in early July, with your first statement period scheduled to close on August 1. If you meet the minimum spending requirement of $1,000 to earn the 15,000 bonus points on July 5, you will receive those points shortly after the necessary transactions post to your account.
Suppose you’ve earned 2,000 points while making more than 30 purchases when your statement closes on August 1. The following day, you’ll see the 2,000 points listed as “pending” on the American Express site, but you’ll receive nothing beyond the sign-up bonus you already earned.
When your next statement closes on or about September 1, you should receive 1,000 points from your 50% transaction bonus (for July) within a day or two. You’ll also see whatever new base points you earned in August listed as “pending,” but not your August transaction bonus. A few days later, you should expect to finally receive the 2,000 base points that you earned in July. By this time in early September, it may be as many as 65 days since you made the purchases that earned you those points.
If it seems complicated, that’s because it is. If you’re confused, consider the following timeline (dates aren’t exact, and are just estimates used for illustration):
- July 5 — Spend $1,000 to meet minimum spending requirement for sign-up bonus.
- July 7 — Sign-up bonus of 15,000 points is available in your Membership Rewards account.
- July 8-31 — Spend another $1,000, for a total of $2,000 in the month of July.
- August 1 — 2,000 base points show as pending in your account.
- September 1 — 1,000 bonus points are available in your account from the 50% transaction bonus for July spending. Points from August charges now show up as pending.
- September 5 — 2,000 base points are available in your account from July spending.
Why Amex Awards Points This Way
It’s fantastic that you get your sign-up bonus without delay, but the rest of the process is terribly time-consuming. Points are listed as “pending” until the close of the next statement period because (according to Amex’s terms) your points are subject to forfeit if you fail to make the minimum payment before your statement due date, or in several other instances such as returned purchases or having your account canceled by Amex. However, once your account returns to good standing, you then have the option to pay $35 to have your points reinstated. This forfeiture and reinstatement policy applies not only to cards that earn Membership Rewards points, but also to co-branded Amex products like the Starwood Preferred Guest Credit Card from American Express.
Like other card issuers, Amex will often waive late fees and even interest charges upon request, but it will not reinstate rewards earned unless you pay the $35 fee. If you find yourself in that situation, I recommend consulting TPG’s latest point valuations to decide if the fee is worth paying to reclaim your forfeited points. In the case of Membership Rewards (which TPG lists at 2 cents apiece), you’d need to recoup a balance of at least 1,750 points just to break even.
As for why your transaction bonus points are not listed as “pending” as well, it’s a mystery to me — and Amex reps didn’t have much to add. Furthermore, it’s unclear why your previous month’s transaction bonus is awarded soon after your statement closes, but you have to wait several more days to receive any base points you earned.
Other Nuances of Membership Rewards
Another way that Amex differs from other card issuers is that it lists point totals not just by credit card account, but also by cardholder. You can use this to see how many points were earned by each of your authorized cardholders, which are listed in the Activity Detail section according to the last five digits of their card — unlike other cards, each American Express authorized cardholder has a unique card number.
Finally, Amex will also list which of your transactions qualified for bonus points (which some other card issuers now also do), but you have to dig through a few layers of detail to discover it.
I was excited to earn up to 4.5 Membership Rewards points per dollar, but I didn’t realize how long I would need to wait before I could use them. By understanding exactly how Amex awards Membership Rewards points, you can plan accordingly, and not be too concerned when the rewards you’ve earned don’t appear as soon as you’d like.
Have you had a similar experience waiting for Membership Rewards points to show up in your account?
The Amex EveryDay® Preferred Credit Card from American Express
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|0% for 12 months||13.24%-23.24% Variable||$95||0%||Excellent Credit|