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TPG reader Ross sent me an email to ask about redeeming Amex Membership Rewards:
“I read that you value Amex points at about 1.9 cents each, but I can’t seem to get more than 1 cent out of them. What can I do differently?”
Each month I publish my valuations of points and miles from a variety of popular airline, hotel and credit card loyalty programs. I base these numbers on a combination of the value I expect to get out of those rewards, along with what I might be willing to pay for them given the opportunity. For the most part, my valuations represent an average, meaning you can sometimes redeem for more — and you can almost always redeem for much less, though I don’t recommend it!
Amex Membership Rewards are a great example, since the program offers so many different redemption options. You can redeem through the Membership Rewards online shopping mall at a terrible rate of just 0.5 cents per point, or you can redeem via American Express Travel at a better (but still subpar) rate of 1 cent per point. My guess is that Ross has been looking only at these options and not at more lucrative ones.
In general, the best way to use Membership Rewards is to transfer points to airline and hotel partners, and the incredible value you can get out of those awards is why I rate them so highly. This summer I transferred 62,500 points to Aeroplan in order to book a first class flight to Spain on Lufthansa, which would have cost about $12,000 if I paid cash. While you can’t expect to get that much value out of every redemption, it gives you an idea of what’s possible.
One other thing you might notice about the monthly valuations is that transferable points programs (like Amex Membership Rewards) tend to rate higher than most of their individual transfer partners. That’s because the transferability itself has value because it allows you to maximize your points by using them with the best partner for a given redemption. The more options you have, the better, which is why all award travelers should earn transferable points.
In general, I don’t recommend using points for statement credits or gift cards. While some programs offer better than one cent per point for direct travel redemptions, transfers are usually your best bet. Check out these posts for more on how to maximize rewards from the major transferable points programs:
Premier Rewards Gold Card from American Express
|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|