The ultimate guide to Amex Pay With Points

Feb 17, 2020

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Editor’s note: This post has been updated with the latest program information. It was originally published on Nov. 21, 2018.

Generally speaking, you’ll get the most value out of your hard-earned Amex Membership Rewards points by transferring them to a partner airline to book premium-cabin award flights. Some sweet spots, like using Virgin Atlantic’s program to book ANA first-class awards, can even help put you in a $16,000 seat for a reasonable amount of points.

This strategy requires two things: First of all, you have to study your different transfer options and pick the best one for your trip. Second, and most importantly, you have to actually find award space on the dates you’re looking to fly.

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However, there is another option for redeeming your Membership Rewards points that gives you an even greater amount of flexibility. Under the right circumstances and with the right cards in your wallet, it’s possible to get a better value by using the Amex Pay With Points feature than than you’d get by transferring your points. Today we’ll take a deep dive into this redemption option, including which cards offer it and when to use it.

In This Post

Which Cards Offer a Pay With Points Bonus?

If you have any Membership Rewards-earning card, you can redeem your points at a fixed rate of 0.6 cents each to wipe charges off your statement. TPG values Membership Rewards points at 2 cents each, so you’d be sacrificing a lot of value if you go this route, and this is generally one of the worst possible ways to redeem your Membership Rewards points.

Booking through Amex Travel gets you a slightly better value, as your points will be worth 1 cent each toward the cost of airfare or 0.7-0.85 cents each for hotels, car rentals, cruises and more. If your goal is a truly free vacation, using points for car rentals or cruises can help keep your out-of-pocket costs down, but this is still far from an ideal redemption option.

There are, however, three Amex charge cards for small businesses that offer an attractive rebate when you pay with points (terms apply). Here are their current bonus offers and other details:

Details Business Centurion Business Platinum Business Gold
Pay With Points rebate 50% 35% 25%
Value of each redeemed point 2 cents 1.54 cents 1.33 cents
Eligible flights All flights First- and business-class flights, and economy flights on your selected airline First- and business-class flights, and economy flights on your selected airline
Maximum number of bonus points N/A 500,000 per calendar year 250,000 per calendar year

This is a great way to lock in a minimum redemption value of more than 1 cent per point.

However, just bear in mind that this is a rebate on your redemption, so with all of these cards you must have the full amount of points in your account at the time of booking. The points rebate will post to your account within six to 10 weeks.

When Should You Use Pay With Points?

There are a few different reasons why you might want to use the Pay With Points option. First of all, if you find a cheap fare sale, paying with points might actually be cheaper than transferring your miles to a partner airline and booking at a fixed rate.

For example, take a look at an $83 one-way United economy flight between Chicago-O’Hare (ORD) and Houston (IAH). Note that basic economy tickets are actually a full $40 lower, but since awards still book into “regular” economy, we’re going to compare apples to apples here. If you wanted to book this flight through Avianca LifeMiles, a Star Alliance airline and popular Amex Membership Rewards transfer partner, it would cost you 10,000 miles (worth $170 based on TPG’s latest valuations) plus $5.60 in taxes.

Meanwhile, the Amex Travel portal shows the $83.40 fare available for booking. Even if you didn’t have a Pay With Points bonus, redeeming 8,340 points at one cent each would still be a better option than transferring to Avianca, but you could potentially do even better.

Here’s how much you’d pay after the rebate with each of the Amex business cards we’ve discussed:

  • Business Centurion: 4,170 Membership Rewards points
  • Business Platinum: 5,421 Membership Rewards points
  • Business Gold: 6,255 Membership Rewards points

Not only do you end up spending fewer points, but you end up saving anywhere from about $25-75 in value by using Pay With Points. And it gets even more lucrative.

When you pay with your points through Amex Travel, you’re essentially “paying” Amex for the flight, which then turns around and books a revenue ticket for you. This means that (unlike with a standard award ticket), flights booked with Pay With Points will earn redeemable miles, elite-qualifying miles and qualifying dollars. This can help you lock in your elite status for next year.

Take the example of this round-trip Japan Airlines flight from New York (JFK) to Bangkok (BKK). This flight qualifies for the American Express international airline program rebate, giving you a significant savings off the cash price:

 

 

It would cost the following amount of points after the rebate:

  • Business Centurion: 132,482 Membership Rewards points
  • Business Platinum: 172,227 Membership Rewards points
  • Business Gold: 198,723 Membership Rewards points

It’s important to note that these prices are pretty much in line with what you would pay by transferring your Membership Rewards points to an airline partner, and you’ll earn redeemable and elite qualifying miles on this trip. American Express doesn’t always make it easy to see the fare class of your ticket, but if you pull up the same ticket through the AA website you can see what you would earn on it:

If you credit a JAL business class ticket to your American Airlines AAdvantage account you’ll earn 125% of the distance flown in terms of redeemable miles, giving you a grand total of 14,340 on this route. You’d also earn over 38,000 elite qualifying miles and $2,868 elite qualifying dollars, putting you just a hair below qualifying for AA Gold status off of a single trip. You really get the best of both worlds here: all the “free-ness” of an award flight and the mileage earning of a revenue flight.

American Airlines flyers have two extra reasons to seriously consider paying with points. The first is AA’s special fares award chart, a poorly-kept secret that lets you earn based on distance instead of cost for certain tickets booked through third parties. While AA made some changes to special fares in Nov. 2018, you should still check out this guide to see if special fares can help you with your quest for elite status. You should also check the fare rules of your flight to make sure your ticket will actually code as a special fare before you book.

The second is American Airlines’ Business Extra program, a secondary loyalty program that lets businesses earn points on top of their normal AAdvantage earnings. Points can be redeemed for free flights or upgrade certificates, making for a pretty sweet stacking opportunity. Unfortunately only AA flights and select partner flights booked through AA are eligible to earn Business Extra points, but if you find a cheap AA fare on a long haul flight you can potentially triple drip, using your Membership Rewards to pay for the ticket, earning elite qualifying miles, redeemable miles and business extra points.

Related reading: Guide to earning and burning with American Airlines’ Business Extra program

Bottom Line

Flexibility is one key to getting good value when redeeming your points, and Amex’s various Pay With Points bonuses should be another tool in your redemption arsenal. This is not the way to score overpriced first-class seats, but with some of the absurd fare sales we’ve seen especially to consistently cheap destinations, paying with points can often be cheaper than transferring to a travel partner.

When you add in the miles (both elite and redeemable) that you earn on the flight, this option becomes very compelling in certain circumstances.

Featured photo by The Points Guy.

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Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

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