American Express have announced a series of changes to the earn and burn of points across a range of product. The changes are coming into effect on April 15, 2019.
The changes are fairly much across the boards – touching most of the cards in issue. There are a few exceptions – with the David Jones card staying as is for the moment.
There are no changes to annual fees, or any other features of the card. These changes only affect the earn and burn rates of the membership rewards program.
In this article I will look at the cards that earn points into one of the various Membership Rewards flavours. While the direct earn Qantas and Velocity cards are seeing a range of earn rate reductions, these are covered in a separate article.
Some background
According to American Express, the cuts stem from a reduction in the fees charged to businesses for processing AMEX payments. This has allowed AMEX to increase the number of merchants that accept American Express.
One of the aims of the changes was a simplification of the programs. This affects things on both the points earning side, as well as the burn side.
The biggest changes generally will be found in the transfer rates to partner programs. In some cases this will see the transfer rate halved from what it currently is. , and the biggest losses are in the transfer rates to partner programs. In some cases, this sees the transfer rate halved.
One of the main aims of the changes is to align the proposition more closely across the cards. That is, the varied transfer rates, depending on card, will be reduced. As an example, for most airline programs, the transfer rate will now be 2 Membership Rewards Points to 1 Airline Point.
The changes affect most of the cards on issue. Affected cards include:
- Flexible Membership Rewards cards
- Platinum Card
- Platinum Edge Credit Card
- American Express Explorer Card
- American Express Essentials Card
While the changes have been announced now, they are not coming into effect until April 16, 2019. As a result, there is a bit of time to consider options.
Let’s take a look at each of the cards to see how changes affect things.
Explorer Card
The Explorer Card earns points in the Membership Rewards Gateway program.
The basic earn rate is staying at 2 Points per Dollar, while government spend gets a boost from 0.5 points per dollar to a full point per dollar.
Some changes in redemption and transfer rates are shown in the following table.
| Partner | Current Rate (until April 15) | New Rate (from April 15, 2019) | Change % |
|---|---|---|---|
| Velocity | 4 MR Points : 3 Velocity Points | 2 MR Points : 1 Velocity Points | -33% |
| Krisflyer | 4 MR Points : 3 KrisFlyer Points | 2 MR Points : 1 KrisFlyer Miles | -33% |
| Skyward | 4 MR Points : 3 Skyward Miles | 2 MR Points : 1 Skyward Miles | -33% |
| Malaysia Enrich | 4 MR Points : 3 Enrich Miles | 2 MR Points : 1 Enrich Mile | -33% |
| Asia Miles | 4 MR Points : 3 Asia Miles | 2 MR Points: 1 Asia Mile | -33% |
| ANZ Airpoints | 400 MR Points : 3 Airpoint Dollars | 200 MR Points : 1 Airpoint Dollar | -33% |
| Hilton | 1 MR Point : 1 Hilton Point | 2 MR Point : 1 Hilton Point | -50% |
| Marriott | 3 MR Points : 2 Marriott Points | 3 MR Point : 2 Hilton Point | No Change |
| Amex Travel | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Hello World | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Webjet | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Select +Pay with Points | 1,000 MR points = $7.41 credit | 1,000 MR points = $5.00 credit | -32.5% |
| $50 Gift Card | 6,750 MR Points | 10,000 MR Points | -48% |
| $100 Gift Card | 13,500 MR Points | 20,000 MR Points | -48% |
Essentials Card
The card earns points in the Membership Rewards Gateway program.
The Essentials card sees an across the board increase in earning. Government spend will be moving up to 1 point per dollar, while everything else will move to 2 points per dollar.
| Partner | Current Rate (until April 15) | New Rate (from April 15, 2019) | Change % |
|---|---|---|---|
| Velocity | 4 MR Points : 3 Velocity Points | 2 MR Points : 1 Velocity Points | -33% |
| Krisflyer | 4 MR Points : 3 KrisFlyer Points | 2 MR Points : 1 KrisFlyer Miles | -33% |
| Skyward | 4 MR Points : 3 Skyward Miles | 2 MR Points : 1 Skyward Miles | -33% |
| Malaysia Enrich | 4 MR Points : 3 Enrich Miles | 2 MR Points : 1 Enrich Mile | -33% |
| Asia Miles | 4 MR Points : 3 Asia Miles | 2 MR Points: 1 Asia Mile | -33% |
| ANZ Airpoints | 400 MR Points : 3 Airpoint Dollars | 200 MR Points : 1 Airpoint Dollar | -33% |
| Hilton | 1 MR Point : 1 Hilton Point | 2 MR Point : 1 Hilton Point | -50% |
| Marriott | 3 MR Points : 2 Marriott Points | 3 MR Point : 2 Marriott Point | No Change |
| Amex Travel | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Hello World | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Webjet | 13,500 MR points = $100 | 13,500 MR points = $67.50 | -33.5% |
| Select +Pay with Points | 1,000 MR points = $7.41 credit | 1,000 MR points = $5.00 credit | -32.5% |
| $50 Gift Card | 6,750 MR Points | 10,000 MR Points | -48% |
| $100 Gift Card | 13,500 MR Points | 20,000 MR Points | -48% |
Platinum Edge
The Platinum Edge card participates in the Membership Rewards Ascent program.
Of all the cards, the biggest earn restructure is occurring with the Platinum Edge card. Its new earn rate as of April 16, 2019 will be:
3 Points per dollar at supermarket and petrol stations
2 Points per dollar outbound
1 Point per dollar on all other spend.
| Partner | Current Rate (until April 15) | New Rate (from April 15, 2019) | Change % |
|---|---|---|---|
| Velocity | 1 MR Points : 1 Velocity Points | 2 MR Points : 1 Velocity Points | -50% |
| Krisflyer | 1 MR Points : 1 KrisFlyer Points | 2 MR Points : 1 KrisFlyer Miles | -50% |
| Skyward | 4 MR Points : 3 Skyward Miles | 2 MR Points : 1 Skyward Miles | -33% |
| Hilton | 1 MR Point : 1 Hilton Point | 2 MR Point : 1 Hilton Point | -50% |
| Marriott | 3 MR Points : 2 Marriott Points | 3 MR Point : 2 Hilton Point | No Change |
| Amex Travel | 10,000 MR points = $100 | 10,000 MR points = $67.50 | -50% |
| Hello World | 10,000 MR points = $100 | 10,000 MR points = $67.50 | -50% |
| Webjet | 10,000 MR points = $100 | 10,000 MR points = $67.50 | -50% |
| Select +Pay with Points | 1,000 MR points = $7 credit | 1,000 MR points = $5.00 credit | -28.5% |
| $50 Gift Card | 6,750 MR Points | 10,000 MR Points | -48% |
| $100 Gift Card | 13,500 MR Points | 20,000 MR Points | -48% |
Platinum Charge
The Platinum Charge card earns in the Ascent Premium program. Its earn structure will be being simplified to 1 Point per dollar at government and 2 Points per dollar everywhere else. As such it is losing the extra points on restaurant spend.
| Partner | Current Rate (until April 15) | New Rate (from April 15, 2019) | Change % |
|---|---|---|---|
| Qantas | 1 MR Points : 1 Velocity Points | 2 MR Points : 1 Qantas Points | -50% |
| Velocity | 1 MR Points : 1 Velocity Points | 2 MR Points : 1 Velocity Points | -50% |
| Krisflyer | 1 MR Points : 1 KrisFlyer Points | 2 MR Points : 1 KrisFlyer Miles | -50% |
| Skyward | 1 MR Points : 1 Skyward Miles | 2 MR Points : 1 Skyward Miles | -50% |
| Hilton | 1 MR Point : 1 Hilton Point | 2 MR Point : 1 Hilton Point | -50% |
| Marriott | 3 MR Points : 2 Marriott Points | 3 MR Point : 2 Hilton Point | No Change |
| Amex Travel | 10,000 MR points = $100 | 10,000 MR points = $50.00 | -50% |
| Hello World | 10,000 MR points = $100 | 10,000 MR points = $50.00 | -50% |
| Webjet | 10,000 MR points = $100 | 10,000 MR points = $50.00 | -50% |
| Select +Pay with Points | 1,000 MR points = $7 credit | 1,000 MR points = $5.00 credit | -28.5% |
| $50 Gift Card | 6,750 MR Points | 10,000 MR Points | -48% |
| $100 Gift Card | 13,500 MR Points | 20,000 MR Points | -48% |
Overall
As mentioned, one of the goals of the changes was to align the transfer rate across programs. The following table shows the way in which the various programs are being aligned.
| Transfer partner | Ascent Premium (now) | Ascent (now) | Gateway (now) | Rates from 15/4 |
|---|---|---|---|---|
| Qantas | 1:1 | N/A | N/A | 2:1 (Ascent Premium only) |
| Velocity | 1:1 | 1:1 | 4:3 | 2:1 |
| Cathay Pacific Asia Miles | 1:1 | 1:1 | 4:3 | 2:1 |
| Singapore Airlines KrisFlyer | 1:1 | 1:1 | 4:3 | 2:1 |
| Emirates Skywards | 1:1 | 1:1 | 4:3 | 2:1 |
| Etihad Guest | 1:1 | 1:1 | 4:3 | 2:1 |
| Malaysia Airlines Enrich | 1:1 | 1:1 | 4:3 | 2:1 |
| Thai Royal Orchid Plus | 1:1 | 1:1 | 4:3 | 2:1 |
| AirNZ Airpoints | 100:A$1 | 100:A$1 | 400:A$3 | 200:A$1 |
| Hilton Honors | 1:1 | 1:1 | 4:3 | 2:1 |
| Marriott/SPG | 3:2 | 3:2 | 3:2 | 3:2 |
Thoughts
So there you have it, the changes in detail. While there is some uplift in earn rates, there are some quite significant devaluations on the redemption side. In fact, I would think that for most people, there will be an overall reduction in the value of the program.
This is not really a surprise. American Express need to stay competitive in an environment where there is much downward pressure on fee income. As such, there is less to go around for rewards.
While there is a bit of an overall uplift in earning, this doesn’t help with points you already have. If you have stockpiled points in the Membership Rewards accounts, then you are going to need to consider your options. While the number of points won’t change come April 15, their value certainly will.
The best option looks to be to move points out before that date, to minimise the loss of value. With a bit of luck, there may some further bonus opportunities over the next few months to taka advantage of.
Fortunately, American Express have other benefits associated with their cards. For example, the ongoing cashback promotions, and, for some, lounge access at some airports.
All in all, it is unfortunate, but I guess deep down, we knew it was coming.