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American Express Membership Rewards Review

Membership Rewards [3] is the name of American Express’ rewards program and this is the second post in my series on reviewing credit card reward networks. As I said before in the Citi ThankYou Network review, with every credit card rewards catalog, the points to dollar ratio changes with the product you “buy.” My hope is that with this review, we will both have a better understanding of the catalog, how the programs work, where the best exchanges are, and ultimately help you decide whether this rewards program is right for you.

Membership Rewards

The Membership Rewards program is the reward program for all American Express cards that offer points, rather than cash. With AMEX’s program, there is no limit to the number of points you can earn and they never expire. One big difference between this rewards program and others is that enrollment into the Membership Rewards program may come with a fee.

The Membership Rewards catalog is a lot like the Citi ThankYou Network’s catalog. There are plenty of gift cards, airline rewards, and travel perks; but there are a few “swankier” rewards at the upper tiers such as a business class round-trip ticket to Tahiti [4] on Air Tahiti Nui (348,000 points) and a sub-orbital space flight [5] for 20,000,000 points.

You can fly in space!

OK, now that we’re all worked up, here’s some more about the program. Let’s find out where the good deals are, if they exist, and whether this reward program is right for you.

Reward Specials

The “Specials” section is the American Express’s version of a sales section. Whereas the ThankYou Network had maybe a dozen items, Membership Rewards has more like fifty items in the list. There are products as well as gift cards and the specials aren’t necessarily just a discount on the points price. For example, there is a box of a dozen Srixon AD333 balls [6] for 4,100 points. The special is that it’s a buy 1 get 1 free promotion, or 50% off. You can buy them from Amazon for $12.88 a box so the special isn’t such a great deal, but you get the idea.

As for point discounts, the discount is usually in the 15% range. An All-Clad Stainless Nonstick 10-Inch Open Stir Fry Pan [7] that’s normally 17,500 points is now only 14,800 (15.4% discount). It’s not that awesome of a deal because you can buy it on Amazon for $120.

The Best Rewards

My personal favorite reward are Southwest Rapid Rewards points because I live near a popular Southwest airport, Baltimore-Washington International. I value a rapid rewards flight at approximately $300, which used to be how much the vouchers sold for on eBay (well, you bought the drink tickets and they included the voucher :)). I never sold the vouchers personally because I would use them to fly to California, which is a minimum of $300 a ticket.

It takes 16 points to get a voucher and each point costs 1,500 Membership Rewards points. Doing all the math, that values a Membership Reward point at 1.25¢. That’s right, by converting points to a Southwest voucher, you are getting more than a penny a point. If you live near an airport that Southwest flies to, you can get a heck of a deal. In fact, if you get a voucher and use it on a flight of at least $240, then you are getting a penny a point of value (16 x 1500 = 24000).

What if you don’t live near a Southwest airport? No worries, most of the gift cards give you a penny a point of value even at the $10 gift card level. You can get an Old Navy GiftCard for only 1,000 points. A $25 California Pizza Kitchen gift card will run you 2,500 points.

Cash Rewards

Most reward networks give you the option of getting a cash check or a statement credit. American Express doesn’t offer a cash check or statement credit but they do offer the ability to pay for “everyday expenses” with Membership Rewards points at a rate of 0.60¢ per point. The only restriction is that it must be an everyday purchase, the system will indicate which expenses are eligible, and you have to pay for the whole thing with points at that rate. It’s a little bit of a discount over Citi’s conversion to a statement credit, valued at 0.69¢ vs 0.60¢, and it’s a little more restrictive.

It seems like a lot of effort, especially when you can just give statement credits without this extra infrastructure, but it’s an improvement over the past when you couldn’t convert points into dollars. You can learn more from this brief tutorial about the program [8].

My Rewards Math

As I mentioned in the Citi ThankYou Network review, I am always looking to get a penny per point. In the Membership Rewards program, almost every gift card will give you a penny per point conversion, which is great, and none of the products will, which is pretty standard.

Buying Points

American Express does not let you buy points, but it does let you borrow points against future spending. When you log in, you will see a “Available Points Advance” section at the top, which indicates how many points they will advance you for up to twelve months:

All in all, I’ve been pretty happy with the rewards program because of the student loans. I don’t spend a great deal each month with my Citi card so I never had reason to review the catalog until recently. In the case of student loan checks, I had to call in to redeem the reward and always found their customer service to be fast and courteous. It’s an entirely separate call system set up specifically for the ThankYou Network, which probably cuts down on wait time.

If you have a Citi card, do you have a go to “reward” that you always redeem it for? I’m leaning towards some of the $100 gift cards like a Macy’s or Staples.

(Photo: Andres Rueda [9])