Recently, frugal travelers are expressing more disappointment at the continual downgrade of American Express Membership Rewards. Although I used to be an ardent supporter of Membership Rewards for their flexibility and transfer partners, I’ve even downgraded to the Premier Rewards Gold Card from American Express from The Platinum Card from American Express.
Now, it appears Membership Rewards as a whole could be endangered, thanks to some shifts in American Express’ strategy. In March 2018, the financial product company announced they would undertake a strategy shift by reducing transaction fees for merchants. The goal is to get American Express cards more widely supported, resulting in more card usage across the country. The only problem is many of those high fees (along with annual fees) are used to support Membership Rewards.
Is it time to cash out of Membership Rewards altogether and start looking at other flexible programs? Here’s three reasons why Membership Rewards could be on the way out – and what you can do about it.
Membership Rewards has domestically contracted, not expanded
At one point, Membership Rewards was considered among the premier points programs in the world. With every card swipe, frugal travelers earned points that could turn into discounted trips and hotel rooms over time. However, as card issuers have switched alongside industry mergers and acquisitions, the total number of transfer partners to use points with has declined.
Eight years ago, travelers had several places to transfer their Membership Rewards points, including Southwest Airlines Rapid Rewards and Continental OnePass. In 2010, Rapid Rewards left American Express after issuing their credit card with Chase. One year later, Continental dropped from being a transfer partner when they merged with United Airlines. As a result, flyers can now only transfer their miles to two domestic carriers: Delta Air Lines or JetBlue.
Both have some downsides. Delta’s SkyMiles program runs on a dynamic award chart, meaning award flight prices can change without notice, based on schedule and demand. At JetBlue’s TrueBlue program, you take a hit when making a transfer: 250 Membership Rewards points equate to 200 TrueBlue points. Without another domestic partner, Membership Rewards don’t hold as much value as they once did.
American Express keeps launching cards – but none with Membership Rewards
Another thing to consider is the direction American Express is launching their new credit cards in. In the last 12 months, the Centurion has launched five new credit cards: four Hilton Honors cards as part of their expanded deal with Hilton and one new Delta SkyMiles card with no annual fee. Meanwhile, the number of Membership Rewards-earning cards have gone unchanged, with the regular Gold Card going away entirely.
To make matters worse, the Membership Rewards shopping portal was shut down in 2013, with the company claiming less than two percent of cardholders used the site. It was replaced by Amex Offers, a targeted discount program which provides discounts and points-earning opportunities at select retailers. With fewer Membership Rewards earning cards and fewer ways to earn points, getting the right amount of points for that perfect trip is getting a lot harder.
Membership Rewards have the lowest redemption value among bank-issued points
Finally, when compared to Chase Ultimate Rewards, Membership Rewards has the lowest redemption options of any program. Shopping in the American Express mall, getting tickets through Ticketmaster, or using points at shopping partners (like Amazon) net you less than one cent per point – which is generally a bad rate of return.
When using your points at American Express travel, each point is only worth one cent each. Compared to Ultimate Rewards (which offers tiered bonuses in their travel center, based on which card you hold), you can do a lot better with your points options.
What are my alternatives to Membership Rewards?
If Membership Rewards aren’t cutting it for you anymore, there are plenty of alternatives, including cash back credit cards and other points-earning credit cards. The obvious replacement choice are the Chase Sapphire line of cards, including the top-end Chase Sapphire Reserve and the mid-tier Chase Sapphire Preferred. Although these cards come with annual fees, Ultimate Rewards can be used at the Ultimate Rewards Travel Center (with a bonus), transferred to United Airlines’ MileagePlus or Rapid Rewards, or a number of other partners.
For no annual fee, other strong contenders include the Discover it Cashback Match card, which not only matches all of your cash back for the first year, but also lets you earn five percent cashback at different places each quarter. Another option is the Uber Card, which lets you earn big cash back bonuses on multiple categories.
If you are disappointed with your Membership Rewards returns, you are definitely not alone. With changes coming, now may be the time to think about walking away from these flexible points and looking for a new way to earn points.
Are you sticking with Membership Rewards, or are you looking for more rewards elsewhere? Let us know your thoughts in the comments below!
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Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
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- Earn 40,000 bonus miles and 10,000 MQMs after you spend $3,000 in purchases with your new Card in the first 3 months.†
- Earn 15,000 Medallion® Qualification Miles (MQMs) and 15,000 bonus miles after you reach $30,000 in eligible purchases on your Card in the calendar year.
- Earn 2 Miles per dollar spent on eligible purchases made directly with Delta. Earn 1 mile on every eligible dollar spent on purchases.
- Settle into your seat sooner with Priority Boarding and enjoy 20% savings on eligible in-flight purchases in the form of a statement credit.
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Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
| FTG Review | Reward Breakdown | Points Breakdown |
|---|---|---|
Breakdown
Earn (pt.)
Spend
3 months
0
$3,000
Per dollar on eligible purchases with Delta Purchases
2.00
$1
All Purchases
1.00
$1
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