Thursday, October 27, 2016

American Express Use Points for Purchases explained

Back in July we let our readers know about the American Express Use Points for Purchases program. The big news is that this earlier this month it was officially launched with a press release from American Express.

What is Use Points for Purchases

Per American Express it is "a dynamic new capability that allows eligible Cardmembers to use Membership Rewards points towards a wide range of eligible everyday purchases charged to their Card. Eligible Cardmembers enrolled in the Membership Rewards program can access and redeem against eligible spending on purchases they love such as retail, dining and entertainment including tickets to select events/ concerts through Ticketmaster straight from the Amex App with a few easy taps.

In other words you can now redeem points for any purchases made on a Membership Rewards enrolled Card. The only exception would be fees like annual fees, interest fees etc.  The Use Points for Purchases program is a new capability that is an expansion of American Express’ existing Membership Rewards programs. Now you are probably wondering, what is the redemption rate?

Points redeemed against travel charges in the new Use Points for Purchases program are at a rate of 1,000 points for a $10 credit.

The new feature to redeem points against everyday purchases is at 1,000 points for a $7 credit.

What return does this actually represent?

American Express Gold Rewards Card:
Gas, Grocery, Drug Store & Travel purchases: 1.4% (versus 2% for travel redemptions, 2%-5%+ when converting to frequent flyer/guest programs)

All other purchases: 0.7% (versus 1% for travel redemptions, 1%-2.5%+ when converting to frequent flyer/guest programs)

The Platinum Card from American Express:
All purchases: 0.875% (versus 1.25% for travel redemptions, 1.25%-3.13%+ when converting to frequent flyer/guest programs)

Ease of Use

This new redemption isn't for everyone, as I know some of you prefer to accumulate points over time, but I would think that many of you will want to consider using it, especially since it is so easy to use via the American Express App. Once you open the app and login, you'll see the latest transactions on the card:

Simply click on any one of the transactions and you'll be presented with the following screen:

Extremely simple and easy to use - this is such a great option on the app to be able to go in and quickly redeem for essentially any purchase. Through the app, you can redeem for the whole purchase made on your American Express Card, and if you login to the main American Express website you get the option of redeeming some or all of the points.

What's the verdict?

The redemption rate is good if you have the Amex Gold Rewards Card and make purchases at merchants that collect two Membership Rewards points per dollar as your return is 1.4%. Don’t forget – new Cardmembers also earn a welcome bonus of 25,000 points.

At non-bonus category spend levels it is on the lower end of the return spectrum but the option from Amex is not about being the top rate out there (they already have really great cash back cards like the SimplyCash and SimplyCash Preferred cards) but in providing the utmost in options and flexibility for their Cardmembers – making it one of the most valuable programs out there. The difference here as well with Use Points for Purchases is quick access to redeeming rewards. You don't have to wait until you accumulate a lot of points (Cardmembers with point balances as low as 1,000 are able to redeem for purchases), or the case of the majority of cash back cards, until the anniversary date of your card! You simply have to wait about 24-48 hours when the transaction appears. I know some of you would consider trading higher rates of return for speedy access to redemption.

With that being said, those of you (including us here at Rewards Canada) who hold one or even two of the Amex Cards listed above can consider this a welcome addition that gives you an extra redemption option. Or if you are one of those Cardmembers who has more points than they know what to do with so that after the statement credit you have more cash in your pocket. In any case it is a very good option to have and being able to quickly access it via the app makes it that much more attractive.

What do you think of this new option of being able to redeem Membership Rewards points for any purchase? Will you make use of it?

This is proudly sponsored by our friends at Amex Bank of Canada. This post reflects the blogger's personal opinion about the information provided by the sponsor

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