Wednesday, November 23, 2016

American Express Fixed Points Travel Program is here to stay as a full fledged redemption option



We have covered this American Express feature a few times over the past year or so. At those times it was essentially a pilot program, testing out whether American Express Cardholders enjoyed a fixed redemption chart for flight redemptions. It appears they did as American Express has launched a full blown Fixed Points Travel Program that does not have an expiry date. In fact it is here to stay. It is set to officially launch tomorrow or Friday but existing cardholders got advance notice via email today and here is our coverage of it!

The great news is that nothing else in the Membership Rewards program changes. All the other options are also here. The Use Points for Purchases (formerly known as TripFlex) is still there with a 1:1 redemption option for travel purchases. The addition of the Fixed Points Travel Program is a boon for anyone who holds an American Express card that earns Membership Rewards points as it provides you with an potential option to redeem less points for certain flights than you would need to with the Use Points for Purchases program. Ultimately, with Fixed Points you redeem a set amount of points for a flight within a certain region. Think Aeroplan award chart, Avion & Aventura award charts etc. Within those regions there is a maximum ticket price you can redeem for so to maximize your value you'll want to get a ticket as close to that max ticket price as possible. For example a 15,000 point redemption on popular short haul routes has a maximum ticket price of $300 before taxes and fees. You'll want to try to redeem for a ticket at $300. That provides a 2% return if you earned those points at one point per dollar but the return can actually be pushed to 4% if you only earned Membership Rewards points with the 2 points category bonuses on the American Express Gold Rewards card.

What makes Amex's Fixed Points program different than RBC's or CIBC's is that they also have a business class award chart! RBC and CIBC do not. You can technically redeem RBC and CIBC points for business class tickets at a 100 points to $1 ratio (1 to 1.5% return) where as the Amex chart can provide more value.

Here are the current award charts for the American Express Fixed Points Travel Program

So the question is do you use the Fixed Points program or the Use Points for Purchases program. That all depends on what the ticket cost is! Chances are you may even end up using both on one ticket purchase since the Fixed Points does not cover taxes and fees but Use Points for Purchases does.

For example you find a long haul flight within North America for $375 ($300 base fare and $75 taxes/fees) If you use the Fixed Points Program you need to redeem 40,000 Points plus still cover the $75 with cash or points. So you would look at needing 47,500 points to cover it all. However with Use Points for Purchase you only need 37,500 points to cover the full $375. On the other hand if the flight within North America is $780 ($700 base fare + $80 in taxes and fees) the Use Points for Purchase will require 78,000 points while the Fixed Points program only requires the 40,000 points plus 7,500 for the taxes and fees. So you see where this program can provide some huge value!

Here is an example of where Use Points for Purchase would work better:
29,667 points or 53,168 points. I know which option I would take!
and an option where the Fixed Points works better:
56,586 Points or 83,984 Points?

Now some of you may say that you are better off converting those membership rewards points to Aeroplan and utilizing them that way. And your right... some of the time. What if that YYZ-FAT flight isn't available on Aeroplan at the Classic Flight level? Since Air Canada doesn't fly to Fresno you can't redeem Market Fare so you could be screwed and when we looked at the exact dates as the search above, there was no availability.

As you can see right now you can only redeem for round trip flights however when I spoke to American Express last week about this new option they did say they are exploring one way options for the future. Also you can book right up to the day ahead or even shorter to redeem at any of the above point levels unlike RBC Avion's 14 day advance booking requirement. Remember as well that these are revenue tickets so you will still earn frequent flyer miles/points on these flights as long as they a mile/point eligible fare class.

Some more notes:
  • If you don't have enough points for a Fixed Points redemption you won't be shown that option.  
  • Fixed Points is only available via American Express Travel
  • You can still book any travel anywhere else but then you have to use the Use Points for Purchases option if you want to redeem
  • One way flights are being explored but not available at this time
These are the eligible Membership Rewards Enrolled Card Products:
American Express® Card, American Express® Gold Rewards Card, The Platinum Card®, Centurion® Card from American Express, Choice Card from American Express, ChoicePlus Card from American Express™, American Express® Corporate Card for Small Business, American Express® Business Gold Rewards Card, and The Business Platinum Card® from American Express.

Click here for more details on the Fixed Points Program
 

What do you think of this redemption option now that is has become a full fledged regular redemption option?

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