Wednesday, May 30, 2018

7 months in and The American Express Cobalt Card is still going strong - we've earned a LOT of points and huge value organically

Last September American Express launched the Cobalt card - their new card targetted towards Millennials but in reality it is a card that is good for everyone. How good is this card? Good enough for us to crown it the 2018 Top Travel Rewards Credit Card in Canada. There are numerous reasons the card took over top spot in Canada in our 10th annual rankings but the primary reason is the earning ability for Eats and Drinks. The card earns an unprecedented 5 points per dollar on eats and drinks and unlike most of the card's competition, this category bonus is unlimited. This earn rate is huge - it equates to a 3.5% return when looking at it as cash back (Use points for purchases non-travel), 5% return towards any travel (Use points for purchases travel) or even more by converting those points to Starwood Preferred Guest.

About a month after the card was released both my wife and I applied for our own Cobalt cards. At that time the card had it's standard sign up bonus of up to 30,000 Membership Rewards points (split into 2,500 per month for 12 months when you spend $500 per month) but it also had an extra 10,000 points if you spent $3,000 on the card in the first three months as the card's launch bonus. With these bonuses, the 5x multiplier and then a special bonus in December that offered up 10x points on eats & drinks up to $2,000 for the month we have racked up a lot of points in the short 7 months of having the cards.

On my Cobalt card I have earned nearly 138,000 Membership Rewards points and my wife is just over 82,000 points.

Combined we are approaching a quarter million points in this short time. What are those points worth? To us a minimum of $2,200 towards travel. That's a good chunk of change and we aren't even putting business expenses on the cards or any manufactured spending. It's all organic and almost exclusive to eats and drinks categories and the bonuses for getting the cards. We have purchased gift cards here and there for places like and Sephora at grocery stores as this is a good way to earn 5x points for places that don't have category multipliers but for the most part it has been groceries and restaurants. These are pretty big returns for day to day non-business related spending and it is why I recommend for others to get the card - its not hard to earn a lot of points. The points come quickly, here is a snapshot of some my regular spending over a very short period:
As you can see outside of the two Petro-Canada purchases, all of my spending on the card is at the 5x points level.

Related: American Express Cobalt Card Confirmed Multiplier Locations
A listing of all the confirmed 5x/2x/1x point earning locations in Canada and around the globe

The $2,200 of value comes from the Use Points for Purchases on travel purchases but that's not the route we are going right now with the cards. We will be converting those points very soon to Starwood Preferred Guest. The points will convert 2:1 to SPG which equates to about 110,000 Starpoints. I value Starpoints at a minimum of 2.5 cents each but closer to 3 cents (in C$) so right away you can see the value of these points is now up to a minimum of $2,750. The plan is to convert points in the next week to make sure we get the full value out of the Starpoints as come August this could all change. This August the new combined Marriott/Starwood program will launch and in all likelihood I expect the conversion ratio from Membership Rewards to the combined program to change and not for the better. This guess is based on the earn rate of the new Starwood credit cards Stateside. Nothing is confirmed but I'm not holding out hope. The good thing is all points in Starwood accounts up to the date the new program launches will be converted 1:3 so the points will for the most part retain their value. As my wife is the main SPG earner in the family and the one with Platinum status once the points are in my SPG account we will move them over to her account thanks to SPG allowing household accounts

Now let's see if we do a dummy booking and see how much value you can really get out of the Starpoints:

I tested five nights at the St Regis Mauritius Resort which is a category 6 hotel that normally runs 20,000 to 25,000 points per night, however with SPG (and the new combined Marriott/SPG program) when you book 5 award nights you get one free. So 5 nights in November at this resort will cost 90,000 Starpoints. The cheapest non-cancellable rate is EUR2950, for us however, we never book the non-cancellable rates so the price would go up even more from this:

2950EUR equates to C$4,424 ( rate on May 30) which means for 90,000 Starpoints you are getting $4424 in value. That's a redemption value of 4.9 cents per Starpoint. So if we apply that to the 110,000 Starpoints earned via our Cobalt cards our return is $5,390! That's nearly double my minimum valuation of $2,750. Think about this way - between my wife and I, the Cobalt cards have cost us $140 so far in monthly fees and all of our spending is spending we would have done anyways and would have put on other cards if we didn't have the Cobalt cards. To earn nearly $5,400 of rewards for $140 is insane and would be the envy of any financial planner. I can tell you right now that putting $140 into other investments would not generate that sort of return!

Update: Just wanted to add in that this $5390 equates to about a 17% return on the actually spending made on the cards!

Ultimately we will continue to run with two separate Cobalt accounts for another 5 months until the 12 months is up at which time the plan is to cancel my card and get a supplementary card for my wife's account. There will not be a need for two separate accounts as the 12 months of sign up bonuses will be complete and might as well pool the spending into one account.

How about you? How has the Cobalt card been for you? What sort of value are getting from it? let us know in the comments section below!

Don't have the card and are still not convinced and want to learn more about it? Visit our Cobalt Card Resource page for lots more information!

Otherwise here are the details for the card:

This is not a sponsored post and is fully the opinion of the author. American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details, current product information and Terms and Conditions, click the Apply now link.

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