Why the American Express Cobalt Card is the best card to get for your future travel plans

It has now been over a year since the Rewards Canada family has set foot on a plane and like many Canadians we are itching to get away! That being said we are fine to continue to wait to travel until things are safe to do so and also as important, enjoyable to do so. I say enjoyable in the terms of less restrictions in place when a lot of the current measures are lifted. So what do you do until said time? Do what we are doing. You make sure you rack up as many points and miles possible for those future travels. That’s our motto of the year and of our Top Travel Rewards Credit Card rankings from which the number one card overall in Canada is your best bet for those future travels. The American Express Cobalt Card is one of the best options in Canada to score a lot points – and valuable flexible points at that – to help fund future travel. In fact in our household we actually run with two Cobalt accounts to maximize the points we earn off the cards.

If you don’t have this card in your wallet doing it’s part for your overall rewards credit card portfolio you should definitely consider it. Let’s look at why and how you can make the most of this card for future travel.

Best Ever Welcome Bonus of 45,000 points is on right now until May 5

A new limited time welcome bonus for the American Express Cobalt Card was launched this past January and it is the best one we have seen since the card launched four years ago. The bonus offers up to 45,000 points when you apply for the card by May 5, 2021. The welcome offer is broken down as follows:

  • 15,000 Membership Rewards points when you spend a total of
    $3,000 in purchases on your Card in your first 3 months of
  • 2,500
    Membership Rewards points for each monthly billing period in which you
    spend $500 in net purchases on your Card in the first year for a total of 30,000 points

So if we look at this bonus you’ll want to ensure you can spend $500 on this card each and every month for the first twelve months. For most Canadians this shouldn’t be too hard to do. However you’ll have to double that in the first three months to make sure you get that additional 15,000 points being offered on the card.

5x Points on Eats & Drinks, 2x points on transit, travel, gas & ride sharing

The Cobalt Card was one of the first cards in Canada to offer 5x points with at least a 1% travel redemption value on Eats & Drinks purchases. What is covered under Eats & Drinks? Well pretty much any grocery store, restaurant, food delivery service, bar or coffee shop that you can think of. The only outlier to the 5x seems to be liquor stores. And even though the card’s marketing states “in Canada” for these purchases we know from experience that you will earn 5x points on these purchases outside of Canada so long as the merchant codes properly in Amex’s system. The 5x points earned on the Cobalt Card is capped at $30,000 spend annually. So if you spend more than this there is the option of getting two accounts if you and your partner are able to, and then you’ll have $60,000 in annual spend available. That’s what we do in the Rewards Canada family, once we hit $30,000 on one account we move to the other. The points however cannot be combined so you’ll have to redeem separately when it comes time to do so (Marriott redemption is an exception, read more below)

Thanks to the Rewards Canada community we have an excellent resource on our site listing American Express Cobalt Card Confirmed Multiplier Locations in Canada and worldwide.
Visit the listing here.

A small sample of confirmed multiplier locations

The card also earn 2x points on public transit (bus, subway, taxi, ride
sharing), travel and gas. The 2x points is not capped annually like the
5x points.  All other purchases on the card will earn 1 point per dollar
spent. For the context of this post however we
focus on the 5x points earn.

Now you might say there are other options to earn 5x points like the Scotiabank Gold American Express card since the Scotia card offers more 5x points categories and a higher annual cap of $50,000. Well you are not wrong on the earn side, that card is also amazing and I’ll touch upon when you should consider it over the Cobalt card later on – but when it comes to value, the Cobalt’s 5x points has higher potential and more options than Scotia’s. Honestly if you want the best of both worlds there is no harm in getting both of these amazing 5x points cards.

So many options to you use your points for travel

A unique feature about American Express and its Membership Rewards program – those are the points that the Cobalt Card earns, is that it is the most flexible program in our market today. For travel alone they give you three options whereas most other cards are only one or two all the while American Express gives you excellent value across all three options. Those three travel redemption options are:

  • Fixed Points for Travel
    With Fixed Points for Travel you redeem a set amount of points for flights within or to/from specific areas. Think of this as your traditional old school frequent flyer program award chart or for those more versed in credit card rewards, the same thing as the Aventura and Avion flight reward charts.
    This option can provide a return as high as 10% on your card spending
  • Flexible Points Travel program (used to be Use Points for Travel Purchases)
    This redemption option allows you to book travel when you want, with whomever you want and to wherever you want. Simply pay for the booking on your Cobalt Card and once the charge shows up on your account you redeem points against that charge. The beauty in this redemption is that you don’t have to have the full amount of points. So long as you have 1,000 points you can redeem them towards a travel charge. The redemption rate is 1,000 points for a $10 credit which translates to a return of up to 5% on your card spending.
  • Convert to other travel rewards programs
    The third and final travel redemption option on the Cobalt Card is the ability to convert the points earned to Marriott Bonvoy or Hilton Honors. Since the Cobalt Card’s Membership Rewards points are classified as Membership Rewards Select points you only get those two hotel options unlike your standard Membership Rewards program that allows conversion directly to airlines like Air Canada and British Airways. That isn’t a huge deal here with the Cobalt Card since you can convert to Marriott Bonvoy and then the Marriott program allows you to convert its points to over 40 airlines including Air Canada! The Marriott conversion is your best bet with the Cobalt  Card (Hilton only makes sense if you utilize that program) and points convert at a ratio of 1 Membership Rewards point to 1.2 Marriott Bonvoy points. We value Marriott Bonvoy points at a minimum of 1 cent each which means you are earning a return of up to 6% on your card spending but in most cases it will be higher than that.

Up to two reward flights after only $3,000 in spending in 3 months.

Now let’s start looking at how quickly this card racks up points so that you’ll be ready for those future travels! Our first look is early on on having the card and how you can have two select flights after only spending $3,000 the card in the first three months. You’ll recall from above the current limited time welcome bonus offer provides a bonus of 15,000 points when you spend $3,000 in the first three months of having the card. Let’s assume you spent $1,000 in each of those months and you only spent it on eats & drinks since that’s what most of us are only spending money on right now. With that spend here’s how many points you would have:

  • 15,000 points from the increased welcome bonus for spending $3,000 in the first 3 months
  • 15,000 points from the 5x points earned on that $3,000 in spending
  • 7,500 points from the 2,500 bonus points earned in each statement period you spend $500 during the first year.

That’s 37,500 points in the first three months of having the card assuming you don’t have any additional spending on the card. When we look at the Fixed Points for Travel program they have a special redemption option where you only have to redeem 15,000 points for a flight on select routes:

As you can see you can redeem 30,000 of the 37,500 points you have earned for two tickets on any those routes listed above with a maximum base ticket price of $300 each.  There’s your two tickets after only $3,000 in spending thanks to the 5x points earn rate and the welcome bonus offer. When you think about it and don’t take into account the welcome bonus, you earned one of these two tickets from the 5x points for $3,000 in spending. No other card in Canada can do that. The Scotiabank Gold American Express card would be the closest as you also have 15,000 points but that would only cover $150 not up to $300 like this.  In general most programs have a really hard time competing with this. Just check our Clash of the Reward Charts to see how one of Canada’s most popular programs, RBC’s Avion can’t even compete against Amex’s Fixed Points for Travel:

Recommended reading Clash of the Reward Charts! Amex vs. RBC 

Here’s a look at all the Amex Fixed Points for Travel redemption rates – and yes you can redeem for business class tickets as well:

Now our first example above only looked at three months – that’s a short timeline given today’s circumstances around travel. Add in three more months of just spending $500 per month on groceries, dining and other eats & drinks and you have another 15,000 points (2,500 points per month for the spend + the 2,500 bonus) for 52,500 points. That’s three flights on the routes listed above, two short haul tickets, one ticket to a sun destination. For some of you travelling in six months might not even be in the picture so let’s continue and see what you would have after 12 months. As long as keep at the small $500 per month requirement you’ll keep getting that 2,500 bonus points each month right up to the 12 month. So there’s another 15,000 points and if you only made those $500 in monthly purchases at 5x points locations you have yet another 15,000 points. All told after one year you have 67,500 points. That’s four flights on those select popular routes above or one ticket to Europe with other options in between.

As you can see you can get big value when redeeming via American Express’ Fixed Points for Travel chart. It works for both economy and business class tickets and we have found that even when the ticket price exceeds the maximum set value you still get your up to 5% return on the amount charged over and above as that portion simply becomes a Use Points for Travel Purchases redemption. (See the next section)

Flexible Points Travel Program

Your next option is to simply redeem points as credit against a travel charge you make on your Cobalt Card. This is a great option that provides the most flexibility since you are in command of where you book, who you book and when you travel. This option is great when ticket pricing may be low and you shouldn’t be redeeming via Amex’s Fixed Points for Travel, when you don’t have enough points for a Fixed Points redemption but wanted to discount the travel purchase you make, paying for hotel stays, fees and taxes on award tickets, cruises, all inclusive vacations  and so much more. 

With the Flexible Points Travel Program (nee Use Points for Travel Purchases) you simply redeem 1,000 points for a $10 credit towards that travel charge. You can redeem any amount of points going up from the 1,000 point minimum. Have 16,550 points and purchase a $275 ticket from WestJet? You can redeem that amount for a $165.50 credit towards that purchase and you end up only being $95.50 out of pocket. 

If we take our spend examples from above here is the value of the points you would have for this redemption option:

  • 37,500 points after 3 months: $375
  • 52,500 points after 6 months: $525
  • 67,500 points after 12 months: $675

The beauty with this if you do choose to book via Amex Travel you can actually combine the Fixed Points for Travel and Flexible Points Travel options. The Fixed Points only covers the base fare – so if you happen to redeem for a short haul popular route ticket that costs $300  + $80 in fees/taxes you can redeem the 15,000 points for the $300 base fare and then 8000 points to cover the $80. Say there’s an awesome seat sale going and the ticket is only $125 before fees and taxes? Don’t use Fixed Points for Travel instead go the Flexible Points route as you would only need to redeem 12,500 points for that $125 base fare instead of 15,000 points. Here’s a great example of a ticket between Toronto and Montreal for August 17-24, 2021:

With Fixed Points for Travel you would redeem 15,000 points plus pay $104.80 in taxes and fees, if we convert the taxes and fees to a points conversion your total outlay would be 25,480 points. Whereas Flexible Points Travel it is only 21,680 points.

Another perk of Use Points for Purchases is that you have up to 12 months after the charge posts to your account to redeem points against it. So say you make a travel purchases that posts on April 15th you would have until April of the next year to redeem points. So you can take that vacation now and help pay for it with your future points earning.

Convert to other travel programs

The Cobalt Card falls into American Express’ Membership Rewards Select program. This means that you don’t have the option to convert points to airline frequent flyer programs like Membership Rewards Tier and First programs. However Membership Rewards Select does allow for transfers to Amex Canada’s hotel partners which are Hilton Honors and Marriott Bonvoy. In this case we are only going to look at Marriott Bonvoy as that is where value is to be had. You can convert points from American Express to Marriott Bonvoy at a rate of 1 to 1.2. This means for your 5x points spending you are earning 6 Marriott points per dollar spent – no other Marriott earning card in Canada can match that. So let’s look at what you can get for the same point examples we have been using across this post:

  • 37,500 points after 3 months: 45,000 Marriott Bonvoy Points
  • 52,500 points after 6 months: 63,000 Marriott Bonvoy Points
  • 67,500 points after 12 months: 81,000 Marriott Bonvoy Points

Here are the primary Marriott Bonvoy point requirements for a free night:

After three months you could have up to seven nights at a Category 1 Hotel to one night at a Category 5 hotel or even a Category 6 if you catch an Off Peak rate. Six months in you have three nights at a Category 3 hotel to one night at a Category 7 hotel. After a year you inching close to one night at a top end Category 8 hotel, two Category 5 nights or up to twelve nights at a Category 1 hotel. But wait you might say that my math is wrong on those twelve nights or the initial seven nights after three months! 81,000 points only covers just over 10 nights at 7,500 points per night but Marriott has an awesome feature where you get the 5th night free when you book 5 or more award nights for one stay. That means you could book two six night stays or one twelve night stay and only redeem 75,000 points. Let’s look at some examples!

In three to six months most of us will only be looking at travel within Canada so let’s look within our borders for this redemption example. We look at three nights at the Delta Hotels Saint John in New Brunswick. It is 55,000 points for a three night stay over Labour Day weekend (September 2021) which easily falls into the 63,000 Mariott Bonvoy points you would have:

Cash wise the same room would cost you $545 all in – this makes each Bonvoy point worth 0.99 cents each. So for 63,000 points you have about $624 in value. About $100 more than what the points are worth via the Flexible Points Travel program.

Hopefully in a year we should be traveling beyond our borders so let’s look at some exotic redemption options! Here’s a six night pay for five nights example at one of the better Category 1 hotels in the Marriott portfolio – the Protea Hotel Lusaka Safari Lodge – this hotel is set on its own private game reserve in Zambia! Six nights are only pricing out at 35,000 points and the same room including all taxes and fees would run US$974. That puts the value of each point redeemed at 3.5 cents each (C$) – multiply this across the 81,000 points you earned from the card and you have $2,835 in value! Simply amazing!

What makes the Marriott conversion option even better is that once a year or on some occasions twice per year American Express will offer a bonus when converting points to Marriott. The last time it happened the bonus was in September of 2020 and the bonus was 25%. One more thing to keep in mind, especially if you are playing the two player game with two Cobalt accounts, Marriott allows you to transfer up to 100,000 points annually to other members  so this is easy way to combine points from those multiple cards into one.

Wrapping it up

With so many travel redemption options and the utmost in flexibility you can see why the American Express Cobalt Card is the best bet for funding your future travels. Couple this the immense value out of each point earned and you can see why this is best overall travel rewards credit card in Canada. If you are like us having those flexible options is key as we don’t we even know where we will travel or when we will travel. We’ve been tossing up Japan, Greece, Maui, Saskatchewan, yes Saskatchewan, the Maritimes and so many other places when things open up so having cards that don’t tie us into limited options are the safest bet for us. And if you are like us in that you actually spend more than $500 a month on eats and drinks then the amount of points being racked up are much more than given in the above examples.

Editors Note:

If the Fixed Points for Travel and the conversion options are something
you know you would never use you could consider getting yourself the
Scotiabank Gold American Express Card. This card also earns 5x points with a
1,000 points to $10 credit for towards travel and
offers more categories (notably Entertainment) to earn those 5x points coupled with a $50,000
annual cap for those 5x points.

The American Express Cobalt Card at a glance

All images via American Express or Marriott Hotels


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