Why American Express is doubling the points of some cardholders...

Why American Express is doubling the points of some cardholders...

Ahead of sweeping changes to the points-earning rate of American Express cards from April 2019, AMEX is doubling the points balance of a select group of cardholders. Are you set for a sudden Membership Rewards points bonanza?

Why American Express is doubling Membership Rewards points

The looming revamp of American Express' Membership Rewards program will impact both earning and conversion rates, with cuts of up to 63% to AMEX points-earning power.

But beyond how many points can be earned on purchases once the changes kick in from April 15 2019, cardholders are also concerned about the value of the points they’ve already piled up.

Once the new 'exchange rates' for converting Membership Rewards to partner airline or hotel loyalty schemes are introduced, any Membership Rewards points sitting in your account will effectively plummet in value.

For example, an AMEX Platinum Charge Card holder with 500,000 points in the Membership Rewards Ascent Premium scheme would currently be sitting on a bounty worth half a million frequent flyer points in programs like Velocity and KrisFlyer, given the current 1:1 transfer rate.

Yet once the conversion rates switch to a less-generous 2:1, those same 500,000 Membership Rewards points would be worth only 250,000 airline frequent flyer points.

To reduce the inevitable pain for many premium customers and offset this exchange rate reset, American Express is now offering to double the number of Membership Rewards points that some ‘high value’ cardholders have in their account.

Although a spokeswoman for American Express declined to go on the record and confirm this one-off arrangement, many of its Australian cardholders have received letters outlining how the double your points promotion will work.

American Express doubling Membership Rewards points: who’s eligible?

For starters, this isn’t a blanket offer open to all cardholders: it’s a targeted promotion mainly for Platinum Charge Card and Centurion customers, who earn points in the highest Ascent Premium tier of Membership Rewards.

As such, the doubling of points isn’t to be ‘expected’ – and double points can’t be requested, either – but if American Express decides that you’re eligible for this offer, you’ll find mention of it in the letter you’ll receive (or have already received) from AMEX, outlining the changes.

Here’s the line you’ll want to look out for:

As a valued American Express Platinum Card (or Centurion) Member and in recognition of the redemption rate changes, we will protect the value of your existing points balance by automatically crediting your account with the same amount of Membership Rewards points that you have at 1:00am AEST on 15 April 2019. For example, if your balance is 100,000 points we will credit an additional 100,000 points. The additional points will be added into your account by 15 June 2019. There’s no need to call us or enrol.

If the letter you receive from American Express doesn’t include this paragraph, or you’re unsure, “Card Members should refer to the letter they have received and call the number on the back of their card if they need any further information,” an AMEX spokeswoman told Australian Business Traveller.

American Express doubling Membership Rewards points: what it means

If you’re one of those customers targeted by AMEX’s double points offer you can breathe easy, knowing that the value of the points you’ve already earned will be maintained from next year.

For example, having 500,000 Ascent Premium points in your account today would currently unlock 500,000 airline frequent flyer points, when converted at a 1:1 rate.

Once that rate changes to 2:1, but your existing balance of points is doubled, your new tally of 1,000,000 Ascent Premium points will still be worth 500,000 airline frequent flyer points.

It’s not a case of receiving double frequent flyer points, as such – the double points offer merely preserves the value of the points you’ve already earned, so that when you later convert them into frequent flyer points, you won’t be worse off compared to today.

Just note that while the new frequent flyer conversion rates kick in from April 15 2019, that serving of double points may not arrive until June 15 2019. You’ll temporarily have access to fewer frequent flyer points from your credit card until the system catches up and credits you with those double points, to get you back to where you were before the changes took effect.

It’s not that you’ll lose anything by converting your balance between April 15 and June 15 – the ‘double points’ received will be based on your April 15 balance, after all – it’s just that you’ll temporarily have access to fewer points during that short window, so plan your trips or points conversions accordingly.

American Express doubling Membership Rewards points: if you're not eligible

Australian Business Traveller understands that Membership Rewards Ascent and Gateway members are not being targeted by this double points deal, but as always, carefully read the letter AMEX has sent you, just in case: and for official confirmation on the changes.

Assuming your points balance isn’t being doubled, you’ll have until April 14 2019 to use or convert your Membership Rewards points at the current, more advantageous rates – that's generally 1:1 for Ascent members and 4:3 for Gateway members, before those rates become 2:1 from April 15.

Just watch out for each frequent flyer program’s points expiry rules – particularly if you don’t yet have a concrete plan as to how you spend those points – because a point expired is a point wasted!

Also read: Confused about AMEX's credit card changes? Here's how they affect you

Chris Chamberlin
Chris Chamberlin is a senior journalist with Australian Business Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!
 

12 comments

  • daft009

    daft009

    11 Dec, 2018 05:49 am

    Are any ascent people being targeted, depending on spending criteria?

    I've heard rumours of another round of letters in December for these cases.
    No member give thanks

  • daft009

    daft009

    11 Dec, 2018 05:51 am

    What if someone applied for the platinum charge today and was successful?
    No member give thanks

  • 346

    346

    11 Dec, 2018 08:16 am

    I'm yet to hear of a Platinum Charge Card holder who hasn't received the double points offer.
    Wonder if my a miracle the balance will double prior to the exchange rate drop!!!
    No member give thanks

  • Satoshi Takayama

    Michael Kao

    11 Dec, 2018 09:08 am

    It's not wise to "value" customer based on the card type they hold. I have colleagues that has charge card but hardly spend on it and got double points offer.

    I on the other hand, pumps ~$20k a month and hold 6 Amex card between me and my wife with total annual fee about the same as plat charge. The reason I didn't get charge was simply it wasn't the card for me. Yet I'm classified as non-valuable. ie. Expandable. Not happy.
    Member who gave thanks

    daft009

  • Dean

    deanr

    11 Dec, 2018 10:38 am

    Well, think about it: just because you're a highly engaged customer doesn't mean you're a highly profitable customer. The platinum card is quite expensive, so somebody paying a very high annual fee and barely using the thing would actually be quite profitable, because they're paying a lot but costing AMEX very little in return on points which cost money to buy. Somebody like you with 6 cards is no doubt maximising everything from the use of travel credits to points to lounge access and whatever else, and all of those things cost AMEX money. You might be paying about the same overall amount in annual charges every year but you're no doubt a much more expensive customer to service than somebody who pays a lot more for perhaps a lot less, depending on the use of the card.
    No member give thanks

  • daft009

    daft009

    11 Dec, 2018 10:41 am

    the high spender is also earning amex more in interchange fees, so not a fair comparison IMO.
    No member give thanks

  • Dean

    deanr

    11 Dec, 2018 10:49 am

    Earning more fees, but causing AMEX to spend more money on points, which are expensive, especially from international frequent flyer programs given most airlines operate in USD, and the AUD:USD exchange rates haven't been good for a while. Depending on where the cards are used, the fees charged to each merchant and the points earning rate on the card, the more a cardholder spends on a credit card, the less profitable they can become in some circumstances.

    But, when you look at a card like the plat charge which only gives 1 FF per $1 spent right now, the more somebody spends on a card like that, likely the more profitable they become, because the AMEX merchant fee is the same regardless of the card type used, yet the plat charge's normal earn rate is currently low compared to AMEX's other cards, so the cost in points is lower too.

    (I'm an accountant: numbers are my thing, so I can understand why AMEX is trying to keep what would generally be its most profitable cardholders happy. Won't pretend I'm happy about the changes, though! I think AMEX has made these much more complicated than they needed to be when a change in earn rate would have been much more simple for the same result.)
    No member give thanks

  • Satoshi Takayama

    Michael Kao

    11 Dec, 2018 11:47 am

    I fully understand that. But if they plainly double everyone's point or simply adjust the future earn rate wouldn't cost them more.

    You know what I'll do, and many others who is in my position will do? We will transfer all our point balance out by April 15 at current rate. So whatever Amex has to pay to buy the FFP, either now or later, won't save them a single cent. In fact based on the USD argument, it's probably worse if we all transfer now when the exchange rate isn't favorable. At the same time they'll leave a sour taste in our mouth and many of us might cancel the cards. I know I will. I will only return for the sign up bonus. They force us to go from loyal customers to sign up bonus hoppers.
    No member give thanks

  • Satoshi Takayama

    Michael Kao

    11 Dec, 2018 11:52 am

    So basically they are saying is:
    "Yup! You signed up our most expensive card, so you are our valued customer."
    "Well, you signed up our cheap card, even though you spend much money on our card, and referred many of your friends to us, you are not profitable. Just pack up and leave!"

    At least they should offer us a chance. Whoever choose to sign up plat charge now can get their points protected. That way us wiser. For now I feel like those 3rd class pax being locked at the bottom of the sinking titanic. Yes, we are expandable.

    "Half if the pax are going to die",

    "Not the better half!"
    No member give thanks

  • Andrew

    andyf

    11 Dec, 2018 09:41 am

    Why didn't they just change the earn rates and be done with it? By changing the redemption rates and messing with existing point balances they have created a whole new mess. Obviously they thought they could save some money by devaluing point balances.

    Good to know (as a Platinum Edge card holder), I'm not valued, but unsurprising. Amex is really trashing their brand.
    No member give thanks

  • crosscourt

    crosscourt

    12 Dec, 2018 03:23 pm

    I received the letter and had a phone call from them. It is only a one off offer. This band aid measure is not changing things for the long run. This has been a shocking PR exercise from AMEX. I've had an AMEX card since 1981 and a platinum charge card and credit card for nearly two decades. A VERY POOR move by AMEX and they should not be let off the hook.
    No member give thanks

  • Nathan Jordan

    nathanjordan

    15 Dec, 2018 11:22 am

    I had confirmed last night by the contact centre that our Aus-issued Platinum charge card will DEFINITELY have the points balance doubled. The contact centre staff member actually used the phrase, "one of your most valuable customers"!
    No member give thanks

Guest

18 Jul, 2019 05:29 pm

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