How do American Express (Membership Rewards) points work?

In the interest of making sure that readers understand how their credit card points function, I am doing a series spotlighting different programs and how they allow you to purchase travel.

A number of Amex cards earn Membership Rewards points. My personal favorites are the Premier Rewards Gold, which has no annual fee the first year, and Platinum, which technically has a $495 fee but I used a link to get it for $0 the first year. On Amex Gold, every dollar spent earns one MR point, while every dollar spent on gas and groceries earns two UR points. Even better, when you purchase airfare directly from an airline, you earn three MR points for every dollar spent. These Membership Rewards points can be used in one of two ways:

1.    Spent as cash on airline tickets, hotel nights, other travel

2.    Transferred to an airline or hotel

Using Membership Rewards like cash

If you have a Gold card, you can spend your MR points at exactly one cent apiece on many types of travel. American Express’ Membership Rewards website provides a number of options for travel, including but not limited to flights, hotels, car rentals, trains, and cruises. If the flight you’re buying is $250, American Express would charge you 25,000 points.

If you have a Platinum card, the same is true, except that your MR points are worth 1.25 cents apiece instead of one cent. If you have a large MR point balance (200,000+), it would be worthwhile to sign up for the Platinum Amex to increase their value.

An added bonus of spending Membership Rewards like cash is that you will earn miles on your flight or points on your hotel as if you had booked it with your own money.

Transferring Membership Rewards points to an airline or hotel

Every time you fly you earn “miles” with your airline. Every time you stay in a hotel, you earn “points” with your hotel. These miles and points sit in your frequent flyer program or frequent guest program. For instance, Delta Airlines has SkyMiles. If you go to www.delta.com and log in, you can see the number of SkyMiles you have.

Membership Rewards points can be turned into SkyMiles, being added to your balance just like if you flew a flight on Delta. All you do is log into the American Express website, click your Membership Rewards, and choose to transfer to a partner. You enter your airline or hotel account number, and the MR points turn into that airline or hotel’s points currency.

Just like with Chase’s Ultimate Rewards points, being able to transfer Membership Rewards to airlines and hotels makes these points significantly more valuable than pretty much any other points-earning card. With something like Barclaycard Arrival or Capital One Venture, you can only use your points like cash. That lack of flexibility can really hurt you, especially on complicated itineraries.

These are the partners Membershiup Rewards transfer to:

• AeroMexico
• Aeroplan
• Alitalia Airlines
• All Nippon Airways
• Asia Miles
• British Airways
• Delta Air Lines
• EL AL Israel Airlines
• Flying Blue
• Frontier Airlines
• Hawaiian Airlines
• Iberia Plus
• JetBlue Airways
• Singapore Airlines
• Virgin America
• Virgin Atlantic Airways
• Best Western
• Choice Privileges
• Hilton
• Starwood

As you can see, this list is extensive. There are a lot of programs here that can offer some great value.

How I use Membership Rewards

Personally I use MR points for the most part on ANA, Aeroplan, Delta, and British Airways. These are four of the best programs for last-minute bookings because none of them charge late-booking fees. Delta doesn’t have very good award availability but if I’m traveling on non-peak days like Tuesday or Saturday they almost always have flights that work for me. ANA is a distance-based program so if I’m making a lot of short stops the program is a cheap way to fly United and US Airways. Aeroplan has a similar award chart to United and US Airways and the same access to their miles seats, but they don’t charge the last-minute fee like either of those airlines does. And finally British Airways charges just 9,000 miles roundtrip for flights under 650 miles, so I use those to fly American to Chicago at least once a month.

Key takeaways

Membership Rewards is a great program, period. While the cards that earn MR points are more expensive annually than the Chase cards that earn UR points, the value you can unlock from the Membership Rewards program could easily make these fees worthwhile. I’ve also yet to pay a full annual fee with Amex, as they’re almost always willing to waive at least some of it.

Link to American Express Premier Rewards Gold

Link to American Express Platinum (no annual fee first year)