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american express membership rewards value 02/01/2020

American Express Membership Rewards Value

Updated February 1st, 2020

American Express’ Membership Rewards, along with their competitor, Chase Ultimate Rewards are the two most valuable award programs. Like it’s peers, Membership Rewards offer the astute awards enthusiast ample opportunity for high-valued redemptions. Conversely, and perhaps more-so than others, they offer some very low-valued options as well. Let’s avoid those.

After all transfer partners were duly evaluated, we assigned an excellent ACRV of 2.34¢ to each Amex Membership Reward. Of course, it’s worth noting that we base our value entirely on the assumption that one will inevitably use their points via a transfer partner. By utilizing this methodology, we’re claiming that Membership Rewards are worth slightly more than Ultimate Rewards. If lower-value redemptions, such as award booking portals or gift card purchases were taken into account, the result would likely be the other way around.

Transfer Partners

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The most lucrative Membership Rewards redemption opportunities appear when points are transferred to an airline or hotel partner. Below, one can see that we found six transfer partners that had at least one award in excess of 6¢. To put that in perspective, The Platinum Card commonly has a signup bonus of 60,000 Membership Rewards. If one were to transfer to say, Cathay Pacific Asia Miles and redeem for 5¢, that signup bonus would be worth a whopping $3,000!

american express membership rewards transfer parters value 02/01/2020

So What about Real-World Expectations?

It’s easy for a points and miles enthusiast to get excited about redemptions that might result in an ROS that can exceed 10%. But, what’s actually likely to happen? To answer, this, we need to perform a little statistical analysis. By viewing the bell curve below, we can see the average non-zero value across all redemption partners is 0.79¢. For an explanation as to why this differs from our ACRV, take a look here. Furthermore, the standard deviation is 0.97¢. This means that, theoretically, 68% of redemptions should occur between 0 and 1.77¢(excluding the portion of the curve less that zero). That’s quite a large range, and we would hope that an Amex customer would think twice about any redemption worth less than 1¢.

american express membership rewards value distribution 02/01/2020

Other Ways to Redeem

After transferring Membership Rewards to a travel partner, the next most-lucrative redemption option would likely be to book travel directly with Amex. Sadly, unlike Chase’s booking portal, there appears to be little reason to do so. Most booking options, quoted in cash and points, tend to reveal a redemption rate of just 1¢.

If One Wants to Throw Value Away

Buy a gift card. Many are available, typically at a redemption value of just 0.8¢.

One further has the ability to pay for previous charges using their Membership Reward balance. Unfortunately, this is an even worst use of points than purchasing gift cards. Most charges will be “paid” using a redemption value of just 0.6¢.

If paying for previously purchased goods does not sound like a good idea, and one still wants to cheat themselves, the option to shop via Amex’s Membership Reward Mall exists. While there isn’t a common redemption value here, several cursory examples averaged 0.51¢. This was obtained using the “Amazon price divided by points” method.

To Recap

American Express Membership Rewards, along with Chase’s Ultimate Rewards, occupy the top strata of the points and miles world. However, like all programs, they can be extremely lucrative or extremely useless. Below is a quick summary, in order, of how we would use Amex Membership Rewards.

Value of Membership Reward Redemptions
Transfer to a travel partner >1.5¢
Book using Amex Travel’s Portal
Buy a Gift Card .5-1¢
Pay off Prior Charges .6¢
Shop the Membership Awards Mall .5¢

Compared to it’s Peers

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