How American Express Rewards Are Changing
Smart Money

How American Express Rewards Are Changing

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American Express is rolling out some important changes to its rewards program from April 2019, changing the earn structure on many of its cards, and the overall points redemption value. If you are a cardholder – or you’re thinking about applying for an American Express card in the near future – this is a good time to find what the proposed changes are, and how they may affect you.

What’s changing?

First up, American Express is flattening out the earn structure on some of its cards. That means, instead of having a different earn rate for different types of spending, the earn structure will be simplified. This should make it easier for cardholders to keep track of what their purchases are earning, but it could also have a downside too.

On many of its personal use credit cards, American Express has rounded down earn rates when flattening out their earn rate tiers. While that’s not the case with all cards – the American Express Essential Credit Card and American Express Platinum Edge Credit Card are notable exceptions – most cards will have a lower earn rate once the changes come into effect.

Aside from changing earn rates and flattening out earn structures, American Express will also adjust the value of the points in terms of redemption options. By increasing the number of Membership Rewards points needed to redeem items or convert to frequent flyer miles, this will mean cardholders will have to save harder for the rewards they want.

Is there any good news? Well, for some cardholders, as we said, their earn rate will actually increase. With flattened earn structures, the cards also become easier to understand. In most cases, these changes will not affect anything else on the card, such as annual fees, interest, features or extras, unless American Express chooses to do so on any specific card.

It’s also worth pointing out that unlike many other rewards cards out there, American Express does not limit the number of points cardholders can earn. There are no points caps in place, and there are no spend thresholds. While other cards may reduce or stop points earning past a certain spending threshold, American Express cards do not.

Why is it changing?

So, why is American Express changing its earn rates? Unfortunately, rewards cards in general are not as rewarding as they once were. Back in July 2017 when interchange fees were capped, many card providers started to wind back their rewards programs. Often, that meant putting points caps on cards, and reducing their earn rate.

While American Express wasn’t initially affected by these interchange fee regulations, the company has been making some changes recently to improve card acceptance. Over the past few years, Amex has reduced its merchant fees to ensure its cards are accepted more widely, and without high card surcharges.

Since January 2017, American Express has added more than 120,000 new merchants to its network within Australia. But, American Express has to cover the cost of its continuously expanding network by reducing earn rates across some cards. While this may reduce your point earn per dollar, you can use your card more widely, allowing you to collect points at more places.

Earn Rate Changes

Want to find out if the earn rate on your American Express card will change? Here’s how the changes stack up on American Express personal cards and business credit cards.

Personal Credit Cards

Current Earn Rate

New Earn Rate
(from 15 April 2019)

American Express Low Rate Credit Card
(Only applicable to Card Members enrolled in the Membership Rewards Program)

  • 0.5 points per $1 on government spending
  • 0.5 points per $1 on utilities, insurance & telecommunications
  • 1 point per $1 on all other spending
  • 1 point per $1 on government spending
  • 1.25 points per $1 on utilities, insurance & telecommunications
  • 1.25 points per $1 on all other spending

American Express Essential Credit Card

  • 0.5 points per $1 on government spending
  • 0.5 points per $1 on utilities, insurance & telecommunications
  • 1 point per $1 on all other spending
  • 1 point per $1 on government spending
  • 1.25 points per $1 on utilities, insurance & telecommunications
  • 1.25 points per $1 on all other spending

Qantas American Express Discovery Credit Card

  • 2 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 1 point per $1 on all other spending
  • 1.75 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 0.75 points per $1 on all other spending

American Express Velocity Escape Credit Card

  • 2 points per $1 on Virgin Australia products and services
  • 0.5 points per $1 on government spending
  • 1 point per $1 on all other spending
  • 1.75 points per $1 on Virgin Australia products and services
  • 0.5 points per $1 on government spending
  • 0.75 points per $1 on all other spending

American Express Platinum Edge Credit Card

  • 3 points per $1 at supermarkets
  • 2 points per $1 on petrol
  • 1 point per $1 on overseas spend
  • 0.5 points per $1 on government, utilities, insurance and telecommunications
  • 1 point per $1 on all other spending
  • 3 points per $1 at supermarkets
  • 3 points per $1 on petrol
  • 2 points per $1 on overseas spend
  • 1 point per $1 on government, utilities, insurance and telecommunications
  • 1 point per $1 on all other spending

Qantas American Express Premium Credit Card

  • 2.25 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 1.25 point per $1 on all other spending
  • 2 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 1 point per $1 on all other spending

American Express Velocity Platinum Credit Card

  • 2.5 points per $1 on Virgin Australia products and services
  • 0.5 points per $1 on government spending
  • 1.5 points per $1 on all other spending
  • 2.25 points per $1 on Virgin Australia products and services
  • 0.5 points per $1 on government spending
  • 1.25 points per $1 on all other spending

American Express Explorer Credit Card

  • 0.5 points per $1 on government spending
  • 2 points per $1 on all other spending
  • 1 point per $1 on government spending
  • 2 points per $1 on all other spending

Qantas American Express Ultimate Credit Card

  • 2.5 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 1.5 point per $1 on all other spending
  • 2.25 points per $1 on Qantas products and services
  • 0.5 points per $1 on government spending
  • 1.25 point per $1 on all other spending

Business Credit Cards

 

 

American Express Business Charge Card

  • 0.5 points per $1 on government spending
  • 0.5 points per $1 on utilities & insurance
  • 1 point per $1 on all other spending
  • 1 point per $1 on government spending
  • 1.5 points per $1 on utilities & insurance
  • 1.5 points per $1 on all other spending

American Express Gold Business Charge Card

  • 0.5 points per $1 on government spending
  • 0.5 points per $1 on utilities & insurance
  • 1 point per $1 on all other spending
  • 1 point per $1 on government spending
  • 1.5 points per $1 on utilities & insurance
  • 1.5 points per $1 on all other spending

American Express Business Explorer Credit Card

  • 0.5 points per $1 on government spending
  • 2 points per $1 on all other spending
  • 1 point per $1 on government spending
  • 2 points per $1 on all other spending

American Express Business Accelerator Credit Card

  • 0.5 points per $1 on government spending
  • 0.5 points per $1 on utilities & insurance
  • 2 points per $1 on all other spending (up to 100,000 Membership Rewards points after which the earn rate reverts to 1 point per $1 spent)
  • 1 point per $1 on government spending
  • 2 points per $1 on utilities & insurance
  • 2 points per $1 on all other spending

As you can see, personal cards in general will offer lower earn rates, however, the American Express Low Rate Credit Card, American Express Essential Credit Card, and American Express Platinum Edge Credit Card will end up offering higher earn rates, making it easier for cardholders to earn something back on their card spending.

As for business credit cards, these will also make it easier for cardholders to earn rewards, increasing the earn rate across much of business card spending.

In terms of flattened tiered earn rates, the American Express Platinum Edge Credit Card provides a good example of this. Currently, the card has an earn rate of 3 points per $1 at supermarkets, 2 points per $1 on petrol, 1 point per $1 on overseas spending, 0.5 points per $1 on government, utilities, insurance and telecommunications, and 1 point per $1 on all other spending.

Pretty confusing, right? After the changes have been rolled out, this card will earn 3 points per $1 on supermarket spending and petrol, 2 points per $1 on overseas spending, and 1 point per $1 on all other spending, including government, utilities, insurance and telecommunications.

Of course, the changes could either be good or bad for you, depending on how you use your card. If you now have a higher earn rate on spending you do often, you will have the opportunity to earn more rewards. On the other hand, if you have any of the Qantas or Velocity branded cards mentioned above, you will earn fewer points on purchases related to your frequent flyer airline.

Redemption Rate Changes

Not only will these changes potentially affect the way in which you earn points, they may also affect the way you redeem them. By increasing the points needed to redeem rewards, American Express is unfortunately making it harder for cardholders to earn the rewards they want. Here’s how the changes measure up.

Membership Rewards Gateway

Point Conversion Now

New Point Conversion (from 15 April 2019)

1 MR point = 1 Velocity Point

2 MR Points = 1 Velocity Point

4 MR points = 3 KrisFlyer Miles

2 MR Points = 1 KrisFlyer Mile

4 MR points = 3 Skywards Miles

2 MR Points = 1 Skywards Mile

3 MR points = 2 Marriott points

No change

1 MR point = 1 Hilton Honors point

2 MR points = 1 Hilton Honors point

13,500 MR points = $100 gift card

20,000 MR points = $100 gift card

13,500 MR points = $100 at American Express Travel

13,500 MR points = $67.50 at American Express Travel

Select + Pay with points: 1,000 MR points = $7.41 credit

Select + Pay with points: 1,000 MR points = $5 credit

Points for credit: From 13,500 MR points = $100

Points for credit: From 13,500 MR points = $67.50

Membership Rewards Ascent and Premium Ascent

Point Conversion Now

New Point Conversion (from 15 April 2019)

1 MR point = 1 Velocity Point

2 MR points = 1 Velocity Point

1 MR point = 1 Qantas Point (Ascent Premium only)

2 MR point = 1 Qantas Point (Ascent Premium only)

1 MR point = 1 KrisFlyer Mile

2 MR points = 1 KrisFlyer Mile

4 MR point = 3 Skywards Miles

2 MR points = 1 Skywards Mile

3 MR points = 2 Marriott points

No change

1 MR point = 1 Hilton Honors point

2 MR points = 1 Hilton Honors point

13,500 MR points = $100 gift card

20,000 MR points = $100 gift card

10,000 MR points = $100 at American Express Travel

10,000 MR points = $50 at American Express Travel

Select + Pay with points: 1,000 MR points = $7 credit

Select + Pay with points: 1,000 MR points = $5 credit

Points for credit: From 8,000 MR points = $50

Points for credit: From 8,000 MR points = $40

Obviously, if you have something in mind you want to use your points for – or you have a large stack of points collected – you may want to redeem them for rewards before these changes come into effect. It goes without saying that if you wait until after April 2019, those points you’ve worked so hard to save up will no longer be as rewarding.

Is your American Express card still a good card?

When you have a rewards card in your wallet, it’s a good idea to take it out once in a while to compare it to other options on the market. As we move closer to April 2019, you may want to compare your Amex to other offerings on the credit card market to make sure it still rewards you and your spending.

While American Express may be rolling out these changes, cardholders could still find their card is more rewarding than many others out there. By comparing the rewards on offer, the features and the annual fee, you can check your card’s position in the market against other potential credit cards.

Luckily, CreditCard.com.au makes this process super easy. You can compare American Express cards against each other, and against other rewards cards on the market. Want to make your rewards card as rewarding as it can possibly be? Check out our article Beat the Banks: How To Maximise Your Rewards Points.

Founder - Roland B Bleyer

Roland Bleyer

Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. Ever popular with a low annual fee, purchase rate and 0% balance transfer. For those wanting to earn Qantas points. Have a look at the HSBC Platinium Qantas with strong points earning, low rewards annual fee plus both domestic and overseas travel insurance.
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