Big news: American Express is adjusting both earn rates and points transfer rates for most cards next year

Our analysis of the changes coming to American Express Membership Rewards in April 2019

GUIDE: Program Guide
DIFFICULTY: Intermediate
TIME TO READ: 5 minutes
POSTED: November 15, 2018
UPDATED: December 4, 2018
LOYALTY PROGRAMS: Relevant to Multiple Programs, American Express Membership Rewards

From 15 April 2019, American Express are changing how many points are earned for different types of spend, with those points transferring at lower rates to their partner loyalty programs.

This master guide outlines the changes, gives our analysis and will be updated moving forward as we find out new information.

Here is American Express’ official page on the changes.

Why are these changes occurring?

These changes are in response to the challenges to merchants following the Reserve Bank of Australia capping the fees credit card providers can charge merchants. American Express is following most other providers (like Westpac) in devaluing its Membership Rewards program.

As we said back in 2016:

These new laws will dramatically reduce the amount of money banks get to fund rewards programs.

And they have. While American Express was not specifically impacted by the RBA changes, the market has shifted. As such, they have made a decision to reduce their merchant fees in order to continue their efforts in driving greater acceptance of their cards.

Here is our summary of the changes coming to American Express cards from 15 April 2019.

Changes to earn and effective earn rates

The changes to the earn rates for all American Express personal cards are shown below but note that the more important changes are those to effective earn rates, which follows this first (quite comprehensive) table.

 Current earn rateFuture earn rateChange
Explorer

Business Explorer

2 points per $ on all purchases except Government spend

0.5 points per $ on Government spend
2 points per $ on all purchases except Government spend

1 point per $ on Government spend
No change on all purchases except Government spend

+100% on Government spend
Essential1 point per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend
1.25 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

1 point per $ on Government spend

1.25 points per $ on Utilities, Insurance and Telecommunications spend
+25% on all purchases except Government, Utilities, Insurance and Telecommunications spend


+100% on Government spend

+150% on Utilities, Insurance and Telecommunications spend
Platinum Edge3 points per $ on purchases at supermarkets

2 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases
3 points per $ on purchases at supermarkets

3 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases
No change on purchases at supermarkets

+50% on purchases at fuel outlets

No change all other purchases except Government, Utilities, Insurance and Telecommunications spend

No change on Government, Utilities, Insurance and Telecommunications spend


No change on overseas purchases
Platinum Charge3 points per $ on purchases at restaurants

2 points per $ on travel and overseas purchases

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend
2.25 points per $ on purchases at restaurants

2.25 points per $ on travel and overseas purchases

2.25 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

1 point per $ on Government spend

2.25 point per $ on Utilities, Insurance and Telecommunications spend
-25% on purchases at restaurants

+13% on travel and overseas purchases

+125% on all purchases except Government, Utilities, Insurance and Telecommunications spend


+100% on Government spend

+350% on Utilities, Insurance and Telecommunications spend
Qantas Ultimate1.5 points per $ on all purchases except on Qantas services and Government spend

2.5 points per $ on Qantas services

0.5 points per $ on Government spend
1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend
-17% on all purchases except on Qantas services and Government


-10% on Qantas services


No change on Government spend
Qantas Premium1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend
1 point per $ on all purchases except on Qantas services and Government
spend

2 points per $ on Qantas services

0.5 points per $ on Government spend
-20% on all purchases except on Qantas services and Government


-11% on Qantas services


No change on Government spend
Qantas Discovery1 point per $ on all purchases except on Qantas services and Government spend


2 points per $ on Qantas services

0.5 points per $ on Government spend
0.75 points per $ on all purchases except on Qantas services and Government spend

1.75 points per $ on Qantas services

0.5 points per $ on Government spend
-25% on all purchases except on Qantas services and Government


-13% on Qantas services


No change on Government spend
Velocity Platinum1.5 points per $ on all purchases except on Virgin Australia services and Government spend

2.5 points per $ on Virgin Australia services

0.5 points per $ on Government spend
1.25 points per $ on all purchases except on Virgin Australia services and Government spend

2.25 points per $ on Virgin Australia services

0.5 points per $ on Government spend
-17% on all purchases except on Virgin Australia services and Government spend


-10% on Virgin Australia services

No change on Government spend
Velocity Escape1 point per $ on all purchases except on Virgin Australia services and Government spend

2 points per $ on Virgin Australia services

0.5 points per $ on Government spend
0.75 points per $ on all purchases except on Virgin Australia services and Government spend

1.75 points per $ on Virgin Australia services

0.5 points per $ on Government spend
-25% on all purchases except on Virgin Australia services and Government spend


-13% on Virgin Australia services

No change on Government spend
Business

Gold Business

1 point per $ on all purchases except Government, Utilities and Insurance spend


0.5 points on Government, Utilities and Insurance spend

1.5 points per $ on all purchases except Government, Utilities and Insurance spend

1 point on Government, Utilities and Insurance spend
+50% on all purchases except Government, Utilities and Insurance spend


+100% on Government, Utilities and Insurance spend
Business Platinum2 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend
2.25 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

2.25 points per $ on all purchases except Government, Utilities and Insurance spend

2.25 points on Utilities and Insurance spend

1 point on Government spend
+12.5% on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

+125% on all purchases except Government, Utilities and Insurance spend

+350% on Utilities and Insurance spend

+100% on Government spend
Business Accelerator no longer available2 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend
2 points per $ on all purchases except Government, Utilities and Insurance spend

2 points on Utilities and Insurance spend

1 point on Government spend
No change on all purchases except Government, Utilities and Insurance spend

+300% on Utilities and Insurance spend

+100% on Government spend

The new effective earn rates are shown below. Note that these are based on transfers to Velocity, KrisFlyer and Asia Miles.

 Current effective earn rateFuture effective earn rateChange
Explorer

Business Explorer
1.5 points per $ on all purchases except Government spend

0.375 points per $ on Government spend
1 point per $ on all purchases except Government spend


0.5 points per $ on Government spend
-33% on all purchases except Government spend


+33% on Government spend
Essential0.75 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.375 points per $ on Government spend

0.375 points per $ on Utilities, Insurance and Telecommunications spend
0.625 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend


0.5 points per $ on Government spend

0.625 points per $ on Utilities, Insurance and Telecommunications spend
-17% on all purchases except Government, Utilities, Insurance and Telecommunications spend


+33% on Government spend

+67% on Utilities, Insurance and Telecommunications spend
Platinum Edge3 points per $ on purchases at supermarkets

2 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases
1.5 points per $ on purchases at supermarkets

1.5 points per $ on purchases at fuel outlets

0.5 points per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.25 points per $ on Government, Utilities, Insurance and Telecommunications spend

0.5 point per $ on overseas purchases
-50% on purchases at supermarkets

-25% on purchases at fuel outlets

-50% all other purchases except Government, Utilities, Insurance and Telecommunications spend


-50% on Government, Utilities, Insurance and Telecommunications spend


-50% on overseas purchases
Platinum Charge3 points per $ on purchases at restaurants

2 points per $ on travel and overseas purchases

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend
1.125 points per $ on purchases at restaurants

1.125 points per $ on travel and overseas purchases

1.125 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend


0.5 point per $ on Government spend

1.25 point per $ on Utilities, Insurance and Telecommunications spend
-63% on purchases at restaurants

-44% on travel and overseas purchases

+13% on all purchases except Government, Utilities, Insurance and Telecommunications spend


No change on Government spend

+150% on Utilities, Insurance and Telecommunications spend
Qantas Ultimate1.5 points per $1 on all purchases except on Qantas services and Government spend

2.5 points per $1 on Qantas services

0.5 points per $1 on Government spend
1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend
-17% on all purchases except on Qantas services and Government


-10% on Qantas services


No change on Government spend
Qantas Premium1.25 points per $1 on all purchases except on Qantas services and Government spend

2.25 points per $1 on Qantas services

0.5 points per $1 on Government spend
1 point per $ on all purchases except on Qantas services and Government spend


2 points per $ on Qantas services

0.5 points per $ on Government spend
-20% on all purchases except on Qantas services and Government


-11% on Qantas services


No change on Government spend
Qantas Discovery1 point per $1 on all purchases except on Qantas services and Government spend


2 points per $1 on Qantas services

0.5 points per $1 on Government spend
0.75 points per $ on all purchases except on Qantas services and Government spend

1.75 points per $ on Qantas services

0.5 points per $ on Government spend
-25% on all purchases except on Qantas services and Government


-13% on Qantas services


No change on Government spend
Velocity Platinum1.5 points per $1 on all purchases except on Virgin Australia services and Government spend

2.5 points per $1 on Virgin Australia services

0.5 points per $1 on Government spend
1.25 points per $ on all purchases except on Virgin Australia services and Government spend

2.25 points per $ on Virgin Australia services

0.5 points per $ on Government spend
-17% on all purchases except on Virgin Australia services and Government spend

-10% on Virgin Australia services

No change on Government spend
Velocity Escape1 point per $1 on all purchases except on Virgin Australia services and Government spend

2 points per $1 on Virgin Australia services

0.5 points per $1 on Government spend
0.75 points per $ on all purchases except on Virgin Australia services and Government spend

1.75 points per $ on Virgin Australia services

0.5 points per $ on Government spend
-25% on all purchases except on Virgin Australia services and Government spend

-13% on Virgin Australia services

No change on Government spend
Business

Gold Business
1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Government, Utilities and Insurance spend

0.75 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Government, Utilities and Insurance spend
-25% on all purchases except Government, Utilities and Insurance spend

No change on Government, Utilities and Insurance spend
Business Platinum2 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend
1.125 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1.125 points per $ on all purchases except Government, Utilities and Insurance spend

1.125 points on Utilities and Insurance spend

0.5 points on Government spend
-43.8% on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

+12.5% on all purchases except Government, Utilities and Insurance spend

+125% on Utilities and Insurance spend

No change on Government spend
Business Accelerator no longer available2 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend
1 point per $ on all purchases except Government, Utilities and Insurance spend

1 point on Utilities and Insurance spend

0.5 points on Government spend
-50% on all purchases except Government, Utilities and Insurance spend

+100% on Utilities and Insurance spend

No change on Government spend

Changes to card earn rates: in short

Qantas and Velocity co-branded American Express cards will be less impacted by these changes than their American Express Membership Rewards-earning counterparts.

For example, the Qantas Ultimate or Velocity Platinum cards will earn you 1.25 points per $ on most purchases, versus 1.125 points per $ spent on the Platinum Charge and 1 point per $ on the Explorer.

While the airline co-branded cards will experience only slight reductions in their effective earn rates, the Membership Rewards cards, especially higher-earning variants such as the Platinum and Platinum Edge cards, will experience further reductions. The most notable are restaurant, travel and overseas purchases with the Platinum Charge card, and most purchases through the Platinum Edge.

The effective earn rate on supermarket purchases on the Platinum Edge will be halved from 3 to 1.5 points per $ spent

Therefore, your decision around card choice should be influenced by your spending habits. For example, if you are a Platinum Card Member who predominantly uses your card for purchases at restaurants and overseas, then you may wish to consider switching to an airline co-branded card that will earn you a slightly higher earn rate on these purchases. Point Hacks will publish a number of card specific articles well before the changes take effect to assist our readers in making this decision.

Changes to transfer rates to Membership Rewards program partners

From 15 April 2019, American Express Membership Rewards transfers to most partners are also changing. American Express will also consolidate the different varieties of Membership Rewards points, including Ascent, Ascent Premium and Gateway, into one unified points currency.

American Express Explorer Card Members currently earn Membership Rewards points of the Gateway variety but there will be consolidation into one unified program come April

Here are the figures for Ascent:

PartnerCurrent transfer rateFuture transfer rateChange
Most airline programs1:12:1-50%
Air New Zealand Airpoints100:1200:1-50%
Emirates Skywards1:1 (Ascent Premium)
4:3 (Ascent)
2:1-50%
-34%
Hilton Honors1:12:1-50%
Marriott Rewards-SPG3:23:2No change

and Gateway cards:

PartnerCurrent transfer rateFuture transfer rateChange
Most airline programs4:32:1-34%
Air New Zealand Airpoints400:3200:1-34%
Hilton Honors1:12:1-50%
Marriott Rewards-SPG3:23:2No change

Changes to redemptions: in short

You can see that, with the exception of Marriott Rewards-Starwood Preferred Guest, which had its transfer rate devalued in August, all other partners will have their transfer rates reduced by between one-third and one-half.

Those holding cards that earn into the Ascent variety of Membership Rewards, like Platinum Charge and Platinum Edge Card Members, are harder hit than those who hold Gateway-earning cards, like the Explorer and Essential.

In addition, if you want to use your Membership Rewards points at a fixed value for bookings through American Express Travel, you will see each point worth 0.5 cents instead of the current redemption rate of 1/0.75 cents per point for Ascent/Gateway.

Frequently Asked Questions

Why are these changes occurring?

Due to RBA changes in 2017, the payment landscape changed significantly in Australia, which resulted in a reduction in the merchant fees that were being charged by competitors of American Express. To ensure that American Express remains competitive, they have had to also reduce their merchant fees. This has resulted in more merchants accepting American Express cards.

What should I do if I have a large balance of Membership Rewards points?

Hold off. There is no need to rush as they are giving Card Members plenty of notice, and strategies to maximise your balance will emerge over the coming months.

Will sign-up bonuses be reduced moving forward?

There are no indications that sign-up bonuses will decrease anytime soon, especially given a headline promotion of, for example, 100,000 Membership Rewards points on the American Express Explorer will only transfer to 50,000 airline points moving forward instead of the current 75,000 points.

Are other benefits such as travel credits, lounge access, complimentary flights or insurance changing?

All other benefits are remaining the same, however, some small benefits will be added, which Point Hacks will cover in future articles. Also, Platinum Card Members will see the removal of points caps.

Do these changes affect David Jones Membership Rewards points?

We are not sure yet. We will update this guide if/when we find out anything.

What changes will you see on Point Hacks?

Over the coming weeks and months, we will be updating both our American Express credit card and redemption guides with this new information so that you can stay on top of how to boost your points earn and use your points to their maximum value.

Our advice

On earn

Overall, these changes are negative.

Many of you are likely wondering what you should do with the American Express cards you currently hold. For those who are happily holding Qantas or Velocity co-branded cards, in our opinion, these changes are not significant enough to warrant any real action, given they have come through relatively unscathed.

Airline co-branded cards like the Qantas American Express Ultimate will have higher headline earn rates than Membership Rewards-earning cards but will lock you into one airline currency

However, for those holding American Express Membership Rewards-earning cards, your decision is going to revolve around how much value you place on the flexibility of the American Express Membership Rewards program versus the ability to earn a higher earn rate with an airline co-branded card.

The decision is far from clear and will be determined by individual preference and circumstance. However, a good rule of thumb is: if you value flexibility in choosing which frequent flyer program to transfer your reward points to over points earn, then you should consider holding onto your current card/s. If points earn is your key objective though, then you could consider switching to an airline co-branded card but only if you are willing to commit to earning solely through Qantas or Velocity Frequent Flyer.

On redemption

If you currently have a large balance of Membership Rewards points, you may want to hold off. American Express has given five months’ notice and there may be transfer bonuses introduced in the meantime, so you would not want to miss out on them by speculatively transferring your points out to a partner program/s. Also, there are unconfirmed rumours that Amex may double some/all Card Members’ balances on 15 April so that their current balance does not suffer—stay tuned.

There is no need to do anything about the cards in your wallet right now. If eventually you are considering the cards you have in your wallet in light of these changes, it may be worth giving American Express a call first to see if there is a more appropriate card for you based on your spending patterns.

We will have a number of posts coming out over the next couple of weeks to explore these changes and give more advice but we would love to hear your opinion too! There is some really great advice from other Point Hackers available here.

What is your take on these changes? How will they affect your points-earning and redemption strategy moving into 2019?

Co-written with Daniel Sciberras.
Supplementary images courtesy American Express.

Big news: American Express is adjusting both earn rates and points transfer rates for most cards next year was last modified: December 4th, 2018 by Matt Moffitt