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Maximize Your American Express Points

Oct 22, 2024

How to Redeem American Express Points Effectively

Introduction

  • Earning Amex points is easy, but redeeming them can be confusing.
  • Amex offers many redemption options, some devalue points, others increase their value.
  • This guide explains the best and worst ways to redeem Amex points.

Redeeming for Statement Credit

  • Statement Credit Conversion: 10,000 points = $60, or 0.6 cents per point.
  • Recommendation: Avoid using points for statement credit as it devalues them.

Cover Your Card Charges

  • Allows erasure of specific charges on your statement.
  • Same conversion rate as statement credit (0.6 cents per point).
  • Example: Redeeming $170 worth of points for a $12 charge is not efficient.

Go Shopping Tab

  • Redeeming points for products often results in poor value.
  • Example: 130,000 points for a $650 golf club, whereas points could be worth $1,300 elsewhere.
  • Point value: 0.5 cents per point.

Pay with Points at Checkout

  • Available on sites like Amazon and via PayPal.
  • Example: Using 2,570 points for a $17.99 purchase results in 0.7 cents per point.
  • Avoid if conversion is below 1 cent per point.

Redeeming for Gift Cards

  • Values range from 0.5 to 1 cent per point.
  • Example: $25 Home Depot gift card costs 2,500 points (1 cent per point).
  • Generally, not the best use of points.

Special Card Options

  • Some cards like Charles Schwab Amex Platinum offer a better rate (1.1 cents per point) for financial account redemptions.
  • Consider keeping investments separate from credit card strategies.

Redeeming Points for Travel

  • Two Options:
    1. Inside Amex Portal: Usually 0.7 to 1 cent per point.
    2. Transferring to Partners: Better value, often 2-3 cents per point.

Tips for Travel Redemption

  1. Transfer points only after confirming award availability.
  2. Take advantage of transfer bonuses.
  3. Use points in the near term.
  4. Value is subjective; choose what benefits you the most.

Examples of Travel Redemption

  • Hotel Example: Ritz Carlton bookings show better value through Marriott transfers.
  • Flight Example: Philadelphia to London through British Airways; transferring to Cathay Pacific yields better value (4.84 cents per point).
  • Use tools like seats. Aero to find award availability.

Conclusion

  • Always consider opportunity costs and aim for maximum value.
  • Focus on travel redemptions for better value.
  • Avoid cash-back and other low-value options.

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