5 things to think about with the 25%-30% Membership Rewards bonus

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A lot of people with an American Express charge card got an email yesterday offering them a conversion bonus if they moved their Membership Rewards points into airline miles.

There seem to be two versions of the email.  The one I got offered a 25% bonus for conversions into British Airways, Virgin Atlantic, Etihad and Finnair.  Reports on Flyertalk mention a 30% version as well.

This is far cry from the 40% and even 100% bonuses seen in the past.  I am in two minds as to whether I should bite.

Amex MR banner

The first thing to remember is that the bonus miles generally post in arrears.   If you are thinking of doing a transfer and then using the Avios points next week, don’t.  Whilst your base Avios will go across quickly, the small print says that the 25% bonus for Avios will be credited by 15th April.  That is a whole two months after the promotion finishes on 15th February!

Secondly, do not rush to open an account with an airline you don’t normally collect with.   We have family in the Middle East and travel down there quite a bit, so an Etihad account MAY be of interest to me.  However, before I opened an account and made a transfer to them, I would want to know:

  • how many miles are needed (vs BA and Virgin) for business class to Abu Dhabi
  • how their fuel surcharges compare
  • how difficult it is to get 4 business class seats on the same flight
  • what their policy is on change fees, cancellation penalties etc

Thirdly, remember that you can get a 60% Avios bonus by opening an International Dollar Card (IDC) with Amex.

An IDC card is a normal Amex card but operating in US$.  They are available to UK residents, but Amex is quite strict on who gets one.  It takes a couple of months to be approved and if you haven’t been a long-term Amex customer (10 years plus) they usually want a written bank reference.

IDC has its own Membership Rewards programme – the catalogue is here.  The work of genius here is that you can ring Amex and transfer your points from the UK MR programme to the IDC programme.  Your balance is automatically increased by the £/$ exchange rate – so at $1.60 to the £, your 100,000 UK MR points will become 160,000.

Now, most redemption partners have worse exchange rates to compensate for this (BA and Virgin are 3:2 compared to 1:1 in the UK scheme, for example).  A few airlines are 1:1 in the IDC MR catalogue, such as FinnairEtihad is 3:2, however, so there is no arbitrage there.

Fourthly, remember that you can buy up to 10,000 Membership Rewards points per year for 1.5p each.

This might be worth it, depending on how you value an Avios.  With the 30% bonus, you’d be getting 13,000 Avios for £150, or 1.15p each.  I am not a buyer at that price, but you might be.  It depends on how you plan to redeem them.  Full details here.

Finally, remember that you can transfer Membership Rewards points to another person for a flat fee of £15.

Again, details here.  If your partner was targetted but you were not, you can transfer your points to him/her and get the bonus that way!

So ….

This might be a good deal for you.  And it might not.  Think it through first.  You have a few weeks to decide.

(To see our complete list of all current credit card bonuses, click here to visit our ‘Credit Cards Update’ page or use the link in the menu bar at the top of the page.)

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Comments

  1. onlysuites says:

    Edit – Ticked the right box. It seems I had chosen not to get marketing emails.

    • You need to tick a box for EACH Amex card you hold. This is a common mistake. People opt in to marketing for the BA card and then think, for example, they will also receive offers relating to their other cards. You won’t. There is a separate opt in form for each card.

  2. The IDC strategy seems amazing when combined with the current Platinum signup bonus. I can see the following plan working really nicely:
    1. get a Platinum card for yourself, collect 52k points (assuming someone refers you)
    2. refer your spouse for another Platinum card (you collect 25k points, they collect 52k)
    3. spouse transfers their points to you for £15 – total 129k points
    4. take out the IDC (Green version is $100/year, MR is free for the first year but then $36 a year afterwards, so you might want to time this properly)
    5. transfer the UK MR points to IDC – total 206,400 points
    6. transfer from IDC to Iberia Plus Avios – total 206,400 points

    The extra Avios resulting from this strategy would be 77,400, at a cost of approximately £75 – which works out to a truly amazing 0.09p per Avios.

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