“Is Amex Membership Rewards ‘pay with points’ option a bad deal?”

Over Easter, I will be answering a number of the reader questions that were submitted via this article.  If you didn’t take part this time, don’t worry as I will be re-running this feature in the Summer.  Feel free to expand on or critique my answer using the Comments section below!

Today’s question is from Mr Bridge who asked:

“Is it just me, or is the Amex ‘pay with points’ for travel a really really bad deal?”

The short answer is “Yes”!

Here is the long answer.

American Express Membership Rewards offers a number of ways in which you can redeem your points for cash or something that is nearly as good as cash.  These include gift cards, including Tesco gift cards, as well as the option to book travel using your points or to redeem your points for a statement credit.

In general, these are all a bad deal.

I try to target 1p of value per Membership Rewards point.  Transferring 1:1 into Avios or other airline miles can achieve this, as can hotel redemptions.  This post, for example, shows how Club Carlson redemptions via an Amex MR transfer can be great value.

By comparison, this is what you get for redeeming for cash or near-cash:

Paying with points at travel.americanexpress.co.uk = 0.45p per point, based on dummy reservations I tried

Redeeming points for statement credit = 0.4p per point

Redeeming for Tesco gift cards = 0.5p per point

Redeeming for Amazon gift cards = 0.5p per point

Redeeming for East Coast Trains gift cards (valid for all train operators) = 0.6p per point (special offer)

None of these are great, frankly.  You are better off trying to get some value via the travel partners.

(Ironically, for booking hotels, you will get 0.58p per point by transferring to Avios and using the Avios hotel booking service!  That gets you almost 30% more value than booking via the Amex service and getting 0.45p per point!)

Remember that if you have some Membership Rewards points that you can’t use, you can transfer them to a third party for a flat fee of £15.

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Want to earn more points from credit cards? – April 2024 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers:

SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.