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Will Amex devalue Membership Rewards – and should you convert Amex, Clubcard, Heathrow or HSBC points to Avios on receipt?

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In the comments to our article yesterday on the changes to certain American Express card sign-up and referral bonuses, a couple of readers questioned the merit of leaving their Membership Rewards points sitting with American Express, rather than moving them.

The logic, according to these people, is that American Express has shown that it is happy to make changes to its products with zero notice.  Could there be a wholesale devaluation of Membership Rewards points overnight?

There are two reasons why we should NOT dismiss this idea out of hand:

Frequent flyer mile redemptions are substantially more expensive for American Express than redeeming for gift cards or statement credit

American Express recently devalued Membership Rewards points in Australia, cutting the airline transfer rate from 1:1 to 2:1 whilst leaving other rewards intact

However, set against this are three other facts:

Changing Membership Rewards is messy, because there are over 10 different cards – plus cards no longer available to new cardholders – which offer it.  This is a mix of personal, small business and corporate cards.  It would be far easier to change the earning rate of Membership Rewards points on individual cards.

As far as I know, none of the personal UK cards earning Membership Rewards points are impacted by the caps on interchange fees, and the corporate and small business cards certainly are not.

Even when a change was made to the Australian scheme, American Express gave four months notice.  Nothing happened overnight.

There is nothing here which causes me substantial concern, to be honest.

Should you convert Membership Rewards points to Avios?

Why ‘convertible’ points are more valuable than all other points

Let’s recap why you should value ‘convertible’ points more highly than other points, and why you definitely should not rush to convert them.

In general, you should value ‘convertible’ points more highly than a point which has no other use.  It is therefore worth choosing ‘convertible’ points when given the choice, and you should keep your points unconverted for as long as possible.

There are a number of ‘convertible’ currencies you will come across.  The main one is American Express Membership Rewards points, but Tesco Clubcard points, Heathrow Rewards points, HSBC Premier Mastercard points and most hotel scheme points are also, to a lesser or greater extent, convertible.

There is one thing you need to remember

This is the key point I want to make:

If you have 1 American Express Membership Rewards point, it has more value than 1 Avios point even though the former converts into the latter

There are various reasons for this:

An Amex point will hold its value better.   If you transfer them to Avios and Avios devalues, you have lost out – you can’t convert them back.  Keeping them as Amex points means that you have alternative options.

American Express or British Airways may decide to run a conversion bonus at some point for moving your points across to Avios.  If this happened, 1 Amex point would be worth more than 1 Avios.  (The possibility of a conversion bonus is why I NEVER recommend auto-converting Tesco points to Avios, even if you are 100% sure that is what you will spend them on.)  Whilst I admit that Amex and Clubcard bonuses are thin on the ground, Heathrow Rewards and HSBC Premier HAVE been running them.

Amex may run a great promotion with another partner which allows you to get far more value from a point than you would get from 1 Avios.

Your personal priorities may change and you may decide that you would prefer to redeem your Amex points for something else other than Avios.  By not converting, you retain the flexibility.  Later this year for example, you should be able to redeem Virgin Flying Club miles for Air France and KLM flights which may make it more relevant for you.  On the other hand, the recent spike in surcharges on Upper Class Virgin Atlantic flights to the US means you may be less keen on that scheme.

I have written on HFP before that I do not convert my Tesco Clubcard points into Avios.  For years I used them for Safestore as we have some furniture with them and Safestore accepted Clubcard vouchers at 3 x face value.  That deal has ended but I now redeem for Uber credit at 3 x face value.  My choice is to use 100 Clubcard points for either £3 off my Uber bills or receive 240 Avios.  If I took Avios I would be valuing them at 1.25p each – and I don’t.

There is another reason why keeping Amex and Tesco points in their ‘original’ form as long as possible makes sense.  Both convert to Avios points within 24 hours of a transfer being initiated.  If a reward seat opened up and I didn’t have enough Avios, I would be confident enough to assume that the seat would still be there tomorrow morning when I could have converted points across.

Some American Express Membership Rewards transfers are INSTANT – Virgin, Delta and Emirates – as long as you have already linked your accounts.  There is absolutely no reason whatsoever, except for a conversion bonus, why you should move points to those airlines before you need them.

Some transfers, admittedly, are not instant.  Slow transfers are one reason why you may want to move across hotel points before you need them.  The last time I moved some Starwood (now Marriott Bonvoy) points to Lufthansa it took 28 days!  I was lucky that the redemption I wanted was still available.  You shouldn’t rely on a hotel scheme moving your points across to British Airways in a hurry.  If you will be totally reliant on a hotel transfer to make a redemption you have planned, you may want to move them in advance.

In general, however, if you want to maximise the value of your points then you want to maximise their flexibility.  For ‘convertible’ currencies, this means keeping them in their original form as long as possible.

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Comments

  1. I guess an increase in card membership fees is due.

    • An increase in fees would be, in my opinion “welcomed” – Provided the perks are adjusted to match! I would happily pay £550 for my plat if airline credit, Uber credit etc was added like in the US. Or as someone mentioned on another article, they have spend related bonuses – Spend £15K in the card year and get 10K points for example(like gold card) but make it tiers so high spend gains you more and more… Just my opinion anyway

      • I suspect Platinum will increase to 550 GBP…. adjusting not to the US market, but to European market. I know you lot like to compare to the US, but so far the UK has been an outlier compared to the European market. The recent changes demonstrates that now Amex UK is adjusting to Amex EU…….

        • The German plat card is cheaper and offers 200 euro travel credit. So other EU countries have these benefits so comparison to the US or EU really has no difference as all countries are completely different.

      • Not sure on the Platinum card. Everyone’s circumstances are different and for us we’re not got much use for Priority Pass, the insurance, we use taxis or hotel limos so don’t need car hire. What would make my ears perk up is more hotel transfer partners such as Hyatt and Shangri La, points transfer bonus’s and earning 2 points on travel like on gold – on rose gold metal….

    • BillyBass says:

      I agree. Price will increase in line with the continent. But there won’t be any new perks. Which I’m sure the same old H4Pers will spin as being brilliant.

    • I would consider an increase a kick in the teeth after the reduction in sign up and referral bonuses. Unless they have some VERY good perks lined up, lined GUARANTEED lounge access, available to book in advance, free (PP is pretty useless to me at the moment).

  2. Harry Hv says:

    Australia went through a devaluation of MR yesterday but we did get 6 months notice. Instead of earning 1 MR point (= 1 mile) per dollar spent you now earn 0.75 MR points. In UK terms that’s about 1 MR point (mile) per 66p spent.

    But to try to bamboozle the clientele Amex has changed the value of its points to 1/2 a mile and offers double the points, for now, I’d call their new MR points “halfpoints”. Also tax & govt payments have reduced earning, also phone bills, insurance etc.

    Bottom line is, not worth keeping, I cancelled my Amex Gold card yesterday.

    • guesswho2000 says:

      Depends on the card, most cards actually increased the earn on ATO and other gov payments. Explorer always paid out on utilities too, no change there.

  3. Alison says:

    I’m generally a fan of the HSBC product (great Mastercard earning rate, lounge perks) but there is definitely room for systems improvement.
    I requested to convert 360,000 HSBC points to 180,000 Avios almost 4 weeks ago and still haven’t got all of them. Here are the reasons:
    – the official turnaround time for conversion to Avios is 14 days. In my experience the Avios arrive in less than 5 days but it can be an anxious wait for a low availability redemption. I waited more than 14 days before calling HSBC to follow up
    – I learned that there’s a known systems glitch at the HSBC end which reduces any request to convert to more than 99,999 Avios in one transaction to a number which is just 1/10 of the amount requested (the system just leaves off the last digit!). There is no notice of this on the HSBC website, no automatically generated email recording the request and no notice of the failure to process the full transaction. I didn’t know there was any problem until I called HSBC.
    – there is no “statement” function available on the HSBC website to keep an eye on what’s going on

    • Nate1309 says:

      Is the 40000 points for £12000 spend an annual thing? or just in the first year? I have been toying with the idea of HSBC premier account for a while but it doesnt seem to come with anywhere near the benefits of my RBS account.

      • Just the first year.

      • Bonglim says:

        It is worth noting the the hsbc premier current account is free, and that is what gives you the (very good) travel insurance.
        I think the excellent perks of the RBS account come with a fee.

        Then the hsbc credit card is separate.

  4. Cookoovaya says:

    Are British Airways cards next?

    • Only time will tell… but you’d be right to think within the year some changes would be a foot

  5. I moved my MR points yesterday in light of recent events to Krisflyer, they were going to be moved anyway, but as Rob suggested I didn’t want to miss out on any new worthwhile redemption.
    I also noticed I missed the cut off date for Krisflyer redemptions using the chart before devaluation by one day! This means I don’t have enough Krisflyer points for what I wanted…will have to probably move Marriott points unless I can build up a 7k MR balance.

    I am still contemplating the green card, I have plat, if I get the gree, close plat and then upgrade to plat, is this route a little risky? Spend can be made fairly quickly I think because of house move.

    Thanks

  6. An Amex devaluation and an Avios devaluation. If the majority of people earn Avois from credit card spend which is now being cut how can Avios then increase points redemptions. People aren’t going to earn the points, It doesn’t make sense. British Airways are already receiving a devaluation of their currency curtsey of AMEX!

    • Quite – I don’t see the point of having a new long term collecting strategy at this stage as who knows where we’ll be in another 12-24 months. For now I’m going to dust off my LLoyds Amex (if I can remember which drawer I put it in!) so I can earn a last upgrade voucher, given that 2 4 1’s will probably be harder to come by in future. Going to cancel my BA card as soon as I’ve redeemed my current 2 4 1 in the next few weeks and just be a supplementary holder on my OH’s. Once he’s triggered and used his 2 4 1 in the autumn we’ll consider whether he should hold onto it, downgrade, or cancel altogether. The only card I’m going to hold onto for the moment is the SPG as I have a specific redemption in mind. Non-Amex spend will be split between the Hilton visa and the Lloyds Mastercard.

  7. Quick question, and apologies as I am sure this has been asked before:

    I am thinking of cancelling my AMEX BA Premium Plus Card – does the companion voucher I already have for spending £10k+ in a year and which is showing on my BAEC account for use by Nov 2021, become invalidated?

    • It’s never happened so far, however BA and Amex could obviously decide to start enforcing this and making life difficult if they felt like it.

    • Amex will tell you that it does, they are not being truthful.

  8. Daniel says:

    How are Amex tracking those that have already held the cards and what bonuses they should be due, etc? I only ask because I cancelled my last Amex Gold in October last year. Last week (fortunately before the latest cut to referral bonuses!) my wife referred me back for the card and already received her 9K MR points.

    I’ve now received my new card and upon signing in to my online account it is offering me the usual 20K MR points if I spent £2K in the next 3 months. If I understand the new rules, I shouldn’t qualify for the sign up bonus. But surely this would be false advertising if they don’t honour the points that they’re offering in my online account?

    • I think someone else found this. I would suggest taking a screenshot or saving the page with the details on and waiting to see if you get the bonus. If you do, all well and good, if you don’t you may well have a case to challenge Amex. I wouldn’t highlight it until you know either way, if you get my drift.

    • Not really, because you didn’t sign up for the card under those conditions. However, others have reported seeing the same thing – no-one has yet reported whether they got the bonus though!

      • Lady London says:

        Could be assumed as a new offer though. How would you know any better? I’d do what @Anna says and screenshot thr offer. Including date and time assuming they are showung at the bottom edge of the screen. Ensure also to screenshot same of any terms and conditions it links to.

        I think you should get thé bonus if you make sure to fulfil its conditions. I would take it all the way if they tried to deny after i have done the spend and met thé conditions.

        Oh and meanwhile? Don’t call them, at all, about this.

    • John BHOY says:

      I applied for the bapp card at 7:30 the morning after Amex changed from 6 months to 24 months because I was 6 months and 2 days since I last cancelled my bapp card. I got the 26000 bonus and have already received the points in to my ba exec account.

  9. George says:

    OT (ish): Just upgraded Gold Charge to Plat Charge – will it be possible to downgrade back to Gold Charge? I’m guessing probably not…..

  10. OT (kind of):
    The following is a public page on the Amex website which appears on Google searches – https://www.americanexpress.com/uk/benefits/supplementary-cards/index.html

    It makes no mention of having to apply for the supp card post the actual application however Amex are telling me I’m not eligible for the Supp card MR bonus as 1) it is a private targeted offer and 2) I applied for the supp card during the application.
    Is this right and is it worth a complaint to try and get the bonus? As I say, the terms of the bonus do not say you aren’t eligible if adding the supp card during application.

    • A more helpful CSA might have told you to cancel the supp card when it arrives and then re-apply using the link. If they treat it as a second supp card and apply a charge you can call and get the charge refunded.

    • Amex is totally correct that you do NOT get the bonus if you add the supp during the initial application. That’s why you didn’t get it. It isn’t a targeted offer.

      • But my argument is that I saw that page prior to applying and assumed, as there was nothing to state otherwise, that the adding of the supp card during application would remove eligibility for the bonus?

        I was surprised to not receive anything given the terms do not say this…

    • Charlieface says:

      It’s defo not targeted, it was on the Amex homepage recently.

    • TGLoyalty says:

      Add a second supp and you will get the points. If it’s the Plat you have a free 2nd gold card triggers the bonus

  11. Jonathan says:

    What do people think the best route is – convert 180k MR points to an existing relatively healthy pool of around 360k of Marriott points or, start from scratch and diversify into Hilton points? No redemption plans as yet. I’d prefer Jumeirah Sirius points because we visit Dubai often but the ICC card seems a too complicated route.

    • Jonathan says:

      It serves a purpose Harry – relatively short overnight flight, guaranteed sun, child friendly, good food and friends live out there. Admittedly less appealing now Virgin have stopped flying there.

      • Shoestring says:

        yep I know it and no criticism intended for taking that option.

        I won’t spend a nanosecond of my life there ever again, though.

      • The same is true of a large number of places around the Med which have much more to offer besides, and can be reached in 2-4h for pocket money.

        • Lady London says:

          Yes but some people would saylots of those places have riff-raff.

          You don’t get riff-raff in Dubai- or only riff-raff of a couple of types that are particularly well-heeled.

          If you have enough money and children I can well see the appeal of Dubai. It;s just that much easier to choose if you want the upmarket version of the oldfashioned Mediterranean break. Personally I’m with Shoestring. I can’t stand the place.

        • You can’t get the worst room in Madinat Jumeirah for under £650 including taxes during October half term. No riff-raff there (except us, on Amex points).

          Weirdly the crowd is driven by the amenities in my experience. For example, Jumeirah Beach Hotel is as expensive as Madinat Jumeirah but has – or had, not sure if it survived the refurb, a British pub in it. It always seemed to attract the ‘£70,000 London plumber’ sort of crowd rather the ‘£70,000 London accountant’ crowd who preferred Madinat next door.

        • Lady London says:

          £70_000 plumber? I rest my case.

          The other riff raff are the blingy sort and it would be rude to comment.

        • To be fair, £70k is low for a plumber in London. This guy earns £210,000 per year and is just a standard Pimlico Plumbers operative, albeit doing longer hours than most – https://www.dailymail.co.uk/news/article-5348557/Plumber-earns-210-000-doesnt-work-weekends.html

    • Mikeact says:

      Totally agree. I can never understand why it is so apparently popular when there are far better places to go to in the World.

      • Jonathan says:

        But not for flight time, time zone, weather, kids etc.

      • KBuffett says:

        The hotels and facilities are far better than anywhere across Europe and there is plenty of choice and capacity even at peak times for a reasonable price. The quality of food is also very good.

        • Dubai food good?? Arabic food perhaps, non-Arabic food only good in high-end restaurants for which you’re paying double the price it costs elsewhere.

        • Maybe for ‘bog standard’s 4* and 5* chain hotels but not for really classy places, do not recall them featuring in top hotel surveys.

  12. Ricatti says:

    The best strategy remains earn and burn.

    It is even more profitable to disconnect from AMEX, wait two years and re-subscribe, rather than spending on the usual £1 = 1 MR point.

    Fee increase £450 to £550 will definitely be the next step, without any noticeable added benefit (like an airline status).

  13. Howard says:

    Re referrals. How long does it normally take to get the points?

    I ask this as I recently did a referral to my wife….New account accepted quickly….from previous experience my points are allocated very quickly…..Not this time?

    • Amex has periods where nothing posts for a week or so and then a big pile go on at once. I wouldn’t fuss until you’ve hit the 2 week mark from when her card arrived.

  14. Howard says:

    Rob

    Thanks

    I have not done this before but I called to cancel my Amex Plat card.. They asked for reasons….I told them the reductions recently announced plus referral cut from 18000 to 12000….They never even tried to offer me anything to stay…just said sorry to lose a good customer of 14 years standing….

    All they said was move your points before cancelling….

    To me it looks like they are not bothered about keeping existing customers….

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