Important Information about using American Express Membership Rewards Points

For many years, American Express (Amex) has dominated the credit card industry due to their customer service, security features and consumer protection policies. In addition, Amex cards brought with them tremendous additional value as cardholders would earn Membership Rewards (MR) points which could be redeemed with a multitude variety of airline and hotel programs. Historically, Amex MR points had been the most used and sought after point programs for frequent flyers and jetsetters due to their redemption flexibility and the ease with which cardholders could transfer them into a multitude of airline and hotel programs.
Recent partnerships by CITI and Chase Bank have cut into Amex’s domination of the point redemption industry and lowered the overall value of the MR program. In fact, in 2011, Chase announced a new rewards transfer partnership with United Airlines, which allowed Chase Sapphire Preferred and Ink Bold cardholders to move their UltimateRewards points to United MileagePlus accounts and subsequently redeem them for flights offered by United or any other Star Alliance member. And in July, CitiBank announced that Citi Thank You Points would now be transferable into eight airlines and hotel programs including the Hilton, EVA and Singapore Airline programs.
And although the subsequent announcement by Amex of its partnership with the exclusive Emirates Airline program was met with acclaim, Amex points have taken a beating and are now longer as valuable as they once were.
An altogether separate reason why Amex points were so beloved by cardholders was due to their ability to be transferred into spouse’s airline accounts and even into airline accounts not associated with the cardholder. So if cardholders had accrued a significant amount of points they had no use for, they could barter those points with friends and family members who had a need for them.
Amex’s terms & conditions had always stated that you can only transfer Membership Rewards points to frequent flyer accounts in your own name. And interestingly enough, although cardholders earned the points fair & square, by virtue of the spending on their credit cards, in their terms and conditions Amex stated quite clearly “Points are not your property. You can’t transfer points to any other person or program account.”
However as we mentioned above, for quite awhile it had been possible to transfer points to others’ frequent flyer programs as well. You would simply link their frequent flyer account to your Membership Rewards account by adding their name and frequent flyer number.
It looks like American Express has finally started enforcing the rules, and Membership Rewards will now only let you transfer points to a frequent flyer account with your name on it (or at least your last name).
If you link an account with a different last name then the transfer will be denied. Now when you try to transfer points you’ll see your name in the drop down menu, with no option to add a different name.
We certainly can’t blame American Express for enforcing the rules they’ve long published, although as we mentioned above one of the main reasons Amex points were so valuable to so many people as it was extremely valuable to be able to:
“Top off” someone else’s frequent flyer account
Transfer points to a frequent flyer account of someone else with status in a program to avoid fees
Transfer points to someone else’s frequent flyer account to extend their mileage expiration
Transfer points into someone else’s account and receive a cash or other benefit from that person.
As a point of comparison, Chase Ultimate Rewards has the following policy when it comes to transferring points to frequent flyer accounts:
“Ultimate Rewards point transfer features are designed to allow our cardmembers to take advantage of the rewards they earn. The features are not intended to allow transfers to third parties other than a spouse or domestic partner of the cardmember. Transfers to unauthorized third parties or any other abuse of the Ultimate Rewards program may result in suspension or termination of the ability to participate in the program and forfeiture of points already earned.”
Amex claims that it is no longer allowing this feature as a security measure, due to some situations where points were transferred from cardholder’s accounts into another’s frequent flyer account without permission, and then there was an effort to try to get them back from the airline
There is still a way for Amex users to transfer Rewards points by adding the account of the primary cardholder or an authorized user. So, if you plan to transfer Amex points to someone other than yourself or a family member with the same last name as you, adding them as an authorized user is the only way you can now do so.
Although it’s more of a hassle, and you only want to do this with your closest family members like your spouse, but it does let you pool points any time, the good news is Amex points are more secure this way, making it less likely someone can transfer points to an unknown account without your knowledge.
Bottom line, with these new changes and the increased competition by other credit card companies, it looks like we may be experiencing the end of the Amex domination era, and the end of a great convenience that’s persisted for many years. But as we always say, the credit card redemption industry is constantly changing and in a stay of perpetual motion. Stay tuned, who knows what the future may bring….
Look to our next posting about how Citi Thank You Points are the up and coming points for redemption and airline travel.