Why You Should Avoid American Express Use Points for Purchases

How Amex Wants You to Lose Big Time

First Published: ADawnJournal.com Published Date : September 27, 2016

American Express Canada recently launched a new option, letting card members fall for instant gratification by letting them redeem daily purchases for small amounts. According to Amex, this option will provide ultimate flexibility and make daily life seamless. However, what Amex is not saying is that clients lose big time when they redeem points for daily purchases instead of converting to miles.

American Express points provide the best bang for your buck when you transfer them to airline miles, such as with Aeroplan or Avios. The transfer rate is 1:1, meaning you will receive 1 airline mile for each point. Now, if you are knowledgeable about airline rewards programs you should be easily able to extract 5 to 6 percent return per dollar flying business or first class. Sometimes the return can be astronomically high like 30 percent flying business or first class on airline miles. If you fly economy class using miles, your extraction rate will be a poor 1 to 2 percent.

So what’s the rate you are getting from American Express if you redeem points for purchases? Not even 1 percent. On the Amex Gold Card, the redemption rate is $7 for redeeming 1000 points. What this means is you get $0.007 per point, which is even less than 1 cent per point, making it a 0.7 percent return – not even 1 percent return. If you use Amex TripFlex option to redeem points for travel, you will get a 1 percent return or 1000 points for $10.

The best value Amex rewards points generate is when you redeem them to convert into miles. Of course you need to know how airline miles work and if you don’t want to follow that path, you should not have this card in the first place. There are other credit cards that offer higher return for redeeming points for groceries and other purchases. There is no point in having American Express credit cards, paying hefty annual fees and redeeming points at such a horribly low rate. Also don’t forget that although American Express is charging a hefty $150 on its popular card Amex Gold Rewards, it’s not providing many common benefits that another premium card would provide for a $120 annual fee such as Trip Cancellation Insurance, Concierge Service, etc.

MBNA Rewards World Elite MasterCard Devalues

Brutal Devaluation Coming to MBNA Rewards WE

A popular MBNA cash back credit card is going through a two-fold massive devaluation. Not only is the annual fee is increasing, but also its point redemption rates are being axed by TD.

Starting September 6, 2018, MBNA Rewards WE’s annual fee will be $120, up from $89. If that’s not bad enough, MBNA is decreasing the rewards rate of return on this card from a flat 2 percent to 1.67 percent starting February 1, 2019.

Currently each 100 points generates $1 cash back, giving the card a 2 percent flat return on all purchases because it earns 2 points per dollar spent. After the devaluation to generate $1 you would require 120 points.

However, for travel redemptions only, the devaluation does not kick in because you will still get 2 percent return or $1 for in that category.

Most MBNA Rewards cardholders use this card for the cash back feature, so after devaluation MBNA will lose a lot of its clients. MBNA is aware of that because it’s lowering its minimum points requirement to redeem points from 5,000 to 1,000 from September 1, 2018 to January 31, 2019.

Even if you use this card solely for travel redemptions, you should take a hard look after the devaluation because of the annual fee increase and this card has minimal insurances.

There are other cash back credit cards available that can replace MBNA Rewards World Elite MasterCard and even provides better benefits. I have discussed these cards and the MBNA devaluation in this video: Brutal Devaluation | MBNA Rewards World Elite MasterCard |

Since TD took over MBNA, they keep slashing rewards and benefits for most of that MBNA cards one by one, even including TD’s own travel rewards cards.

Because there are better options available, always look for something better to get the most out of your credit cards.

8 Free Lounge Passes from BMO World Elite MasterCard

8 Free Lounge Passes This Year

The BMO World Elite MasterCard is changing their lounge access program from Priority Pass to LoungeKey. I wrote about this here a few days ago: BMO  World Elite Switching Lounge Program. Today, I will provide you with further details on how you have 8 free lounge passes this year.

The lounge program change takes place on August 8, 2018. Until then, you will have 4 free passes from Priority Pass, which are given each year. Once the switch takes place, meaning after August 4, 2018, BMO will throw in another 4 free lounge passes for the rest of the months until December 31, 2018.

What it means that you will get these 4 extra free lounge passes from LoungeKey in addition to the free lounge passes you had from Priority Pass from Jan 1 to Aug 8. It is recommended you finish using up Priority Pass passes before August 8 because the Priority Pass program (through BMO WE MasterCard) will no longer be valid after Aug 8.

And then finish using up the other 4 LoungeKey passes by December 31. Because the LoungeKey program will reset on Jan 1 with 4 new free passes and each subsequent year, there will be 4 free passes from LoungeKey.

If you are doing a lot of traveling this year, these 8 passes will come in handy. For myself, most of these passes will be wasted because my trip to Australia, New Zealand, Malaysia, and Singapore starts in late November and I will get free lounge access from my business class tickets.

BMO definitely deserves credit for giving 4 extra passes, as they had the option to not provide any free LoungeKey passes for the rest of 2018.

Watch my video on this here:  BMO World Elite MasterCard Gives 8 Free Lounge Passes This Year  and subscribe to my YouTube channel, as I bring you travel and credit card videos to enhance your travel experiences.

Brim World Elite Increases Annual Fee Even Before Issuing Credit Cards

Brim World Elite MasterCard Annual Fee Goes Up

Brim credit cards created heavy buzz and brought a breath of fresh air on the Canadian credit card market because of its unheard of features such as no foreign transaction fee, Lounge Key membership, Boingo global Wi-Fi access, plus much more in Canada.

However, the anticipation and love are gone because Brim World Elite MasterCard has increased its annual fee from $120 to $199 even before reaching its customers.

There is no justification to pay $199 when you can pay $140 (Scotia Passport Visa Infinite) or $150 (BMO World Elite MasterCard) and get a lot more.

For example, Brim WE MasterCard provides only LoungeKey lounge membership, not free passes. The 2 other competitors’ credit cards provide 6 and 4 free lounge passes. Their insurance benefits are comparable or even better then Brim’s WE MasterCard. Scotia Passport Visa Infinite also provides zero foreign currency transaction fees.

The only thing the Scotia and BMO credit cards (those mentioned above) are missing is the Boingo global Wi-Fi access. However, that does not justify the higher annual fee. You can get the same Boingo global Wi-Fi access by just having the free version of Brim credit card.

I called up Brim to hear their version of the story behind the annual fee increase. The rep was friendly but failed to provide strong reasons justifying the increase. You can listen in the conversation here in the video:

What's the Justification Behind Skyrocketing Annual Fee

I don’t see any point in keeping my Brim WE MasterCard beyond its first year. I will switch to the regular free version and still will have access to free Boingo global Wi-Fi. For free lounge access, I am happy with my Scotia Passport Visa Infinite and BMO World Elite MasterCard. Also, Scotia Passport offers no zero foreign transaction fee as well.

BMO World Elite Switches from Priority Pass to LoungeKey Program

BMO World Elite Abandons Priority Pass Lounge Program

Starting August 8, 2018, BMO will replace their Priority Pass lounge access program with the LoungeKey program. Although both programs are owned by the same company, they work slightly differently.

In terms of lounge access, Priority Pass offers more lounges across the globe. Priority Pass has access to 1200 lounges at 500 airports. LoungeKey has access to 850 lounges at 400 airports.

For LoungeKey, you will not need to carry a separate membership card. The credit card that offers lounge access is enough to access a lounge. All do have to do is show your credit card. You do need to signup online to enroll prior to accessing lounges, of course.

The BMO World Elite MasterCard will still offer 4 free passes per year, so it’s not reducing the free passes it used to offer with Priority Pass.

One major difference between the Priority Pass and LoungeKey programs is that you can buy Priority Pass membership if your credit card does not provide one. However, LoungeKey does not have any membership plans to buy and is only accessible via credit card offers.

So is this change of lounge membership a devaluation? I wouldn’t say it’s a big devaluation, but it is a slight devaluation because you will have slightly less lounges to access.

Keep in mind that since the Scotia Passport Visa Infinite came out, BMO World Elite lost its luster because Scotia Passport provides more (6) lounge passes via the Priority Pass program, charges less annual fee ($150 vs $140), and also has zero foreign currency transaction fee. Read more on Scotia by clicking the link above.

Also, you can watch this article on YouTube Here:

BMO World Elite Leaves Priority Pass Lounge Program