The American Express Membership Rewards program has been on a steady downhill climb. While programs like Chase Ultimate Rewards and Citi ThankYou have added valuable transfer partners, Membership Rewards has either lost them or experienced devaluations-by-association. First, Continental Airlines ceased its transfer partnership in 2011, then Delta began a series of (seemingly never-ending) devaluations, and even Singapore KrisFlyer has jumped on the bandwagon.
Chase is set to overtake American Express in the premium credit card market and Citi is getting competitive with the Prestige card. With a one-per-lifetime credit card bonus policy and a questionable move meant to enhance their Platinum Card, American Express needs to do a better job of catering to what their cardholders really want: Better transfer partners and more relevant card benefits.
Before I get into my grievances, I want to acknowledge that American Express does several things right. For starters, they have some of the best purchase and travel protections of any card issuer. Their Membership Rewards-earning credit cards not only have fairly generous sign-up bonuses (public and targeted), but their category bonuses are also some of the best out there.
Not to mention, the travel perks offered by the Amex Platinum cards pretty much set the trend that Chase and Citi expanded on with their premium credit card line-ups. The problem is that while Chase and Citi have upped the ante, Amex has sat back and done little to stay competitive.
The biggest problem with the Membership Rewards program is the lack of decent transfer partners. To stay competitive, Amex needs to add at least one domestic airline rewards program that isn’t Delta SkyMiles. Since losing Continental Airlines back in 2011 (which was doomed anyway), they have done little to acquire another domestic transfer partner.
Virgin America? The 2:1 transfer ratio is absurd and makes it difficult to justify transferring points in most scenarios. The absolute best thing Amex can do to rectify this situation is to add Alaska Airlines as a transfer partner. Not only are they a growing airline with their acquisition of Virgin America, they also have extensive partnerships with domestic and international carriers, giving their members the opportunity to redeem miles to virtually any place in the world.
Some of you might wonder whether a Membership Rewards – Alaska MileagePlan partnership might lead to a devaluation. Considering Amex’s restrictions around credit card sign-up bonuses and manufactured spending, I don’t think Alaska MileagePlan would be in danger of the same abuses that may have contributed to United and Delta’s devaluations.
When miles are too easily accumulated, airlines tend to devalue them. I don’t see that becoming a major problem for Alaska Airlines, considering Amex’s policies around restricting activities by “gamers.” Including Alaska as a transfer partner would be a huge boost to the Membership Rewards program, giving it a substantial advantage over Citi ThankYou and even Chase Ultimate Rewards.
There are other smaller things Amex can do to make their Membership Rewards program more competitive. For starters, they need to lower the annual fee on their Platinum Card. I suspect by increasing it to $550 Amex was trying to distinguish the card from competitors like the Chase Sapphire Reserve and Citi Prestige.
Not only was it a bad move to increase the annual fee by $100 but a lot of members do not appreciate the addition of $200 annual Uber credit. Or the restrictions around the annual $200 airline fee credit. Amex needs to do away with the requirement of choosing an airline and redeeming credits with that one only. In fact, allow cardholders to redeem their $200 credit towards any travel purchase, like the Chase Sapphire Reserve does.
To improve its Membership Rewards program, American Express needs to include more desirable transfer partners that don’t impose fuel surcharges or high redemption rates. Alaska MileagePlan would be the perfect fit for this.
Doing away with unpopular card features and lowering the annual fee on their premium Platinum card is another way they’ll get back into cardholders’ good graces. That’s my two cents on the topic. What do you think Amex can do to improve their rewards program?