/Decide before Friday: transfer your Amex points to Velocity or Hilton Honors (or wait)?

Decide before Friday: transfer your Amex points to Velocity or Hilton Honors (or wait)?

You’ve got three days to make a decision—transfer your points out or wait for a bonus offered for another program like KrisFlyer?

Current transfer bonuses

Velocity

American Express is offering a 15-25% bonus points for transferring Membership Rewards points to Velocity Frequent Flyer until 15 March.

The tiered bonus is based on the number of Membership Rewards points that you transfer:

In addition, Platinum Charge and Centurion Card Members are offered a sweetened deal which also includes an instant upgrade to Velocity Gold or Platinum status when they transfer at either of the top two tiers:

Note that the transfer of points must occur in one transaction in order to receive the respective bonus points tier and if applicable, the Velocity status upgrade.

Therefore, if you transfer 100,000 Membership Rewards points on one day, and then a further 240,000 points on a subsequent day, you will only receive 15% bonus for both transactions. So make sure to just transfer 340,000 on the one day to receive the 20% bonus and, if applicable, Velocity Gold status.

Note also that if you are already a Gold or Platinum status holder, then your status will be retained for a further 12 months from 15 March, meaning you will hold onto your current status until mid-March 2020. This will be beneficial for those who are not looking to re-qualify for either Gold or Platinum, and their review date is coming up soon.

Virgin Gold and Platinum status gets you complimentary Virgin lounge access

For those who have just retained Gold or Platinum though, this is not much of a benefit. It is a shame that the upgrade in this scenario is effective from the promotion period end and not from your review date.

Reports have indicated that the status upgrade occurs fairly instantly. However, note that the terms and conditions clearly state that the upgrade is effective from promotion end date, which is 15 March. So don’t be too concerned if your Velocity status is not immediate from the date you transfer your Membership Rewards points.

Should you take advantage of this transfer bonus?

It is no coincidence that this offer has come up prior to Amex changes in April. In fact, the above advertisement makes this pretty clear! Given this, Card Members should seriously consider taking the plunge.

One benefit of transferring to Velocity Frequent Flyer is that your points don’t expire as long as you have any form of earning or redemption activity within a 24-month period.

So if you don’t have any plans to use your points over the next number of years, transferring your points in Velocity could be a good option. And your points also won’t be at risk of expiring, which is the case after three years if you transfer your points to KrisFlyer or Asia Miles, for example.

Will there be transfer bonuses to KrisFlyer or Asia Miles offered? I don’t know. However, it wouldn’t surprise me if Amex did offer sweeteners for transfers to one or both of these programs in the final month before the devaluation.

Having said that, if you have a use for Velocity Points and want to safeguard your points there, then I think that is also a great option. Your decision really depends on which program you are most familiar with and can get the best value out of for your individual travel patterns.

Hilton Honors

Also until 15 March, you’ll receive a 50% bonus when you transfer your Membership Rewards Points to your Hilton Honors. Is it worth it? Not for most people.

I value Hilton Honors points at only 0.5 cents each. Given that Amex points transfer to Hilton at 1:1 for both the Gateway and Ascent varieties (with that rate halving on 15 April), that means you’ll only get 0.75c value from each Amex point you transfer. I value Amex points at 1.5c and 1.9c for Gateway and Ascent varieties, respectively, so that is a poor deal.

So who should take advantage of this transfer bonus? Probably only those people who are familiar with the Hilton Honors program and plan to make bookings at Hilton properties now and into the future.

You can read more about the Hilton Honors program here.


In this guide

This master guide outlines the changes, gives our analysis and will be updated moving forward as we find out new information.

Here is American Express’ official page on the changes.

Why are these changes occurring?

These changes are in response to the challenges to merchants following the Reserve Bank of Australia capping the fees credit card providers can charge merchants. American Express is following most other providers (like Westpac) in devaluing its Membership Rewards program.

As we said back in 2016:

These new laws will dramatically reduce the amount of money banks get to fund rewards programs.

And they have. While American Express was not specifically impacted by the RBA changes, the market has shifted. As such, they have made a decision to reduce their merchant fees in order to continue their efforts in driving greater acceptance of their cards.

Here is our summary of the changes coming to American Express cards from 15 April 2019.

Changes to earn and effective earn rates

The changes to the earn rates for all American Express personal cards are shown below but note that the more important changes are those to effective earn rates, which follows this first (quite comprehensive) table.

  Current earn rate Future earn rate Change
Explorer

Business Explorer

2 points per $ on all purchases except Government spend

0.5 points per $ on Government spend

2 points per $ on all purchases except Government spend

1 point per $ on Government spend

No change on all purchases except Government spend

+100% on Government spend

Essential 1 point per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend

1.25 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

1 point per $ on Government spend

1.25 points per $ on Utilities, Insurance and Telecommunications spend

+25% on all purchases except Government, Utilities, Insurance and Telecommunications spend

+100% on Government spend

+150% on Utilities, Insurance and Telecommunications spend

Platinum Edge 3 points per $ on purchases at supermarkets

2 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases

3 points per $ on purchases at supermarkets

3 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases

No change on purchases at supermarkets

+50% on purchases at fuel outlets

No change all other purchases except Government, Utilities, Insurance and Telecommunications spend

No change on Government, Utilities, Insurance and Telecommunications spend

No change on overseas purchases

Platinum Charge 3 points per $ on purchases at restaurants

2 points per $ on travel and overseas purchases

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend

2.25 points per $ on purchases at restaurants

2.25 points per $ on travel and overseas purchases

2.25 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

1 point per $ on Government spend

2.25 point per $ on Utilities, Insurance and Telecommunications spend

-25% on purchases at restaurants

+13% on travel and overseas purchases

+125% on all purchases except Government, Utilities, Insurance and Telecommunications spend

+100% on Government spend

+350% on Utilities, Insurance and Telecommunications spend

Qantas Ultimate 1.5 points per $ on all purchases except on Qantas services and Government spend

2.5 points per $ on Qantas services

0.5 points per $ on Government spend

1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend

-17% on all purchases except on Qantas services and Government

-10% on Qantas services

No change on Government spend

Qantas Premium 1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend

1 point per $ on all purchases except on Qantas services and Government
spend

2 points per $ on Qantas services

0.5 points per $ on Government spend

-20% on all purchases except on Qantas services and Government

-11% on Qantas services

No change on Government spend

Qantas Discovery 1 point per $ on all purchases except on Qantas services and Government spend

2 points per $ on Qantas services

0.5 points per $ on Government spend

0.75 points per $ on all purchases except on Qantas services and Government spend

1.75 points per $ on Qantas services

0.5 points per $ on Government spend

-25% on all purchases except on Qantas services and Government

-13% on Qantas services

No change on Government spend

Velocity Platinum 1.5 points per $ on all purchases except on Virgin Australia services and Government spend

2.5 points per $ on Virgin Australia services

0.5 points per $ on Government spend

1.25 points per $ on all purchases except on Virgin Australia services and Government spend

2.25 points per $ on Virgin Australia services

0.5 points per $ on Government spend

-17% on all purchases except on Virgin Australia services and Government spend

-10% on Virgin Australia services

No change on Government spend

Velocity Escape 1 point per $ on all purchases except on Virgin Australia services and Government spend

2 points per $ on Virgin Australia services

0.5 points per $ on Government spend

0.75 points per $ on all purchases except on Virgin Australia services and Government spend

1.75 points per $ on Virgin Australia services

0.5 points per $ on Government spend

-25% on all purchases except on Virgin Australia services and Government spend

-13% on Virgin Australia services

No change on Government spend

Business

Gold Business

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Government, Utilities and Insurance spend

1.5 points per $ on all purchases except Government, Utilities and Insurance spend

1 point on Government, Utilities and Insurance spend

+50% on all purchases except Government, Utilities and Insurance spend

+100% on Government, Utilities and Insurance spend

Business Platinum 2 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend

2.25 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

2.25 points per $ on all purchases except Government, Utilities and Insurance spend

2.25 points on Utilities and Insurance spend

1 point on Government spend

+12.5% on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

+125% on all purchases except Government, Utilities and Insurance spend

+350% on Utilities and Insurance spend

+100% on Government spend

Business Accelerator no longer available 2 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend

2 points per $ on all purchases except Government, Utilities and Insurance spend

2 points on Utilities and Insurance spend

1 point on Government spend

No change on all purchases except Government, Utilities and Insurance spend

+300% on Utilities and Insurance spend

+100% on Government spend

The new effective earn rates are shown below. Note that these are based on transfers to Velocity, KrisFlyer and Asia Miles.

  Current effective earn rate Future effective earn rate Change
Explorer

Business Explorer

1.5 points per $ on all purchases except Government spend

0.375 points per $ on Government spend

1 point per $ on all purchases except Government spend

0.5 points per $ on Government spend

-33% on all purchases except Government spend

+33% on Government spend

Essential 0.75 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.375 points per $ on Government spend

0.375 points per $ on Utilities, Insurance and Telecommunications spend

0.625 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.625 points per $ on Utilities, Insurance and Telecommunications spend

-17% on all purchases except Government, Utilities, Insurance and Telecommunications spend

+33% on Government spend

+67% on Utilities, Insurance and Telecommunications spend

Platinum Edge 3 points per $ on purchases at supermarkets

2 points per $ on purchases at fuel outlets

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government, Utilities, Insurance and Telecommunications spend

1 point per $ on overseas purchases

1.5 points per $ on purchases at supermarkets

1.5 points per $ on purchases at fuel outlets

0.5 points per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.25 points per $ on Government, Utilities, Insurance and Telecommunications spend

0.5 point per $ on overseas purchases

-50% on purchases at supermarkets

-25% on purchases at fuel outlets

-50% all other purchases except Government, Utilities, Insurance and Telecommunications spend

-50% on Government, Utilities, Insurance and Telecommunications spend

-50% on overseas purchases

Platinum Charge 3 points per $ on purchases at restaurants

2 points per $ on travel and overseas purchases

1 point per $ on all other purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 points per $ on Government spend

0.5 points per $ on Utilities, Insurance and Telecommunications spend

1.125 points per $ on purchases at restaurants

1.125 points per $ on travel and overseas purchases

1.125 points per $ on all purchases except Government, Utilities, Insurance and Telecommunications spend

0.5 point per $ on Government spend

1.25 point per $ on Utilities, Insurance and Telecommunications spend

-63% on purchases at restaurants

-44% on travel and overseas purchases

+13% on all purchases except Government, Utilities, Insurance and Telecommunications spend

No change on Government spend

+150% on Utilities, Insurance and Telecommunications spend

Qantas Ultimate 1.5 points per $1 on all purchases except on Qantas services and Government spend

2.5 points per $1 on Qantas services

0.5 points per $1 on Government spend

1.25 points per $ on all purchases except on Qantas services and Government spend

2.25 points per $ on Qantas services

0.5 points per $ on Government spend

-17% on all purchases except on Qantas services and Government

-10% on Qantas services

No change on Government spend

Qantas Premium 1.25 points per $1 on all purchases except on Qantas services and Government spend

2.25 points per $1 on Qantas services

0.5 points per $1 on Government spend

1 point per $ on all purchases except on Qantas services and Government spend

2 points per $ on Qantas services

0.5 points per $ on Government spend

-20% on all purchases except on Qantas services and Government

-11% on Qantas services

No change on Government spend

Qantas Discovery 1 point per $1 on all purchases except on Qantas services and Government spend

2 points per $1 on Qantas services

0.5 points per $1 on Government spend

0.75 points per $ on all purchases except on Qantas services and Government spend

1.75 points per $ on Qantas services

0.5 points per $ on Government spend

-25% on all purchases except on Qantas services and Government

-13% on Qantas services

No change on Government spend

Velocity Platinum 1.5 points per $1 on all purchases except on Virgin Australia services and Government spend

2.5 points per $1 on Virgin Australia services

0.5 points per $1 on Government spend

1.25 points per $ on all purchases except on Virgin Australia services and Government spend

2.25 points per $ on Virgin Australia services

0.5 points per $ on Government spend

-17% on all purchases except on Virgin Australia services and Government spend

-10% on Virgin Australia services

No change on Government spend

Velocity Escape 1 point per $1 on all purchases except on Virgin Australia services and Government spend

2 points per $1 on Virgin Australia services

0.5 points per $1 on Government spend

0.75 points per $ on all purchases except on Virgin Australia services and Government spend

1.75 points per $ on Virgin Australia services

0.5 points per $ on Government spend

-25% on all purchases except on Virgin Australia services and Government spend

-13% on Virgin Australia services

No change on Government spend

Business

Gold Business

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Government, Utilities and Insurance spend

0.75 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Government, Utilities and Insurance spend

-25% on all purchases except Government, Utilities and Insurance spend

No change on Government, Utilities and Insurance spend

Business Platinum 2 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1 point per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend

1.125 points per $ on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

1.125 points per $ on all purchases except Government, Utilities and Insurance spend

1.125 points on Utilities and Insurance spend

0.5 points on Government spend

-43.8% on purchases at restaurants, airlines, accommodation, advertising, courier & freight, computer supplies and foreign currency

+12.5% on all purchases except Government, Utilities and Insurance spend

+125% on Utilities and Insurance spend

No change on Government spend

Business Accelerator no longer available 2 points per $ on all purchases except Government, Utilities and Insurance spend

0.5 points on Utilities and Insurance spend

0.5 points on Government spend

1 point per $ on all purchases except Government, Utilities and Insurance spend

1 point on Utilities and Insurance spend

0.5 points on Government spend

-50% on all purchases except Government, Utilities and Insurance spend

+100% on Utilities and Insurance spend

No change on Government spend

Changes to card earn rates: in short

Qantas and Velocity co-branded American Express cards will be less impacted by these changes than their American Express Membership Rewards-earning counterparts.

For example, the Qantas Ultimate or Velocity Platinum cards will earn you 1.25 points per $ on most purchases, versus 1.125 points per $ spent on the Platinum Charge and 1 point per $ on the Explorer.

While the airline co-branded cards will experience only slight reductions in their effective earn rates, the Membership Rewards cards, especially higher-earning variants such as the Platinum and Platinum Edge cards, will experience further reductions. The most notable are restaurant, travel and overseas purchases with the Platinum Charge card, and most purchases through the Platinum Edge.

The effective earn rate on supermarket purchases on the Platinum Edge will be halved from 3 to 1.5 points per $ spent

Therefore, your decision around card choice should be influenced by your spending habits. For example, if you are a Platinum Card Member who predominantly uses your card for purchases at restaurants and overseas, then you may wish to consider switching to an airline co-branded card that will earn you a slightly higher earn rate on these purchases.

Changes to transfer rates to Membership Rewards program partners

From 15 April 2019, American Express Membership Rewards transfers to most partners are also changing. American Express will also consolidate the different varieties of Membership Rewards points, including Ascent, Ascent Premium and Gateway, into one unified points currency.

American Express Explorer Card Members currently earn Membership Rewards points of the Gateway variety but there will be consolidation into one unified program come April

Here are the figures for Ascent:

Partner Current transfer rate Future transfer rate Change
Most airline programs 1:1 2:1 -50%
Air New Zealand Airpoints 100:1 200:1 -50%
Emirates Skywards 1:1 (Ascent Premium)
4:3 (Ascent)
2:1 -50%
-34%
Hilton Honors 1:1 2:1 -50%
Marriott Rewards-SPG 3:2 3:2 No change

and Gateway cards:

Partner Current transfer rate Future transfer rate Change
Most airline programs 4:3 2:1 -34%
Air New Zealand Airpoints 400:3 200:1 -34%
Hilton Honors 1:1 2:1 -50%
Marriott Rewards-SPG 3:2 3:2 No change

Changes to redemptions: in short

You can see that, with the exception of Marriott Rewards-Starwood Preferred Guest, which had its transfer rate devalued in August, all other partners will have their transfer rates reduced by between one-third and one-half.

Those holding cards that earn into the Ascent variety of Membership Rewards, like Platinum Charge and Platinum Edge Card Members, are harder hit than those who hold Gateway-earning cards, like the Explorer and Essential. Note, however, that some Platinum Charge and Centurion Card Members have received an offer to double their points balance when the devaluation kicks in, thereby maintaining the value of their points. Other Card Members have not received these offers and are not eligible to take advantage of them, even when calling Amex.

If you want to use your Membership Rewards points at a fixed value for bookings through American Express Travel, you will see each point worth 0.5 cents instead of the current redemption rate of 1/0.75 cents per point for Ascent/Gateway.

Frequently Asked Questions

Why are these changes occurring?

Due to RBA changes in 2017, the payment landscape changed significantly in Australia, which resulted in a reduction in the merchant fees that were being charged by competitors of American Express. To ensure that American Express remains competitive, they have had to also reduce their merchant fees. This has resulted in more merchants accepting American Express cards.

What should I do if I have a large balance of Membership Rewards points?

Hold off. There is no need to rush as they are giving Card Members plenty of notice, and strategies to maximise your balance will emerge over the coming months.

Will sign-up bonuses be reduced moving forward?

There are no indications that sign-up bonuses will decrease anytime soon, especially given a headline promotion of, for example, 100,000 Membership Rewards points on the American Express Explorer will only transfer to 50,000 airline points moving forward instead of the current 75,000 points.

Are other benefits such as travel credits, lounge access, complimentary flights or insurance changing?

All other benefits are remaining the same, however, some small benefits will be added, which Point Hacks will cover in future articles. Also, Platinum Card Members will see the removal of points caps.

What is happening to David Jones-branded cards?

If you are opted into earning Qantas Points on your card, then your effective earn rate is dropping by one-third across the board.

However, if you are earning Membership Rewards points (of the David Jones variety), then there is no change. Your earn rate is staying the same and the transfer rate is already set at what the Ascent and Gateway varieties are moving to, which is 2:1.

Our advice

On earn

Overall, these changes are negative.

Many of you are likely wondering what you should do with the American Express cards you currently hold. For those who are happily holding Qantas or Velocity co-branded cards, in our opinion, these changes are not significant enough to warrant any real action, given they have come through relatively unscathed.

Airline co-branded cards like the Qantas American Express Ultimate will have higher headline earn rates than Membership Rewards-earning cards but will lock you into one airline currency

However, for those holding American Express Membership Rewards-earning cards, your decision is going to revolve around how much value you place on the flexibility of the American Express Membership Rewards program versus the ability to earn a higher earn rate with an airline co-branded card.

The decision is far from clear and will be determined by individual preference and circumstance. However, a good rule of thumb is: if you value flexibility in choosing which frequent flyer program to transfer your reward points to over points earn, then you should consider holding onto your current card/s. If points earn is your key objective though, then you could consider switching to an airline co-branded card but only if you are willing to commit to earning solely through Qantas or Velocity Frequent Flyer.

On redemption

If you currently have a large balance of Membership Rewards points, you may want to hold off. American Express has given five months’ notice and there may be transfer bonuses introduced in the meantime, so you would not want to miss out on them by speculatively transferring your points out to a partner program/s.

There is no need to do anything about the cards in your wallet right now. If eventually you are considering the cards you have in your wallet in light of these changes, it may be worth giving American Express a call first to see if there is a more appropriate card for you based on your spending patterns.

What is your take on these changes? How will they affect your points-earning and redemption strategy moving into 2019?

Co-written with Daniel Sciberras.
Supplementary images courtesy American Express.