“Is Amex Membership Rewards ‘pay with points’ option a bad deal?”

Over Easter, I will be answering a number of the reader questions that were submitted via this article.  If you didn’t take part this time, don’t worry as I will be re-running this feature in the Summer.  Feel free to expand on or critique my answer using the Comments section below!

Today’s question is from Mr Bridge who asked:

“Is it just me, or is the Amex ‘pay with points’ for travel a really really bad deal?”

The short answer is “Yes”!

Here is the long answer.

American Express Membership Rewards offers a number of ways in which you can redeem your points for cash or something that is nearly as good as cash.  These include gift cards, including Tesco gift cards, as well as the option to book travel using your points or to redeem your points for a statement credit.

In general, these are all a bad deal.

I try to target 1p of value per Membership Rewards point.  Transferring 1:1 into Avios or other airline miles can achieve this, as can hotel redemptions.  This post, for example, shows how Club Carlson redemptions via an Amex MR transfer can be great value.

By comparison, this is what you get for redeeming for cash or near-cash:

Paying with points at travel.americanexpress.co.uk = 0.45p per point, based on dummy reservations I tried

Redeeming points for statement credit = 0.4p per point

Redeeming for Tesco gift cards = 0.5p per point

Redeeming for Amazon gift cards = 0.5p per point

Redeeming for East Coast Trains gift cards (valid for all train operators) = 0.6p per point (special offer)

None of these are great, frankly.  You are better off trying to get some value via the travel partners.

(Ironically, for booking hotels, you will get 0.58p per point by transferring to Avios and using the Avios hotel booking service!  That gets you almost 30% more value than booking via the Amex service and getting 0.45p per point!)

Remember that if you have some Membership Rewards points that you can’t use, you can transfer them to a third party for a flat fee of £15.

Want to earn more points from credit cards? – December 2021 update

If you are looking to apply for a new credit or charge card, here are our November 2021 recommendations based on the current sign-up bonus. 

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals:

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review