Reduced AMEX earn rates from April 2019

[Chicken]

there is no value in keeping the Platinum Edge
After the changes kick in, the Westpac Black is far more rewarding for me than the Platinum Edge (at least until the free first year runs out), and even the Citibank Signature would earn 90% of what the Platinum Edge would.

Both Citi Signature and Westpac Black earn 0.4 SQ mile per $ , while Amex Edge would earn 0.5 and extra for supermarkets and fuel.

Seems us old timers with Reserve dodged the devaluation?

 

[rock86]

And with QF? I just don't bother with QF. You can't get a seat even if you have the money for fuel fine. I have had 300k QF points sitting there for years and could never get a seat.

Agree with others that have posted in reply to this. While the fuel fines can be a pain, if you can't find any seats (especially with their partners) then you are doing something very wrong.

 

[unfunkable]

I read this thread again . Is it me or does the cent card people seem to think , their points will earn into a different category and not be susceptible to the reduction in transfer rates . If this is in fact the case , and it earns at a net rate of 2.xx kf miles per dollar, for high spending people, I daresay the fee of 5k or what ever it is , is still worth it?

 

[Oxy]

The difference is not that much for the cards I have?

Edge to SQ KF miles per $1

Supermarkets
from 3 to 1.5
Petrol
from 2 to 1.5
Overseas spend
from 1 to 1
Government, utilities, insurance and telecommunications
from 0.5 to 0.5 (same)
All other spend
from 1 to 0.5

It is a devalue, but not THAT bad?

For me as an edge holder, yes it is that bad. The vast majority of my earning will be slashed in half. I put what I can through the supermarkets of course, but most of the earn is simply 1ppd. Will hit me again on the Business Accelerator.

What bugs me about this is that Amex claim the widespread availability and reduced merchant fees as the reasons behind this. Yet now that their cards are supposedly usable in more places with lower surcharges does not mean I can magically put twice as much through it to maintain the same earn as before.I don't use my visa that much now, nor have the cash flow. I have found I can probably already put about 70-80% of my cc spend through my amex.

All they are doing with these changes is loosing their main point of difference from their competitors, the great point earn. Pun intended.

 

[Chicken]

For me as an edge holder, yes it is that bad.

I can see that I would cut my tie with AmEx too, if I only have the Edge card. I would just rely on the Citi Signature free for life.

 

[albyd]

It appears there might be some confusion about future earn rates. Burn rates to most airlines will be the same 2:1 regardless of the MR card you’re holding as all the different MR programs which have arguably helped stave off the devaluation (although many are earning 2ppd on Explorer), are being folded into one.

Centurion will earn the most (as they should for that annual fee) at 2.5MR/$ (1.25 FF points into most airlines).

Platinum charge will be at 2.25MR/$ which is 1.125/$.

The rest are well published. There've been some reports from Centurion holders on AFF their existing points will be doubled to achieve no devaluation on existing points. That’s great if true. Going by what’s been announced and what others (eg Altitude) have done, that might not be the case.

That would be very admirable of Amex to do. Would be some pressure to give it to all members (at least Ascent Premium). I’m not too fussed have made lots of redemptions this year but am thinking my points balance will be much higher than it currently is by April so keen on this result if it can be achieved.

Devaluations have become part of this points game. If we can retain parity for old points, our only decision is to whether to keep participating to rack up new points.

 

[andye]

I read this thread again . Is it me or does the cent card people seem to think , their points will earn into a different category and not be susceptible to the reduction in transfer rates . If this is in fact the case , and it earns at a net rate of 2.xx kf miles per dollar, for high spending people, I daresay the fee of 5k or what ever it is , is still worth it?

I don't think all do. Its true that the base earn has gone up from 1 to 1.25 KF/$. Though quite why you would have had a Cent and not also have an Explorer is puzzling to me (but I suspect many Cent holders have more profitable things to do with their time than worry about point optimisation)

 

[Saltywings]

True. But like when the public were outraged when arnotts changed the shapes recipe and then put it back.

Anything is possible

I imagine unwinding a recipe change is going to cost almost next to nothing versus unwinding a rewards program change that would save Amex literally $millions/billions in the medium/long term. But yes, anything is possible!

 

[TonyHancock]

Over the last three weeks I have received the sort of customer service I believe a small town country store would be embarrassed by. My Plat charge card will be going as soon as I get back to Australia to sort it out. The devaluation is the "icing on the cake" from this inept and amateur, business.

A little off topic but here is what you can expect for $1450 per year. Call backs promised by customer service agents not materialising, inaccurate conflicting advice by customer service reps, supervisors calling incorrect telephone numbers in the middle of the night, systems not allocating points correctly, failures to refund commission charges on overseas fraudulent transactions. It never used to be like this, Amex has been my go to card for 22 years, my presumption is that cost cutting is behind the systemic customer service failures.

Perhaps management will realise that attempting to be a premium product at a premium price but offering shoddy amateur customer service is not a sustainable business model. I might look for the sign on bonuses when they eventually do. At the moment the 28 Degrees Mastercard is looking like the best product for someone spending almost 6 months a year overseas.

 

[SOPOOR]

I imagine unwinding a recipe change is going to cost almost next to nothing versus unwinding a rewards program change that would save Amex literally $millions/billions in the medium/long term. But yes, anything is possible!

True. I think it's just false hope for me.

I know it won't happen. But maybe they will change something else that will make the blow not as bad. What that change might be? I have no idea.
Just still gutted

 

[Chicken]

Just a thought.

Going by this thread, it seems AmEx is being used by us to warehouse points. Maybe they have decided that their liability is too high, kinda like when you have too much annual leave, so they are now using this opportunity to clean everything up, forcing all of us to take annual leave.

 

[Saltywings]

Just a thought.

Going by this thread, it seems AmEx is being used by us to warehouse points. Maybe they have decided that their liability is too high, kinda like when you have too much annual leave, so they are now using this opportunity to clean everything up, forcing all of us to take annual leave.

Any accountants want to weigh in on how Amex reports warehoused points on its balance sheet? If they're liabilities, then golly, April 2019 will see an incredible improvement in their position practically overnight (assuming they use a CPP benchmark, and then effectively half that).

 

[SOPOOR]

Any accountants want to weigh in on how Amex reports warehoused points on its balance sheet? If they're liabilities, then golly, April 2019 will see an incredible improvement in their position practically overnight (assuming they use a CPP benchmark, and then effectively half that).

This is what i used and still think,

Although amex are awarding lets say a billion points per year for arguments sake, and that on paper is worth $10million for arguments sake again.

A decent portion of people will
- never use their points because their balance is too low
- never use thier points because they dont know what they want plus dont really care
- just cash it out as credit thinking somethinf is better than nothing
- get toasters
- use it for premium airfares
- expire (for other rewards programs, not amex, eg qantas

Just like gift cards there will be a decent chunk of % that the points wont be used or used on low redemption rates. And that there is no way despite giving away $10m worth , that its all going to be used and theyre making a mint off it.

So when they cry poor, i dont believe it for a sec

 

[andye]

Over the last three weeks I have received the sort of customer service I believe a small town country store would be embarrassed by. My Plat charge card will be going as soon as I get back to Australia to sort it out. The devaluation is the "icing on the cake" from this inept and amateur, business.

A little off topic but here is what you can expect for $1450 per year. Call backs promised by customer service agents not materialising, inaccurate conflicting advice by customer service reps, supervisors calling incorrect telephone numbers in the middle of the night, systems not allocating points correctly, failures to refund commission charges on overseas fraudulent transactions. It never used to be like this, Amex has been my go to card for 22 years, my presumption is that cost cutting is behind the systemic customer service failures.

Perhaps management will realise that attempting to be a premium product at a premium price but offering shoddy amateur customer service is not a sustainable business model. I might look for the sign on bonuses when they eventually do. At the moment the 28 Degrees Mastercard is looking like the best product for someone spending almost 6 months a year overseas.

I have noticed a marked drop in service reliability the last year too. Amex used to be my exemplar.

 

[opusman]

I wonder if there's a risk that Amex will suspend transfers out earlier than April 15th. They did that with SPG/Marriott even though the new rates didn't kick in for a couple of weeks.

 

[Chicken]

Just like gift cards there will be a decent chunk of % that the points wont be used or used on low redemption rates. And that there is no way despite giving away $10m worth , that its all going to be used and theyre making a mint off it.

There is a difference between gift cards and AmEx MR points.

With a gift card, say a $100 gift card is activated, you actually do need to do provision of $100, to fund the payment of $100, and this $100 is not a profit. There is also a hard expiry of the gift card, say 3 years by law in NSW, so after 3 years, if the gift card is not spent, the $100 gift card can be disabled, you know that the card holder can no longer get her / his $100 for sure, so the $100 provision can be safely removed, and the $100 can now be moved into profit. (this is how some of the FMCG companies I worked in function with this type of number moving)

The problem with AmEx, is there is no expiry date with MR, meaning if they do it as per above, then their provision would just sit there forever with no end in sight. Tell any financial person that there is no date on a movement (provision in this case) and they would make sure that their displeasure is known.

So when they cry poor, i dont believe it for a sec

This is not about profit, this is about keeping the book tidy, an accounting practice.

 

[asterix]

I have noticed a marked drop in service reliability the last year too. Amex used to be my exemplar.

The recent customer service experience I've received recently has been very poor. Numerous instances of being told I'd definitely get a call back this time. Calling a number of times to get something resolved, being transferred from department to department and then getting hung up on. Very very poor. My previous experience with AMEX was a good one, but the last 2 weeks or so have been disappointing to say the least.

 

[xzclzj]

I wonder if there's a risk that Amex will suspend transfers out earlier than April 15th. They did that with SPG/Marriott even though the new rates didn't kick in for a couple of weeks.

Well if they want ,it will happen . 'Sorry dear customer, we are facing some tech issue, we won't fix it until 15th April.'

 

[SOPOOR]

There is a difference between gift cards and AmEx MR points.

With a gift card, say a $100 gift card is activated, you actually do need to do provision of $100, to fund the payment of $100, and this $100 is not a profit. There is also a hard expiry of the gift card, say 3 years by law in NSW, so after 3 years, if the gift card is not spent, the $100 gift card can be disabled, you know that the card holder can no longer get her / his $100 for sure, so the $100 provision can be safely removed, and the $100 can now be moved into profit. (this is how some of the FMCG companies I worked in function with this type of number moving)

The problem with AmEx, is there is no expiry date with MR, meaning if they do it as per above, then their provision would just sit there forever with no end in sight. Tell any financial person that there is no date on a movement (provision in this case) and they would make sure that their displeasure is known.



This is not about profit, this is about keeping the book tidy, an accounting practice.

obviously the profit calcs for gift cards are going to be different, but my point stands,

if they claim/suggest that they give away $x worth of points when customers earn them, I can guarantee that there is a high proportion of points that wont be used for high redemption rewards such as premium flights

 

[Chicken]

obviously the profit calcs for gift cards are going to be different, but my point stands,

if they claim/suggest that they give away $x worth of points when customers earn them, I can guarantee that there is a high proportion of points that wont be used for high redemption rewards such as premium flights

Oh yes, there are a lot of people claiming their MR points for plastic gift cards right now for Christmas. Unbelievable!