The Basics - Why Amex

When considering what credit card suits them best many people primarily explore the options their bank has and feel like the decision is a matter of what type (ie. Cash back or travel etc) and what price point (ie. No fee, premium, etc). In part it seems reasonable to assume that most of the big banks will largely have similar programs and the thought of opening another bank account, especially in Canada's landscape of account fees, is just not appealing. Beyond that, most Canadians think Visa or MasterCard - but I'm going to make the case for why you should consider picking up an Amex card (or two!), and lucky for you Amex has the most to gain by enticing you to give them a chance so there are some great benefits you can take advantage of.

Rewards System

While Amex offers cards that generate various types of rewards, the most interesting one for this discussion is Amex's Membership Rewards or MR. What makes them so enticing? They are a hybrid point containing aspects of Fixed, Variable, and Transferable Points, with high earn rates and easy synergies.

First, MR have a Fixed Value as they can be applied against the statement at a value of 1 cent per point (1cpp) (similar to Scene+ or TD Travel).

Second, they can be easily used through their travel portal's flight chart for for Variable Value typically 1-2cpp (similar to Avion). This first two aspects mean that you can more safely dip your toes into Amex by considering this floor value when assessing the landscape.

Third, as a Transferable Point, MR can partner well with your current travel card. They transfer near instantly at 1:1 to Aeroplan if you're already in that universe (ie. TD or CIBCs Aeroplan cards). If instead you bank with RBC and collect Avion points, you can convert both MR and Avion to British Airways Avios points at 1:1.

They can transfer to other airlines opening up more even more travel options such as Air France/KLM's Flying blue, Delta SkyMiles, and Etihad Guest at 1:0.75, and flexibility is key in getting the biggest bang for your buck.

Finally, while less often to be a great value, MR can transfer to two hotel programs, Marriott Bonvoy at 1:1.2 and Hilton Honors at 1:1 (Marriott being the better value option here). This can make sense if you're short on an otherwise great hotel redemption, or if you simply want to drive your trip cost closer to 0.

With all of these transfer partners, it can often help the Amex out earn dedicated cards while also allowing for more redemption flexibility.

Earning MR

One of my favorite Keeper Cards is the Amex Cobalt, its 5x MR per dollar on grocery, restaurant, and food delivery make it one of the best every day cards out there in this category. If used to statement credit it's effectively 5% cash back, and if converted to AP points it demolishes the premium TD AP VIP card's 1.5x on food despite having a lower fee. Up and down the price points, and across the programs, it comes out on top again and again for food.

There are other standouts in the Amex portfolio, but the takeaway is that you can combine the flexibility of MR with as good or better earn rates than other programs. But it isn't just earn rates that Amex is using to try to entice Canadians...

Sign up Bonuses

Amex frequently has large sign up bonuses to encourage you to give their cards a try. Knowing that you could always convert them at 1cpp to cash and not renew the card makes it much less "risky" to see how the earn rate stacks up and I'd you use any of the premium features on the card.

For example, the public offer for the Amex Cobalt is a bonus 1250 MR each month you spend $750 for the first year. That's worth $12.50 and closely matches the $12.99 per month fee. That means if you use my link and spend an average of $1000 per month in food, across the year you'd get 15k in bonus points plus 60k from the 5x earn for a total of 75k points. With a cash value of $750 you easily out earn the $155.88 in fees even if you decide to give up on using it for travel. But I would note that that 75k points is enough to get you business class to Europe, particularly if you know how to Maximize Redemptions.

On the more extreme end Amex has sign up bonuses of 100k points or more, such as the Amex Platinum earning 70k for spending $10k in 3 months and another 30k for spending in the second year. Once again they position that first year bonus (worth $700 cash back) to offset the annual fee ($799) particularly when combined with its credits (eg. $200 annual travel credit) to make it easier to explore the other card perks before deciding if you would consider a luxury card as a Keeper Card.

Card Perks

Another reason to consider getting an Amex are the non earning related perks that they can offer. These benefits are most notable on their highest level Platinum and Platinum business cards and include benefits for travellers like lounge access, and hotel and car rental reward status upgrades. They also include periodic "offers" for statement credits which can range from widely useful ($10/mo for cellphone bill on Amex Platinum Business) to very niche.

One nice thing about these statement credit perks is that they can potentially be combined with other promotions. For example at the time of writing Aeroplan Estore has a 10x AP promo on HP computers. You could simultaneously get lots of points and 10% credited back to your card with this example.

Access to the US Credit Card Market

Amex also provides a very useful service where they can utilize your Canadian Amex credit history to support the application for a US Amex card. This can be helpful as a way to get started building a US credit score while also benefiting from their more extensive American card offerings.

Acceptance

So maybe you're convinced, or near to it, but wondering about acceptance. What's the point of getting a card you can't use?

So let's talk acceptance briefly. Loblaws chain groceries do not take Amex directly, so if you insist on shopping there you would have to be a bit more creative than most beginners would want to be - but reach out to me for a chat if you want to learn how. But Sobeys, Food Basics, Freshco, Longos and others do take Amex. Also, if you order food delivery, be it Instacart or Uber for groceries, or UberEats, Door dash etc for takeout, Amex is good to go. As a side note sometimes I don't feel like making a Costco trip so I'll accept the fees and markups of Instacart and it feels a little better knowing I can get 5x MR using my Cobalt which otherwise wouldn't work in store.

All that said, I think any Canadian who has an Amex should also have a Visa or MasterCard for circumstances were there is no good workaround. For beginners you can still keep your purchasing simple with the approach of "use Cobalt for food unless refused" and the visa for everything else, I would recommend the TD AP VI as a great synergizing card often available with a waived annual fee.

Conclusion

Amex cards bring flexible rewards, with high earn rates and enticing sign up bonuses to offset their fees, and luxury perks. Card acceptance can be an issue but shouldn't stop you from giving them a try. If the benefits didn't feel worth it, you can always cancel before renewal. Consider starting with an Amex Cobalt to partner with your current card and then reassess in a few months.

Advanced Reading

I often use the Cobalt as my go to high earn card, it has a low fee and great earn on food. Business owners often have a lot of uncategorized spend ie. Expenses that don't fit into multiplier categories like food and travel. Maybe it's office equipment, professional licensing fees etc. Many cards earn only 1x on uncategorized spend, so they may consider an expensive premium card that earns at 1.25x. But I want to also highlight the Amex Business Gold. While it's default earn rate is only 1x on uncategorized spend, it has a unique reward where every quarter where you spend at least $20k earns you another 10k MR. This means that for spending between $20k and $40k a quarter you'll end up ahead of the much more expensive premium cards that earn 1.25x on uncategorized spending.

For example if you spend $25k per quarter on the business gold you'll earn 35k points versus only 31.25k on the TD AP VIP, RBC Avion VIP, or Amex Platinum level of cards which cost hundreds more a year. Over time the extra couple thousand points can add up, so while it's not for everyone, the right sized business should consider it for their primary card.

At quarterly uncategorized expenses higher than 40k the premium cards again take the lead. For example $60k a quarter would earn 70k MR on the business gold vs 75k on the platinum.

Referrals

With its best in market 5x multiplier Amex Cobalt is a powerful point earner that can get you on flying for free 5 times faster than much of the competition - sign up here.

To see the access the best offers for different Amex card such as the Business Gold, or Platinum click here.

You're going to need somewhere to stay after all of these free flights. The Amex Bonvoy or the Business Bonvoy card will earn you free hotel stays and can be combined with the Aeroplan eStore for some incredible double dipped rewards.

If you're on the fence, or wondering about other cards reach out to me for a free consult, and if you sign up for a card through my link, let me know and I will walk you through advanced tricks and personalized advice to help you get the maximum benefit both from earning and redeeming points - getting your travel journey going faster than you ever thought possible.

Disclaimer

This should not be taken as financial advice and details are subject to change. I have made good intentioned efforts to be accurate but ultimately consult card terms and conditions