There are several excellent cards earning Amex Membership Rewards points. In general I think the best way to redeem these points is to transfer them to Amex’s airline partners, so you can get outsized value for premium redemptions.
That’s not the only option, though. Amex also has the Pay With Points program, which is another popular way to redeem points, which may prove practical for a lot more people. In this post I wanted to take a closer look at how that works.
What is Amex Pay With Points?
The Amex Pay With Points program essentially lets you directly redeem your points towards purchases. The value is fixed depending on what you’re looking to redeem for, and the value ranges from very bad to potentially pretty decent, if you know what you’re doing.
Just to give some examples of redemption rates you can expect through Amex Pay With Points:
- Amex points can generally be redeemed for 0.6 cents each towards credit card charges
- Amex points can generally be redeemed for 0.5-0.7 cents each towards gift card purchases
- Amex points can generally be redeemed for 0.7-0.85 cents each towards car rental and hotel purchases through Amex Travel
- Amex points can generally be redeemed for 1.0 cents each towards airfare purchases through Amex Travel
As you can see, the value there varies significantly. For context, I value Amex Membership Rewards points at 1.7 cents each, and that’s thanks to the ability to transfer Amex points to partner airlines, where you can book very expensive first & business class tickets at a reasonable cost with points.
I do think there are circumstances where it can make sense to use Amex Pay With Points, but please don’t use points to wipe our charges or for gift cards, because you shouldn’t settle for just 0.7 cents of value per point. Rather the potential value comes from using Amex points towards airfare purchases, as you can do much better than I’ve outlined above.
Using Amex Pay With Points for flights
If you are going to use Amex points as cash towards a purchase, you’ll get the most value using your points towards the cost of flights, since each point can be redeemed for one cent (or more, as I’ll discuss below).
If you’re going to use this option, there are a few general things to be aware of:
- You must book your airline ticket through Amex Travel (even International Airline Program bookings qualify)
- When you book your flight, the full dollar amount of the flight will be charged to your Amex card, and then a corresponding credit will be applied to your account within 48 hours, reflecting that you redeemed points for the purchase
- You can use Amex Pay With Points to partially pay for an airline ticket, though you need to redeem a minimum of 5,000 Amex points
- If you cancel a flight, you’ll receive a statement credit — if you want Amex points returned to your account, you can contact Membership Rewards to have that done
- For all practical purposes Amex Pay With Points bookings are “paid” tickets as far as airlines are concerned, so flights should be eligible for mileage accrual, and should count towards elite status
Get up to 1.54 cents with Amex Pay With Points
If you’re looking to maximize points, getting 1.0 cents of value per Membership Rewards points probably doesn’t sound exciting. But that’s where two business cards come in handy. Specifically:
Now, there are some things to be aware of:
- This rebate only applies when booking first or business class travel, or economy travel on your designated US airline (you can designate an airline in your Amex account)
- You can pool your Amex points across all cards and redeem at these rates, assuming you have one of the above cards
- With this redemption option, the Amex Business Gold offers up to 250K points in rebates per year, and the Amex Business Platinum offers up to 500K points in rebates per year
- You need to have the full Amex points for the redemption upfront (based on the rate of one cent per point), and then the 25-35% points rebate will post to your account within 6-10 weeks
Just to break down the math here, say you want to use Pay With Points for a $519 Alaska Airlines first class flight from Los Angeles to Honolulu:
- Regardless of which Amex Membership Rewards points card you have, you’d need to pay 51,900 Amex points for that flight
- If you had the Amex Business Gold you’d receive a rebate of 12,975 points after the fact (meaning you’d pay 38,925 points in the end), while if you had the Amex Business Platinum you’d receive a rebate of 18,165 points after the fact (meaning you’d pay 33,735 points in the end)
Tip: Stack Amex Pay With Points & Insider Fares
There’s another trick that can get you even more value. Amex has Insider Fares, which are essentially discounted fares on a variety of airlines. The discounts vary, and in some cases they’re substantial, while in other cases there are no savings.
This is available to anyone with an Amex card earning Membership Rewards points, and the Insider Fares will show up as long as you have enough points to cover the entire cost of your ticket. What’s awesome here is that you can stack these opportunities.
In other words, you could get a discounted ticket through the Insider Fares program, and then you could use the 35% Pay With Points rebate on top of that.
As an example, take an Insider Fare from Tampa to Maui in American Airlines first class. The standard fare would be $822 (which would require 82,212 Amex points), while the Insider Fare lowers the cost to 68,192 points (the equivalent of $682 worth of airfare).
In addition to the already discounted pricing, if you had the Amex Business Gold you’d receive a rebate of 17,048 points after the fact (meaning you’d pay 51,144 points in the end), while if you had the Amex Business Platinum you’d receive a rebate of 23,867 points after the fact (meaning you’d pay 44,325 points in the end).
Is Amex Pay With Points for flights worth it?
There’s often a tough balance between maximizing your rewards points for the best value, and just using them for what’s practical. So while there’s no “one size fits all” answer as to whether or not Pay With Points is worth it, here are some general thoughts:
- Please don’t redeem your Amex points for less than a penny each towards statement credits, gift cards, etc., because that’s a terrible use of points
- Personally I’d try to avoid redeeming Amex points for one cent each towards airfare, since that’s still on the very low end of Amex points redemptions
- Amex Pay With Points can be a fairly decent deal with the American Express® Business Gold Card (where you can get 1.33 cents of value per point), and I’d say it can become a very good deal with the Business Platinum Card® from American Express (where you can get 1.54 cents of value per point)
- If you’re going to make a Pay With Points redemption, it could be worth picking up the Amex Business Gold or Amex Business Platinum just for that, since all your points will suddenly get that higher value
- Pay With Points can become a better value if you can book an Insider Fare, or if you’re going for elite status, and value the elite miles you’re getting by booking a “paid” ticket compared to an award ticket
- Pay With Points can be a great option in situations where award availability is decent, but paid fares are good; for example, business class flights to Hawaii are often expensive when redeeming points, but reasonable in cash, making Pay With Points a great option
Amex Pay With Points allows you to redeem points at a fixed rate towards a variety of purchases. The best value comes with using Pay With Points for flights, since you’ll get a minimum of one cent of value per point.
Amex Pay With Points for flights starts to really become valuable if you have the American Express® Business Gold Card or the Business Platinum Card® from American Express, in which case you can get a 25-35% rebate on these bookings, getting you up to 1.54 cents of value per point.
Personally I still prefer to transfer my Amex points to travel partners for first & business class award redemptions, but for some people this could be worthwhile.
To those with Amex points, how do you feel about the Pay With Points program? Have you ever used it for flights?