Redeem Membership Rewards points at 1c each against charges [Targeted]


My wife logged in to her account this morning to find that she was targeted for an offer to redeem Membership Rewards points and use “40% fewer” points to cover eligible charges. Those targeted can redeem Membership Rewards points at a value of 1c per point. While points are generally much more valuable when transferred to partners, the option to cash out at 1 cent each may be attractive to those to whom cash is king.

Update: Some members are targeted for a deal to use just 15% fewer points. Don’t do that. It’s a terrible deal that offers about 0.71c per point.

This is not the first time we have seen Amex target some cardholders for this increased redemptions. Points can usually only be used at a value of 0.6c per point to offset charges, which is a horrible deal. Even at 1c per point, I don’t consider this to be an exciting redemption opportunity, but since Schwab reduced their cash out rate to 1.1c per point, those who don’t yet have a Schwab card and prefer to use their Membership Rewards points in a cash-like way may prefer “cashing out” this way to opening a Schwab account.

Note that Amex will not let you redeem your way to a negative balance — past charges that are greater than your statement balance can not be covered with points — so it isn’t a true “cash out” in the sense that you can not redeem a mountain of points unless you have a corresponding mountain of charges on your card.

Again, this isn’t a great use of points. I’d much rather take advantage of the many Membership Rewards sweet spots, but if you do not intend to travel in the foreseeable future and/or keeping cash in your pocket is of primary concern right now, this could be a tool to use.

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[…] Update (Oct. 11, 2021) – This offer is back again. Check your American Express Membership Rewards accounts. (HT: FM) […]