It’s no secret that here at Prince of Travel, we really, really love American Express.
What we love even more about them is their proprietary points program, Membership Rewards. If we’re recommending these types of points so much, then we have to address two major questions: why we love Amex’s rewards program, and how to actually use your card to its maximum potential and make off with your spoils.
There’s a reason that this article is titled “Do You Take Amex?” Unfortunately, being the #1 card for a consumer’s travel desires means that it isn’t always the card a merchant is happiest to see being used at their sales terminal – but more on that later.
Membership Rewards Are King
The Membership Rewards program is, in many ways, the “gold standard” of the Miles & Points game. The reason? Interchangeability.
To illustrate this, I want to use an example: Imagine you’ve banked enough points and cash to finally take an epic adventure somewhere in the world you always wanted to go. A place, perhaps, like the exotic continent of South America.
As you roam about the land, like Che Guevara did so many years ago on the back of his motorcycle, you realize that you need to pay in all kinds of different currencies. In Peru, you need the sol, in Bolivia the boliviano, and in Colombia and Chile two different types of peso.
As you fiddle with the wrong bills for the umpteenth time, you feel exasperated. What if there were one type of currency you could use or convert anywhere without having to juggle a half-dozen types of coin?
And then it hits you that your swaggering Yankee travel companion has that kind of power by using the evergreen (and ever-accepted) United States Dollar. You see, he can easily exchange his USD for local currency, or just use it on its own (albeit not always at the best value) while the locals just laugh and turn down the weird purple $10 CAD bill you left in your wallet.
Well, the American Express Membership Rewards point is much like the United States Dollar of the points world. It can be converted to airline miles, or exchanged for hotel points and free stays. This makes them the greatest type of point which you can own.
Before we continue, though, you need to be advised that all Membership Rewards points are equal, but some are more equal than others.
That is to say that American Express issues two distinct types of Membership Rewards (MR) points: the “regular” MR points earned on cards such as the Gold and Platinum series of cards, and the Membership Rewards Select points which are usually earned at higher rates on cards such as the Cobalt and Business Edge. These MR Select points cannot be transferred to frequent flyer programs, but still offer great value.
Am I the Only One Here Paying with Amex?!
As we alluded to earlier in this article, just because an Amex card is great for you as a consumer doesn’t mean that merchants perceive them as being the best value for their businesses. This is because of something called interchange fees, which are fees levied by payment networks on merchants.
So for every transaction made with a credit card, the issuer is given a tiny percentage by the merchant who accepted payment, something which has caused the merchants to successfully lobby for a lowering of said rates (although that process has been delayed due to COVID-19).
Notice a credit card issuer that’s missing from the lowering of interchange fees? That’s right, it’s American Express. This is because the average fee of an American Express card generally needs to be higher, in order to pay for those amazing points programs and services we love and enjoy.
Therefore, merchants will in many cases avoid accepting American Express altogether, as they don’t want to be dinged extra fees on their margins just to accept an additional class of credit card.
And it isn’t just the smaller merchants, either: the Loblaws leviathan chain of grocery stores only takes MasterCard and Visa, while Costco’s retail stores (though not costco.ca) ended their partnership with Amex in 2015, with the contract going to MasterCard in Canada and Visa in the United States.
How to Use Amex at More Places Than You’d Think
The main reason that you want to be using Amex, aside from getting those sweet sweet MR points from daily spend, is so that you can collect as many welcome bonuses on American Express cards as possible. This will allow you to rack up huge amounts of points much faster than just via daily spend, so long as you hit the minimum spend threshold.
As we have seen, the major obstacle is that many merchants don’t take it… or do they?
Enter the duplicity of the “No Amex” sign.
Many merchants will add a “No Amex” sign to a terminal, or have a handwritten sign in their own window. Technically, this can be in violation of agreements that the merchant has with their payment networks, as well as the code of conduct set out by the Government of Canada itself. No, seriously.
Therefore, if you’re shopping somewhere that you feel might take Amex, even if they don’t want to, you may as well attempt to insert your card and see if the transaction goes through. If it does, you’re gold!
Now sometimes you’ll be explicitly called out and told not to use the card – the clerk may refuse to hand you the payment machine, or a waiter will return your card. Don’t panic, and don’t be discourteous. After all, the person turning you down is often an employee who’s doing as instructed and doesn’t understand the “behind the scenes.”
If this occurs, you can either pay with a different card, or you can try a little trick – especially if you’re hopeless addicted to your smartphone like I am.
While we aren’t at Shenzhen levels of cashless transactions here in Canada, we do have the luxury of being able to use various payment apps such as Apple Pay, Google Pay, or Samsung Pay, all of which are freely available and easy to install on your phone.
A great way to get around the “No Amex” signs is to add your American Express card to your mobile wallet. Then, simply pay with your chosen app via contactless transaction.
While sometimes the attempt won’t work, you’ll be stupefied how often it actually goes through. Just remember to remain courteous, and if a manager insists you refund the transaction and pay via another method, politely refuse. You’ve already paid, after all.
You also have the option to report merchants who are in violation of their payment terms, but as the ancient saying goes, snitches get stitches. So don’t be going around reporting people willy-nilly – but do stand up for your rights as a consumer when you’re being subjected to blatantly unfair treatment.
For example, I can remember dining at a restaurant with an Amex sticker on the door, Amex paraphernalia at the cash register, and an Amex bill-holder at the end, but being instructed not to pay with my American Express Platinum Card! Needless to say, I took it upon myself to write a brief report over at TakeAmex.ca.
The next method to curtail the blackout is by buying gift cards or prepaid credit cards. For example, Loblaws doesn’t take Amex, but it is possible to buy gift cards for Loblaws-owned stores at merchants which do accept American Express.
As an added bonus, many stores that sell said gift cards are coded as grocery stores, and so pair well with cards like the American Express Cobalt Card that have grocery multipliers. This can be a fantastic way to hit a minimum spend and rack up some points along the way, all while shopping at retailers who might not take your card of preference.
The last method is somewhat similar to the gift card method, albeit it can incur fees. This is by using a bill-paying service such as Plastiq or PaySimply, which permit you to pay for certain kinds of bills or services that may not take American Express, or any credit cards at all for that matter.
You’ll be charged transaction fees between 2.29–2.85%, but at the end of the day, if you really need to hit a minimum spend or just use a credit card for a service that doesn’t accept them, these may be viable options.
My Tips on Maximizing MR Growth
Now we have some ideas on how to use your new American Express card, and we know why you want to hit those minimum spends. But you may be asking: how else can I maximize the returns on these credit cards so I can meet my travel goals in the future? How can I hit minimum spends faster?
I’m glad you asked these questions, and it’s not like they’ve gone unanswered. Ricky has addressed this on the blog several times, but I just want to give you a few of my favourite tricks.
The first is finding ways to hit minimum spends by prepaying bills, especially subscriptions, if you have the funds. My favourite choices are things like car insurance, annual Netflix subscriptions, and gym memberships. To use the car insurance example: if your premium is, say, $1,200 for the year, it may seem like a steep one-time payment until you realize that’s 1,200 MR points, $1,200 towards a minimum spend, and $100 not being debited from your bank account every month.
Another one I frequently use is to pay for a group meal with friends and have them reimburse you with cash – your pals get to go home and pay you back at their convenience, and you get closer to your minimum spend all while racking up bonus points on dining multipliers.
In that time before COVID-19 that feels like a forgotten memory, I also engaged in multi-player mode, wherein my friends and I referred one another to American Express cards we desired and could meet the minimum spending for. Sadly, the referral bonuses that used to make this so lucrative have been lowered, in part because of the ongoing health crisis.
However, to quote H.P. Lovecraft: “That is not dead which can eternal lie, And with strange aeons even death may die.” While you can still trade referrals with your household or close friends at the moment, it is not anywhere near as lucrative as it once was, so we hope to yet see the glorious resurrection of American Express referral bonuses in the future.
Without a doubt, American Express Membership Rewards is the gold standard of travel points for would-be Canadian globetrotters. At the same time, there are not-so-insignificant hurdles to overcome in order to maximize your gains from the program.
If you follow the steps we’ve outlined here, you’ll find it much easier to use your Amex card at various businesses, and you’ll also be able to earn even more points by bringing in anybody who would be interested in joining in on your Miles & Points journey.
Until next time, may your points account be ever-replenished.