By far the most compelling rewards currency for Canadians is Membership Rewards (MR) by American Express. MR points excel in pretty much every metric: they are extremely easy to earn, they offer very good value on the redemption side, and as a transferable points currency, the flexibility they provide is unparalleled. I want to provide an overview of the Canadian MR program and go over its many strengths, in order to demonstrate why, if you had to pick one rewards program in Canada to concentrate on, Amex Membership Rewards should be a no-brainer.
Membership Rewards points are some of the easiest points to earn in the Canadian miles and points landscape. To begin with, the four Amex cards in the MR family (which I touched upon in the Intro to Credit Cards article) all offer very compelling signup bonuses and referral bonuses. You can refer to the chart I made in the Intro to Referrals article for a detailed side-by-side comparison.
In my opinion, these bonuses blow other Canadian credit cards out of the water. First off, no other Canadian financial institution offers referral bonuses, so the fact that you can earn up to 25,000 MR per referral with Amex (if you're a holder of the Business Platinum card) is already stunning.
Then, have a look at the signup bonuses. The lowest signup offer of the bunch, that of the Gold Rewards Card, is currently up to 30,000 MR with the first year free. The highest signup bonus is a whopping 75,000 MR on the Business Platinum Card. These easily outshine the bonuses offered by other Canadian banks, where you'd be lucky to find an signup offer of just 25,000 points.
Now let's look beyond the bonus offers. What about the return you get on your spending? Here, again, the MR program is outstanding. Depending on the specific card you hold, the earning rates are as follows.
||MR Earning Rate
| Gold Rewards Card
||• 2 MR per dollar spent at gas stations, grocery stores, drug stores, and travel purchases (flights, hotels, etc.)
• 1 MR per dollar spent on all other purchases
| Business Gold Card
||• 2 MR per dollar spent at up to three "business merchants" of your choice from a pool of over 40 merchants
• 1 MR per dollar spent on all other purchases
| Platinum Card
||1.25 MR per dollar spent
| Business Platinum Card
||1.25 MR per dollar spent
As you can see, the earn rates are very compelling, especially if you hold more than one MR-earning card. For example, if you held the Gold and Platinum cards, you'd use your Gold card at the 2x-earning categories and the Platinum for everything else in order to maximize your return.
Does Amex MR stack up just as well on the redemption side of the game? After all, it would be no good earning 2 MR per dollar spent if one MR point were worth, say, less than a dollar. Then you'd be much better off just using a 2% cashback card.
Fortunately that's not the case, and the Membership Rewards program offers outstanding redemption opportunities as well. This is primarily because it's a flexible, transferable rewards currency.
You can transfer your MR points at a 1:1 ratio to the following frequent traveller programs:
- British Airways Executive Club
- Hilton HHonors
You can also transfer your MR points to the following programs at less than parity:
- Alitalia MilleMiglia (1:0.75)
- Cathay Pacific Asia Miles (1:0.75)
- Delta SkyMiles (1:0.75)
- Etihad Guest (1:0.75)
- Starwood Preferred Guest (1:0.5)
The benefit of a transferable points currency is that it drastically broadens the set of options available to you. Each frequent flyer program has its sweet spots, and transferable points currencies allow you to optimize these sweet spots to get your desired travel plans at minimal cost. We will eventually discuss the sweet spots of each program in more detail, but for now this concept is best illustrated with the following example.
Flexibility Is King
Let's say that a traveller wants to do a tour of Asia this summer, visiting Beijing for a week, Hong Kong for a month, and Seoul for another week before flying back to Vancouver. During her one-month stay in Hong Kong, she would also like to visit her friend in Taipei for his birthday, and stay a few days there. Since she's an avid points collector, she'd like to travel in business class.
If you've been following the blog, you'll be thinking at this point: "Stopovers! She can use stopovers!" Indeed, our traveller could leverage Aeroplan's generous stopovers allowance to stop in Beijing, Hong Kong, and Seoul all for just 110,000 Aeroplan miles in business class.
But what about the side-trip to Taipei? The allowed stopovers have all been used up, so our traveller would have to make a new booking. But lo and behold – Aeroplan charges a hefty 80,000 miles in business class for round-trip flights within Asia. Faced with the prospect of spending a sinful quantity of miles on such a short flight, our traveller would probably just purchase a cash ticket instead for the Hong Kong–Taipei portion of her trip.
Now what if we imagine instead that our traveller only participated in the British Airways Executive Club program, perhaps as a cardholder of the RBC British Airways Visa Infinite? Then, because the program is distance-based, the short Hong Kong–Taipei flight would only cost 18,000 Avios round-trip in business class (on Cathay Pacific, a world-class airline, no less).
However, the Avios program doesn't have the generous stopover rules that Aeroplan offers, and so the rest of the trip – Toronto to Beijing, Hong Kong, and Seoul – would cost our traveller a ridiculous number of Avios (upwards of 150,000, depending on the routing!)
Can you see where this is going? That's right... our traveller would be best off if she had a stash of Membership Rewards points! She could transfer 110,000 MR to Aeroplan and book the trans-Pacific flights with her desired stopovers, and then transfer 18,000 MR to British Airways Executive Club to book the side-trip to Taipei.
Her overall cost is 128,000 MR, which would fully meet her travel needs for the summer, whereas an equal number of solely Aeroplan miles or Avios wouldn't even come close to doing so.
||Total Points Required
Now you may think the above is a rather contrived example, but believe me, the need to be flexible across different points programs arises more often than you'd think, especially when you factor in award availability!
Another benefit of earning transferable points is that you are more protected from devaluations. It's important to realize that any company can unilaterally change the rules of their loyalty program at any time.
If you hoarded a bunch of Aeroplan miles, and Aeroplan changed their reward chart overnight to make redemptions a lot costlier, you'd have no recourse at all, and would probably be quite upset.
But if you amassed MR points instead, you'd be slightly less affected by such a change, because you'd still potentially have many other avenues to redeem your points for good value.
Other Ways to Redeem
Rather than transferring your points to frequent traveller programs, there are a few other ways you can redeem your MR points. However, none of them offer particularly great value, so I'm going to be a bit guilty of glossing over them.
One of the unique alternative ways to spend MR points is the Fixed Points Travel scheme that Amex recently introduced. Basically, you can use a fixed amount of points towards the base ticket price of a regular cash ticket (up to a certain maximum). The number of points required and the maximum ticket price depends on the geographical region you are visiting (you can only originate in North America).
The trouble with "fixed points" schemes like this is that the value you get from your points is also fixed. And in this case – let me save you the trouble of scrutinizing the program terms – that value is not good: at best, you'll be getting a 2% return, which means you're breaking even with a 2% cashback card. In other words, you've gone through a whole lot of trouble for no real gain. Avoid!
The same is true for some of the other ways to redeem points: offsetting your purchases at a 1% rate (100 points = $1), redeeming for gift cards and merchandise, etc.
If you're serious about maximizing your travel rewards, you'll be keenly aware that some ways to use your points are better than others. In general, the best and only redemption method you ought to be considering is transferring to frequent traveller programs, where you can easily extract very good value from your MR points.
Membership Rewards is in my opinion the strongest rewards program in Canada. Points are easy to earn, and Amex continues to eagerly offer generous signup and referral bonuses. Meanwhile, the program's wide array of transfer partners allow you to piece together your travel plans through several frequent flyer or frequent hotel guest programs.
Of course, the game doesn't end here. Keep an eye out for upcoming guides of a similar ilk, focusing on other major Canadian miles and points programs, to find out what happens after you've transferred your MR points.