American Express has announced that its flagship lifestyle credit card, the American Express Cobalt Card, will be undergoing a transformation as of August 16, 2021.
The card will get a new earning rate of 3x MR points on streaming services, mobile device insurance of up to $1,000, and – most significantly – the ability to transfer MR points to airline partners. In exchange, the monthly fee is increasing by 30% to a reported $12.99 per month.
You can take a look at American Express’s FAQ page about the changes to learn more. While we’re still seeking clarity on some details, let’s take a look at everything we know so far.
Monthly Fee Increasing to $12.99
Let’s get the bad news out of the way first.
The Cobalt Card is unique among American Express’s product lineup, and indeed among Canadian credit cards as a whole, for charging users on a monthly rather than annual basis.
Since its launch in 2017, the card has commanded a monthly fee of $10, and this fee appears set to increase $12.99 as of August 16.
This represents a 30% increase, and a hike of the overall annual fees from $120 to $155.88. The new monthly fee will apply on the first statement following your card anniversary.
As the Amex live chat agent explains:
Effective August 16, 2021, the monthly fee for the Basic American Express Cobalt Card will increase from $10 per month ($120 annually) to $12.99 per month ($155.88 annually). The $12.99 monthly fee will be charged to your account on the first statement after your next Cardmembership anniversary following August 16, 2021, and once a month thereafter (regardless of Card activation).
For example, if your Cardmembership anniversary is November 1, your account will be charged a $10 monthly fee on each of your September and October statements. You will be charged the new $12.99 fee on the first statement following your next Cardmembership anniversary.
Thus, there’s a huge benefit to signing up for the Cobalt Card right now prior to the fee hike, since you’ll continue to pay the $10 monthly fee all the way through to July 2022, and you’ll be charged $12.99 starting in August 2022!
Nevertheless, with all Cobalt cardholders facing an eventual 30% fee increase, the key question is: are the card’s benefits also increasing by a commensurate 30% or more? I’d certainly say so.
Cobalt Card Now Earns Regular MR Points!
Following the bad news, let’s get to the downright incredible news: the Cobalt Card will begin earning regular MR points instead of MR Select points after August 16. This means that the points will now be transferrable to airline partners like Aeroplan and British Airways Avios, in addition to hotel partners like Marriott Bonvoy.
Until August 16, Cobalt cardholders are limited to either redeeming their MR Select points directly at 1cpp, booking flights via Amex Fixed Points Travel, or transferring to Marriott Bonvoy at a 1:1.2 ratio.
After August 16, cardholders will have the ability to convert these points at a 1:1 ratio to Aeroplan or British Airways Avios, as well as a 1:0.75 ratio to a variety of other frequent flyer programs.
This is a monumental change for anyone who prioritizes earning airline points over hotel points, which is a sensible strategy, given that optimized airline redemptions can usually unlock much higher value for your points compared to hotel redemptions.
Prior to this change, the best way to convert the Cobalt Card’s MR Select points into, say, Aeroplan points was one of the following:
- Transfer points to Marriott Bonvoy at a 1:1.2 ratio, and then to Aeroplan at an optimal ratio of 60:25, resulting in an overall effective transfer ratio of 1:0.5 from MR Select to Aeroplan
- Use a backdoor conversion opportunity via Air Canada’s flexible booking policy to achieve an effective transfer ratio of ~1:1, albeit at a cost
After August 16, there’s no need to worry about these conversion tactics anymore, as the Cobalt Card’s MR points will be directly transferable to Aeroplan, Avios, et al.
Remember, the star attraction of the Cobalt Card is the ability to earn 5x points on eats and drinks, which includes dining, bars, cafes, and grocery stores (where you can buy gift cards for other retailers), on up to $30,000 of spend per membership year.
At 5x the points on eats and drinks:
- A mere ~$4,000 of spending in this category would earn you a transcontinental business class flight at ~20,000 Aeroplan points
- A mere $11,000 of spending in this category would be enough to unlock a business class flight from Vancouver to Tokyo at 55,000 Aeroplan points
- Maximizing the $30,000 spend allowance for the 5x earning rate would earn you a total of 150,000 MR points per year from the Cobalt Card, already enough for round-trip business class to Europe or a luxurious First Class flight to Asia
Combined with the summer 10x offers on eats and drinks on the Platinum Card and Aeroplan co-branded cards, and I have a feeling that the lineups at grocery stores’ Customer Service desks across Canada are about to get a lot busier!
New 3x Earning Rate on Streaming Services
The Cobalt Card will get a new 3x earning rate on streaming services as of August 16, 2021. You’ll be able to earn 3 MR points per dollar spent on eligible streaming services in Canada, including:
- Apple TV+
- Apple Music
- Crave
- Disney+
- fuboTV
- hayu
- Netflix
- RDS
- SiriusXM Canada
- Spotify
- TSN
It’s awesome to see that this list includes the most popular streaming services like Netflix and Spotify, as well as a variety of other popular services like Apple TV+, Crave, and Disney+.
Simply change your streaming service’s billing information to the Cobalt Card and you’ll start earning 3x points on your monthly purchases, which will now get you closer to the next airline redemption in addition to your next hotel stay.
To summarize, the Cobalt Card’s complete earning structure after August 16 will look as follows:
- 5 MR points per dollar spent on eats and drinks
- 3 MR points per dollar spent on eligible streaming services
- 2 MR points per dollar spent on gas and transit
- 1 MR point per dollar spent on all other purchases
New Mobile Device Insurance
In another boost to the card’s value proposition, the Cobalt Card will soon offer up to $1,000 of mobile device insurance in the event that your smartphone, smartwatch or tablet is lost, stolen or accidentally damaged.
This works similarly to the mobile device insurance found on other Canadian credit cards: simply charge the full purchase price of the mobile device to your Cobalt Card, or use your card to pay for the financing charges on the mobile device, and you’ll be covered for a period of up to two years.
Mobile device insurance is becoming increasingly common as a card benefit on lifestyle-oriented credit cards, so it’s no surprise to see American Express adding this to the Cobalt Card’s overall insurance package.
Choice Card Also Now Earns Regular MR Points
Parallel to this change, an Amex representative also confirmed via live chat that the Choice Card from American Express will also be changing its rewards currency from MR Select to regular MR points.
The Choice Card has no annual fee, meaning that we’ll now have a no-fee Amex card where you can “park” your MR points.
If you’ve racked up a sizeable sum of points from, say, the Platinum Card’s offer of 150,000 MR points or the Business Platinum Card’s offer of 100,000 MR points, and you decide not to keep the cards but don’t feel like committing the points to a specific usage just yet, you should in theory be able to get the no-fee Choice Card to keep your MR points active.
Outside of this use-case, the Choice Card doesn’t carry too much appeal, given its limited earning rates and benefits.
Update: It’s been confirmed that the Choice Card will also rebrand as the American Express Green Card as part of this transformation on August 16, 2021.
Conclusion
After a year of austerity in 2020, American Express is pulling out all the stops to retake its dominant position in the Canadian credit card market in 2021.
The upcoming changes to the American Express Cobalt Card – in particular, the ability to convert points to airline frequent flyer partners – will dramatically raise the value proposition of the card and make it easily one of the best credit cards in Canada.
The increased $12.99 annual fee will be more than outweighed by the newfound ability to convert points to airlines, while the new 3x earning rate on streaming services and mobile device insurance benefits are very much the cherry on top.
With these upcoming changes set to kick in on August 16, if you haven’t yet picked up the Cobalt Card as a long-term spending option for eats and drinks, now is the best time to add some Cobalt to your lifestyle.
If you apply prior to August 16, then you’ll only pay a $10 monthly fee until your cardholder anniversary in 2022, allowing you to take advantage of the Cobalt Card’s newfound benefits while staving off the fee increase for a full year.