American Express Membership Rewards changes of April 2019

On 15 April 2019, American Express reshaped its Australian Membership Rewards programme. Three separate points currencies were merged into one, and the rate at which those points converted into airline and hotel currencies was cut for almost every partner. For members holding a large balance, it was the sort of change that halved the usefulness of that balance overnight unless they acted before the date.

This page sets out what changed, why it happened, and the decision framework that applied at the time — much of which still applies whenever a flexible points programme announces a devaluation.

What actually changed

Two things happened at once.

First, the different varieties of Membership Rewards points — Ascent, Ascent Premium and Gateway — were consolidated into a single unified currency. Before this, the variety of points you earned depended on which card you held, and each variety converted to partners at a different rate.

Second, the transfer rates to most partners were reduced. The consolidation and the reduction were part of the same exercise: every card member ended up on the same conversion rate, and for most of them that rate was worse than what they had.

Transfer rates for Ascent and Ascent Premium points

Transfer rates for Gateway points

The pattern is clear enough. Ascent collectors — typically holders of the Platinum Charge and Platinum Edge cards — took the heavier hit, losing half the transfer value of their balance. Gateway collectors, such as Explorer and Essential card members, lost about a third. Marriott was the single exception, having already had its transfer rate reduced the previous August.

Fixed-value redemptions through American Express Travel moved in the same direction. Points had been worth one cent each for Ascent and three-quarters of a cent for Gateway when used that way; after the change, half a cent.

Some Platinum Charge and Centurion card members received an individual offer to double their points balance at the changeover, which preserved the value of their points. These offers were not uniform, and members who did not receive one could not obtain one by asking.

Why it happened

The trigger was regulatory rather than commercial whim. The Reserve Bank of Australia's interchange reforms capped the fees card providers could charge merchants, which shrank the pool of revenue funding rewards programmes across the market. Several issuers had already devalued in response; Westpac's Altitude Rewards changes in late 2018 were part of the same wave.

American Express was not caught directly by those caps in the way the four-party schemes were, but the surrounding market moved anyway. Amex cut its own merchant fees to improve acceptance among Australian retailers — a longstanding weakness for the card — and a lower merchant fee leaves less margin to buy points with. Where a rewards programme is funded by merchant fees, sustained pressure on those fees eventually reaches the points.

What members were advised to do

The advice at the time was blunt: move your points out to at least one partner programme before the deadline, because doing nothing meant losing a third or a half of their transfer value for no benefit.

That leaves the harder question of where to send them. The framework that applied then still works today.

1. Decide where you want to fly. Pick three programmes that could plausibly get you there.
2. Check what those programmes actually cost. Award availability on the route, the points price, and the taxes and carrier surcharges attached.
3. Look at what you already hold. Points scattered across six programmes are rarely enough for anything in any of them.
4. Transfer accordingly, keeping in mind that airline transfers are one-way and irreversible.

How the partners compared

"Hard expiry" means points disappear after a fixed period — three years, say — regardless of any other activity in the account. "Soft expiry" resets the clock whenever you earn or redeem, which is materially more forgiving.

Among Point Hacks readers at the time, the three most common destinations for transferred points were KrisFlyer, Asia Miles a close second, and Velocity third. For members who genuinely did not know what they wanted to do with the points over the following few years, Velocity was the pragmatic choice, largely because of the soft expiry.

Matching the programme to the trip

• Within Australia: Velocity or Etihad Guest for Virgin Australia; Emirates or Qantas for Qantas flights
• Europe: Asia Miles, with KrisFlyer as the pricier alternative
• Mainland United States: Asia Miles for Qantas and American Airlines; KrisFlyer for United
• Hawaii: Velocity, for Hawaiian Airlines
• Canada: KrisFlyer, for Air Canada
• South America: Asia Miles, for LATAM or Qantas
• Asia: KrisFlyer or Asia Miles, for Singapore Airlines or Cathay Pacific
• Japan: Asia Miles, for Qantas or Japan Airlines

One piece of advice ran through all of it, and still does: do not cash flexible points out for gift cards or merchandise. The value per point in those channels is poor compared with a premium-cabin redemption, and it was poor before the devaluation too.

Transferring under deadline pressure

In the days before the change, American Express's transfer partners page suffered repeated technical problems, which is predictable when a large number of members try to empty their accounts at once. Members who could not complete a transfer online had a few options: a private browsing window, a different browser, the live chat function inside the American Express account area, or a phone call to card services — all available around the clock.

The lesson is to leave a buffer. A large transfer attempted on the final day of a devaluation window leaves no room for an outage, a verification hold, or a transfer that takes longer than expected to land.

What did not change

Card benefits outside the points economics were left alone: travel credits, lounge access, complimentary flights and insurance carried on as before, and points caps were removed for Platinum card members. Airline co-branded cards — the Qantas and Velocity American Express products — were affected differently, because their points go straight to the airline programme rather than through a transfer rate.

Frequently asked questions

What were Ascent, Ascent Premium and Gateway? They were the three varieties of Australian Membership Rewards points, each attached to particular cards and each converting to partners at a different rate. From 15 April 2019 they were consolidated into a single Membership Rewards currency.

How much value did members lose? Members holding Ascent points lost roughly half the transfer value of their balance; Gateway holders lost about a third. Marriott transfers were the exception, remaining at 3:2.

Did the change affect points already sitting in an airline programme? No. Points that had already been transferred to a frequent flyer or hotel programme before the deadline converted at the old rate and were unaffected.

Why did American Express devalue the programme? Regulatory caps on merchant fees reduced the revenue available to fund rewards across the Australian market. American Express cut its own merchant fees to broaden acceptance, and lower merchant income means fewer points can be bought.

What is the difference between hard and soft expiry? Hard expiry removes points after a fixed period no matter what you do. Soft expiry extends the life of every point in the account whenever you earn or redeem, which makes a balance far easier to keep alive.

Which programme was the safest default? For members without a specific trip in mind, Velocity was the common recommendation, chiefly because of its soft expiry and ease of domestic redemption rather than any outstanding premium-cabin value.

Can transfers to airline programmes be reversed? No. Transfers out of a flexible programme into an airline or hotel currency are one-way, which is why it pays to decide on a destination before moving a large balance.

What happened to fixed-value redemptions through American Express Travel? The value per point for travel bookings made directly through American Express fell to half a cent, down from one cent for Ascent points and three-quarters of a cent for Gateway points.

This information is general in nature. It does not take your personal circumstances into account.