What is the Value of American Express Membership Rewards Points?

There are three levels of Amex Rewards—Membership Rewards Express, Membership Rewards (which is what this article is focused on), and Membership Rewards First. We have blogged separately about the Express program in our post What is the value of American Express Membership Rewards Express Program Points?

The only difference between the full Membership Rewards program and its little brother, the Express program—at least from a value of points perspective—is that the full rewards program enables you to transfer your points into mileage programs at (as of press) 18 different airlines, including such well-known brands as JetBlue, Delta, Continental, Southwest, ANA, and others. Follow this link to see their full list of partners. The program also enables you to transfer points into certain hotel frequent stay programs, such as the Hilton Honors program and the Starwood Preferred Guest Program.

Key Assumptions in Estimating the Value of American Express Membership Rewards Points

If it hasn’t sunk in yet, allow me to clarify. This is one complex program to analyze! Here are some of the key assumptions that PlasticIQ has made to accomplish the task:

• If you’ve read our post on the value of the AMEX Express Rewards Program, then you’ll know the value of points under that program is estimated to be $0.0095. Since all of these rewards are also available to full Membership Rewards participants, the $0.0095 represents a floor value of Membership Rewards points. We can only go up from there.
• Of the 18 frequent flyer programs available through Amex, we evaluated 8 of them. There were some minor airlines, such as Hawaiian Airlines or Iberian Air, that we felt were too niche to usefully define the value of AMEX points. We tried to focus on the big international carriers or carriers with a major US presence that could get a lot of use from PIQ followers.
• On the hotel side, we evaluated the Hilton Honors program, Starwood, and Best Western, as we felt these were the most likely to be of use to our audience.  However, their valuations were so low relative to mileage programs that they weren’t factored into the final analysis.
• Amex provides very specific point exchange rates for each program (for example, if you transfer 1,000 Membership Rewards Points, you will receive 1,300 Hilton HHonor points). We take these varying exchange rates into account in our analysis.
• PlasticIQ assumed 80% of awards would be redeemed on Continental Airlines, the airline with the second best valuation of the 8 included below.  We allocated the remaining 20% to Airtran (the highest valued of the group).  Since Airtran requires 1 or 2 stops within the US for many routes, which can be a big turn-off for many flyers, we decided to limit the allocation of this airline’s mileage valuation in the overall mix.

PlasticIQ’s Final Assessment of the American Express Membership Rewards Program

It appears that the AMEX Membership Rewards Program has an edge over the AMEX Express Program due to the ability to transfer AMEX points into various frequent flyer programs. In fact, while AMEX points are worth around $0.0095 in the Express Program, their value increases by slightly more than 25%, to $0.0125, in the full Membership Rewards Program.

Tags: AMEX, Hotel, travel, Value of points

This entry was posted on Saturday, September 5th, 2009 at 2:36 pm and is filed under Airline Rewards Programs, Cashback Rewards Programs, Hotel Rewards Programs, Rewards Programs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.