Thursday, June 04, 2020

For many years, American Express (Amex) has dominated the credit card industry because of its customer service, security features, and consumer protection policies. In addition, Amex cards earn Membership Rewards (MR) points, the most used and sought after point programs for frequent flyers because of their redemption flexibility and the ease with which cardholders could transfer them into a multitude of airline and hotel programs.

But recent partnerships by CITI and Chase Bank have cut into Amex’s domination of the point redemption industry. In 2011, Chase announced a new partnership with United Airlines, which allowed Chase Sapphire Preferred and Ink Bold cardholders to use UltimateRewards points for flights offered by United or any other Star Alliance member. And in July, CitiBank announced that Citi Thank You Points would now be transferable into eight airlines and hotel programs.

An altogether separate reason why Amex points were so beloved by cardholders was their ability to be transferred into spouse’s airline accounts and even into airline accounts not associated with cardholders. But this was by practice rather than by rule. Amex’s terms and conditions had always stated that you can only transfer MR points into frequent flyer accounts in your own name. And although cardholders earned these points by virtue of their personal spending, Amex’s terms and conditions state quite clearly: “Points are not your property. You can’t transfer points to any other person or program account.” And now it looks like American Express has finally started enforcing the rules, and MR points can now only be transferred to frequent flyer accounts with your name on it (or at least your last name).

We certainly can’t blame American Express for enforcing the rules they’ve long published, especially since Amex claims that it is no longer allowing this feature as a security measure, to protect points from being transferred into another’s frequent flyer account without permission.

There is still a way for Amex users to transfer Rewards points by adding a primary cardholder or an authorized user. So, if you plan to transfer Amex points to someone other than yourself or a family member with the same last name, adding an authorized user is the only way you can now do so.

With these new changes and the increased competition by other credit card companies, it looks like we may be experiencing the end of the Amex domination era, and the end of a great convenience that’s existed for many years. However, the credit card redemption industry is constantly changing and in a state of perpetual motion. Stay tuned, who knows what the future may bring….