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amexgoldcardSome big news in the travel hacking community came out yesterday about American Express – but there were a lot of headlines that I found confusing.  Some calling it a “devaluation”, some talking about Amex “changing the rules” but the truth is that it is not really either of those two things.

One of the big benefits of the bank currencies such as American Express (and Chase and even Starwood, to an extent) is the ability to transfer points into a multitude of hotel and airline currencies.  One of the big problems with building up a huge stockpile of points in a particular currency is that you can only use them on that particular brand, and if the brand has no availability or goes through a devaluation, then you’re really out of luck.

But having an account in a flexible currency can help insulate you from this.  United and Southwest go through a devaluation?  No problem – transfer points to ANA or British Airways.  Hilton has no availability?  Try IHG or Hyatt?

For American Express, the rules have long been

Points are not your property. You can’t transfer points to any other person or program account. Additionally, points can’t be transferred by operation of law, such as by inheritance, in bankruptcy or in connection with a divorce.

(Hat tip to One Mile at a Time).

But in practice, it was pretty easy to transfer points to anyone you wanted.  This would let people help other friends and family members to travel.  For example, if you have 150K Membership Rewards and your spouse has 50K, you would be able to book 2 American Airlines tickets costing 100K each, since the spouse with the extra 50K would be able to transfer some to the spouse’s AAdvantage account


a yellow sign with black textWithin the past day or so, Amex has now been cracking down on this.  Now, you can only transfer points to a frequent flyer account that has your name on it.  There is still some uncertainty about whether your entire name has to match, or just your last name, as well as with the rules perhaps being different if you try the call center as opposed to doing the transfer online.

Again, I can’t really call this a “devaluation” or a “change” since these have ALWAYS been the rules, but I can understand why people are upset since maybe the rules aren’t exactly the rules if they are not enforced.  Besides people hate change 🙂

Why the change?

Why did Amex decide to enforce this rule now? Well, there are probably a bunch of reasons, but the biggest one was probably that, as usual, a small subset of super-users ruined it for the rest of us.  Why I don’t think American Express has a real problem with people transfering points to friends and family members (such as the spouse example I shared above), what lots of people would do would be to build up huge point balances and then sell people tickets to make a profit.  This was always in theory against the terms and conditions of the program, but in practice there was nothing stopping it.

I feel like it makes sense why Amex wouldn’t want other people and businesses making profits off of gaming the system, so this is one way to stop it.

Possible workaround – Authorized Users

It looks like you CAN transfer the points to someone who is an authorized user on your credit card account.  So in the example I shared above, the spouse with the big MR balance COULD transfer points to his/her spouse’s Delta account as long as he/she was an authorized user on the Amex credit card.  This doesn’t seem to me to be a huge barrier to people using the Membership Rewards program the way Amex intends, so it seems like a pretty good compromise.

One problem is that you can’t add kids to be authorized user until I believe Age 15, so that could be an issue.

What do you think about these changes?  Will this affect how you use the Membership Rewards program?

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