With the American Express-Continental relationship ending on September 30 (crazy to think that they gave us a full year’s notice of year, serious kudos to them!), if you have Membership Rewards points it’s worth revisiting whether to take any last minute steps to protect yourself.
Now, for me the first thing I think of is lounge access, since American Express Platinum (and Centurion) card members no longer will have access to Continental/United lounges beginning October 1. And Priority Pass Select members (which also happens to come with the Amex Platinum card) no longer get access, either. I’ll still get my lounge access via my British Midland Gold status.
And I’m not really too tinked at American Express here, either.
First, understand why the relationship is ending. Chase bank is the issuer of the co-branded credit cards belonging to both United and Continental, and will continue to issue the co-branded credit cards post-merger. They hold tremendous sway at the airline, since the co-branded credit card partner (then First USA, since acquired by Chase) provided debtor-in-possession financing for United’s bankruptcy. The bank provided the airline’s exit financing, too. And Chase pre-purchased half a billion dollars worth of miles to provide liquidity. You really can’t have a major relationship with both Chase and with American Express these days. So when Continental and United merged, the Chase relationship became stronger, and Continental couldn’t continue to play nice with Amex.
Second, American Express has been adding partners. For lounge access, they added American Airlines several years ago and US Airways in the time leading up to the expected loss of Continental. The US Airways lounge relationship doesn’t even require a same-day boarding pass on the airline. And they’ve introduced Priority Pass Select, which will get you into lounges around the world and also domestically into Alaska Airlines Boardrooms, something that the Amex Platinum and Centurion cards didn’t previously offer. So they’re trying.
They’ve added some points transfer partners, like Virgin America, but that’s really not meaningful. There are a whole lot of reasons to feel like American Express Membership Rewards is losing value, through no fault of their own, and not just because of the loss of Continental as a transfer partner.
- Air Canada Aeroplan was an amazing partner, and still is on some routes (like US to nearer Europe, just 90k miles per person roundtrip in business class). But their July devaluation was a killer for some of their best routes like US to Asia in First Class. They won’t put awards on hold and many destinations have become quite pricey.
- All Nippon now adds fuel surcharges to redemptions on Virgin Atlantic.
- British Airways is expected to announce a massive award chart devaluation in November.
These are three American Express transfer partners, whose points have gotten less valuable or are expected to do so. Which means that losing Continental Onepass hurts that much more.
If Aeroplan hadn’t devalued, I’d have said that they were usually a better option for transfers than Onepass anyway, except for places like Central Asia, Middle East, and aFrica. If British Airways wasn’t devaluing, I’d say that access to their award chart for oneworld partners was a huge benefit and reason not to move poins over to Continental.
And in fact I did advise that the option value of American Express points was too good a benefit to trade in, either for most transfer bonuses or to get over to Continental before the relationship ends.
Now the conventional wisdom seems to be shifting. The Points Guy is transferring about a third of his Amex points to Continental before the 30th. Ben Schlappig has suggested transferring at least some of your American Express points to Continental before the relationship goes away.
I’m going to push back slightly, though.
- Continental isn’t always the best place for your miles. Where you want your mileage balances does depend on the specific award you want. Continental is generally good for Europe and Asia, not so good for South America, Australia, or the South Pacific.
- American Express points will still afford flexibility. And their partners do remain strong. We don’t know what will happen, exactly, to the British Airways award chart come November. But US to Europe is actually likely to stay the same or get less expensive, depending on the specific city pairs. Aeroplan remains a good, strong option for many destinations. And there are always those juicy Delta transfer bonuses, like the current 40% transfer rebate which equates to a 67% transfer bonus, and even makes the Delta award chart not so outlandish.
- We don’t know what Continental’s future award chart will look like. Aeroplan has just devalued their chart, British Airways is about to, so we can probably count on their awards staying constant for awhile, at least a couple of years. But Continental really hasn’t done too much with theirs, only some tweaking. But goodness knows in the future there will be chart increases, there always are. I wouldn’t make all plans about future redemptions that may be years off based on the current reward chart.
So what I Would do is start by asking whether the current Continental award chart is best for your near-term redemption needs, and whether you need more Continental miles in your account as a result. And then transfer those points that you will need in that account in order to redeem those known awards. But not transfer more than that. Because the option value and hedge of having your points held by Amex, rather than in a single mileage program, remains a strong value proposition. Maybe not as strong as it was six months ago, but stronger than relying on the vagaries of a single carrier who doesn’t have the best award chart pricing to all destinations, or the best award availability to all destinations.
Consider transferring some points over if you have immediate needs, but my advice remains the same — Continental’s departure from American Express Membership Rewards shouldn’t change your behavior all that much, I wouldn’t go speculatively dumping a million Amex points over there without thinking through how and when those points will be used.