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.

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.

  1. bluto said,

    Isn’t United the previous perpetrator of Starnet blocking? I am not sure I trust them enough to not bring Starnet back when things settle down after the United/Continental programs are merged. So my points will probably stay with the Amex MR program.

    Also, unless you are planning to use your MR points for premium cabin to Asia, it doesn’t seem like you are getting much in savings using Continental’s award chart versus Aeroplan’s for star alliance bookings.

    I agree that Chase’s close ties to United/Continental had something to do with the airline’s relationship ending with Amex, but I have never seen a DIP loan or exit financing agreement dictate something like this. What’s more, usually once those debts are repaid, any restrictions would evaporate. The financing relationship probably was a sign of a close working relationship between the companies, which probably resulted in some other marketing agreement that separately led to the extinguishing of the Amex/CO miles convertibility.

  2. Barry said,

    I thought Aeroplan was not that attractive anymore based on what I heard on this blog before, but I admit I didn’t read it closely.. BA has high fuel surcharges, Delta is worthless, I just don’t see keeping my points in MR without Continental.

    Assuming I was wrong about Aeroplan, to me, keeping the points there is like committing to Aeroplan. If I need to take advantage of BA availability (at extremely high YQ from the west coast), I can transfer from my Chase Sapphire card.

  3. Gary said,

    @Barry (1) Aeroplan is not as valuable as it was, but as I say on some routes it’s still attractive (eg US to nearer Europe). (2) BA’s fuel surcharges hurt, but don’t apply on all partners, eg no fuel surcharges to South America and they’re really not bad on Cathay, (3) All Nippon adds fuel surcharges but has some real award chart values that the mileage savings can be worth the $$$, eg East Coast to Middle East is going to be cheap because the chart is distance-based. Delta is NOT worthless for Air France, V Australia (with fuel surcharges), and AIr Tahiti Nui… plus Kingfisher, etc.

    Aeroplan and Delta are not as good as Continental to be sure, but there are several different options and there are no guarnatees of what the Continental award chart will look like in two years — hence my suggestion of transfer what you need to Continental, for what you will book through Continental soon, for those awards that are a good value with good availability through Continental… but not for more than that.

  4. iahphx said,

    When CO is gone, what would be the most valuable transfer options at AMEX MR? I was looking at their options the other day for a friend who is only an occasional traveller (I myself don’t do much with MR), and I didn’t see a lot of value. For most redemptions, the points are probably worth less than a penny, which is pretty lame.

  5. JA said,

    @Gary, could you please elaborate on 3(3) above, re: ANA being good value from east coast to Middle East. I have 80k MR and 130k UR and no immediate plans for upcoming travel. I gather therefore that, your advice would be to not transfer my MR points. Thanks.

  6. Gary said,

    @iahphx gotta disagree, there’s real value still in Aeroplan just not as much as before, I mean LAX-Rome is still just 90k in business. And the ANA chart can offer enough savings on some routes to make the fuel surcharges worthwhile. Plus there is some value in BA even after November. The ‘worth less than a penny’ is a bit dramatic. If not, please allow me to compensate you at a full penny an Amex point, how ever many points you can spare!

  7. The Man of a Thousand Places said,

    You are a wise man, Gary. Someday, I hope to be as smart as you. I had decided to keep my MR points with Amex, but couldn’t have articulated a rationale as thoroughly as you have. Thanks!

  8. RLC said,

    For my money I still find great value in Amtrak Guest Rewards points and many times have transferred Amex to Continental to AGR. This may mostly only make sense for those living in the Northeast Corridor but AGR provides real value between DC and Philly or New York, as well as the auto train and other redemption opportunities.

  9. Emajy said,

    Since I always need double points to get me where I need to go on CO I have decided to stay with Amex and get my 20% point rebate. Should be cheaper in the long run and I get miles for those trips.

  10. pawtim said,

    So, you mention most of the continents,

    [I]Continental is generally good for Europe and Asia, not so good for South America, Australia, or the South Pacific.[/i]

    But how about Africa? OneWorld is ridiculous for Africa, because of BA’s crazy fees, and SkyTeam isn’t bad, but how about CO/UA for Africa trips? Seems like there are pretty good redemption options on LX, so I’m thinking if Africa is a priority, maybe transferring to CO is a good idea.

    Am I wrong? I’d like to know what you think about Africa. (By the way, I travel in coach, if that makes a difference. I’d rather bring a friend with me than go solo but J or F.)

    Thanks.

  11. Barry said,

    Good points Gary.

    I think being on the West Coast has a slightly different slant to some of the awards structure. Also, I have about 250k Delta miles for that return to Polynesia! (And 150k Chase Sapphire points should the partner deals on BA survive the upcoming changes).

    I guess I want a warchest of Continental Miles for those aspirational first class trips.

  12. Gary said,

    @pawtin Continental *is* good for Africa

  13. Ram said,

    Excellent analysis of the different options available to the holders of MR points. Ultimately, when and to which airline program you transfer the MR points to, depends on your travel destinations/habits. Individual choices may vary a lot.

  14. iahphx said,

    Thanks for the suggestions. As I said, I’m looking at the value of MR from the perspective of a “casual” flyer — someone who doesn’t have plans to travel the world, and wouldn’t have enough miles to do so anyway (I think she has about 55,000 points).

    That would have been enough to get her a first class domestic ticket on CO (a waste to me, but it’s not me), but that’s probably not a realistic goal on their remaining DL partner. I haven’t thought of the Amtrak conversion, but does that still work if you’re not an active Amtrak user? Outside of air travel, I don’t see much real value. BTW, is there a real “black market” where she could transfer her points for cash. If it were reliable, I’m sure 1.2 cents/mile would seem very attractive to her.

  15. ffi said,

    Transfer all to CO. I did. Several issues. This is for life. Amex transfer option will not come back.
    Second, UA/CO miles have more power in future, i.e., Miles upgrades will OUTRANK SWU/CR1 and UDU (now called by new names). Instead of asking friends and family, you can get your own upgrade most of the time.
    You can get oneways on UA/CO and AA, so your award options are greater than with Aeroplan.
    You have to have a Chase Sapphire or UA card in future to bulk up your UA/CO account.
    Lastly with the Premier Gold rewards, you can get 3 miles on travel and a 15k boost for spending 30k in a year, so you can refill your Amex account easily.
    An Amex Plat charge / Hilton Surpass (for Priority Pass), Amex SPG and a Chase Pres Plus card will do for almost all lounges.

  16. susan said,

    i’m confused, if i leave them at AXP, I can still use them via AXP, right? so why transfer them? also, can you trade them in at AXP for cash?

  17. Don said,

    I dumped my last Mem REw 135k in Continental today
    and borrowed another 15k from MR lending program
    There isn’t one other partner that really interests me that brought me to 500k in my combined United/Con account.Considering there will be less likely the kind of promotions with the blah Chase United Visa I saw this as a last chance opportunity to beef up my account even though I have a terrible trust with United delivering a fair supply of award seats.However I consider Delta and US scare worse as they have no one way awards and their lack of availability worse typically
    Hopefully I made a wise choice as its final now!

  18. Marriott Eliminates All-Inclusive Rewards With No Notice Whatsoever - View from the Wing said,

    [...] examples of how to do this right are all around us. We had a full year’s notice of American Express’ relationship with Continental terminating. And that was fully expected, [...]

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