How Does the American Express Card Compare With Other Miles Cards?

Dear Tim,

How does the American Express card compare to the AAdvantage and Go Miles cards per your recent article on mileage-earning bank cards versus airline-affiliated credit cards?

Frank B.

Dear Frank,

The American Express cards (and the Diners Club card) differ from both airline-specific cards and bank cards. For lack of a generally accepted name for the category, I call them multi-program cards. These cards are best for consumers who want to earn points that are convertible into miles in multiple programs.

To keep matters simple, and relevant to those whose priority is travel awards, we’ll focus on those American Express consumer cards that are automatically linked to the American Express Membership Rewards program, such as the Preferred Rewards Green Card, the Preferred Rewards Gold Card, and the Rewards Plus Gold Card.

On the earning side, cardholders receive one Membership Rewards point for every dollar charged. That ratio is pretty standard across all rewards credit cards. American Express sweetens the pot by offering double points for purchases at stand-alone supermarkets, gas stations, drugstores, the U.S. Postal Service, and for wireless phone bill payments.

What particularly endears AmEx cards to frequent travelers is the reward side of the program. Cardholders can redeem Membership Rewards points for miles in 11 airline programs (including Continental, Delta, Hawaiian, and US Airways) and points in the programs of four hotel chains (Best Western, Hilton, InterContinental, and Starwood). In most of the airline programs represented, one Membership Rewards point equals one airline mile. So effectively, the AmEx cards earn one mile per dollar, the same rate as cards affiliated exclusively with single airlines.

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The price to be paid for the flexibility afforded by the American Express card is a relatively high annual fee, ranging from $110 for the Preferred Rewards Green Card to $150 for the Rewards Plus Gold Card.

While the AmEx cards were once the gold standard of multi-program cards, the Diners Club card can now make a strong claim to the top spot.

The Diners Club card set the standard for convertible points for many years, allowing Diners Club Rewards points to be exchanged for miles in 25 airline programs—more than twice as many program partners as American Express has. More importantly, the Diners list includes the programs of major U.S. carriers conspicuously missing from the AmEx partner roster, including Alaska, American, America West, Northwest, and United.

Until recently, the Diners card had one notable flaw: It was accepted at a very limited number of merchants. Diners recently solved that problem by partnering with MasterCard, allowing Diners Club cards to be used at any establishment that honors MasterCard (approximately 24 million locations). American Express doesn’t release merchant-acceptance numbers, but it is generally believed that its network is far smaller than Diners’.

The basic Diners Club charge card comes with a $95 annual fee.

To summarize, multi-program cards are like airline-affiliated cards insofar as they allow cardholders to earn miles in airline programs. And like bank-issued travel rewards cards, which allow miles to be redeemed for flights on almost any airline, they offer users expanded award options.

But because of their high annual fees, compared to both airline and bank cards, consumers should carefully evaluate the value delivered by multi-program cards before committing.

If earning points that are convertible into multiple programs is a priority, by all means consider a rewards card from American Express. But for the same reasons (and for its extra features), be sure to consider the Diners Club card as well.