What’s the Best Way to Use My AmEx Points?

Dear Tim,

What is the best way to use American Express Membership Rewards points now that Northwest and US Airways are no longer attached?

Larry T.

Dear Larry,

At one time, American Express Membership Rewards was one of two card programs considered the Swiss Army knives of mileage and points collectors. The other was the Club Rewards program from Diners Club.

In both programs, cardholders earned generic points for every dollar in purchases paid for with their cards. Those points could then be redeemed for various awards. In addition—and here’s where the cards earned their iconic status in the mileage world—the points could be exchanged for miles or points in the programs of participating airlines and hotels.

Such flexibility was virtually unheard of among the airline and hotel programs themselves. The unwritten rule was that loyalty currencies (i.e. miles and points) were not convertible—unlike monetary currencies.

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Since their glory days, both programs have shed some of their airline partners. Both have also begun imposing fees for converting points to miles.

While Membership Rewards points cannot be exchanged for miles in the programs of Northwest or US Airways, you can still use your points for award travel on either of those carriers. But you’ll have to do it through a third program.

Membership Rewards points can be exchanged for miles in Delta’s SkyMiles program. Northwest is a partner in Delta’s program, so you can cash in the Delta miles for a free Northwest ticket.

In the case of US Airways, a bit more creativity is required. US Airways’ principal U.S. partner is United, which does not participate in Membership Rewards. But US Airways is a member of the Star Alliance, which includes All Nippon Airways (ANA). ANA does participate in Membership Rewards, so you can exchange your Membership Rewards points for miles in ANA’s Mileage Club, and redeem your Mileage Club miles for award travel on US Airways.

With such contortions required to make use of Membership Rewards’ slimmed-down list of airline partners, it’s worth asking whether the American Express cards still make sense for the frequent-traveler set. For those whose primary airlines still support direct exchanges from Rewards points into frequent flyer miles—AirTran, Continental, Delta, Frontier, and JetBlue among the U.S. carriers—Membership Rewards still scores points for flexibility. Otherwise, a new card may be in order.

One option is the Starwood Preferred Guest credit card, which allows points to be exchanged for miles in the programs of about 30 airlines, including Alaska, American, Continental, Delta, Northwest, United, and US Airways. Transfer 20,000 points to receive 25,000 miles—a 5,000-mile bonus. The card’s annual fee is a modest $30, waived for the first year. That makes the Starwood credit card the leader in multi-currency flexibility—arguably the new Swiss Army knife of rewards cards.