American Express is expanding their offerings in Canada as of today with a new credit card (not a charge card!) geared towards small business owners.
Amex Business Edge Basics
The American Express Business Edge™ Card carries an annual fee of $99, although additional cards carry no annual fee.
The interest rate (see full terms) and eligibility requirements are also fairly standard. You need to be a Canadian resident of the age of majority and have a current Canadian credit file to qualify.
Purchases on the American Express Business Edge Card earn Select Membership Rewards points (similar to those earned on the consumer-focused Amex Cobalt), which can be used to book travel through American Express, redeemed for merchandise or shopping through Amazon.ca, or can be transferred to the Marriott Bonvoy or Hilton Honors programs. There are no airline transfer partners.
Purchase Category Bonuses
Like the American Express Cobalt™ Card, the American Express Business Edge Card carries a points multiplier bonus on certain purchase categories.
In this case, those categories are geared more towards business interests: you can earn 3x the Membership Rewards points on certain business essentials, including:
- Eats and drinks (restaurant, quick service restaurant, coffee shop and drinking establishments in Canada, and delivery of food in Canada as a primary business, but not including groceries)
- Rides and gas (including stand-alone automobile gasoline stations in Canada, and local commuter transportation in Canada including subway, streetcar, taxi, limousine and ride sharing services)
- Office supplies and electronics (from office supply retailers whose primary business is the sale of office supplies in Canada, or electronic goods retailers whose primary business is the sale of electronics in Canada)
You can earn up to a combined maximum of 75,000 Membership Rewards points on net purchases posted to your account annually on these categories. After that, you’ll still earn 1x on all purchases.
Presumably, also like the American Express Cobalt card, purchases will be slotted into these categories via merchant codes, though I have not yet had an opportunity to review the fine print on that for this new card. If that is indeed the case, cardholders will want to be sure that they are making their office supply purchases, for example, through an office supply store, rather than at a general retailer like Walmart or Amazon.
The bonus categories will most benefit two groups: those who do a certain amount of local business travel or client wining and dining, and office manager types who are responsible for keeping a business stocked with electronics and other supplies.
First Year Bonus – Up To 42,000 Extra Membership Rewards Points
In addition to the purchase category bonuses, getting your hands on an American Express Business Edge Card gives you an opportunity to earn an extra 42,000 Membership Rewards points in your first year.
To earn the first 30,000 bonus points, put $5,000 in purchases through the card in your first three months as a cardholder.
You will also earn another 1,000 bonus points for each month that you put at least $3,000 on the card, so to “maximize” that, you would theoretically spend an additional $36,000 on your American Express Business Edge Card in the first 12 months. That’s only an extra 1/3 of a point per $1 spent, but if you’ll spend close to that amount organically it would make sense to ensure you’re hitting the $3,000 mark each month.
As an example, if you were to max out the 3x category bonus ($25,000 in spend for 75,000 points) over the course of 9 months, spending $3,000 in bonused categories each month, you’d earn ~116,000 points in that timeframe. That averages out to ~4.3 points / $1 spent, which is a very good return.
If it were to take you the full 12 months to reach the 3x category cap, but you still spent $3,000 during each of those months, mixing in non-bonused spend, you’d earn ~128,000 points. That averages out to ~3.5 points / $1 spent, which is still a solid return for a Canadian card.
Maximize Via Bonvoy transfers
Assuming that the transfer ratio to Marriott Bonvoy is the same as on the Cobalt card (1 Membership Rewards Select point = 1.2 Marriott Bonvoy points), it could make sense for businesses to shift some spending over from the Marriott Bonvoy™ Business American Express® Card (Canada).
The Business Edge can effectively earn 3.6 Marriott points on dining and gas (meaning 1.2 miles in over 30 airline programs), as opposed to 3x with the Bonvoy card. Everyday and Marriott-specific purchases are still best maximized through the Bonvoy card, given the earning rates on that card.
Put another way, the ~116,000 points earned in the example above could convert to ~139,200 Marriott Bonvoy points. Factoring in Marriott’s transfer structure, those points earned through the Business Edge equate to ~56,000 miles in nearly 40 airline programs!
It’s always good to see credit card lines expand, so there are more options that cater to the different needs of Canadian businesses and consumers.
While there are lots of cards that offer bonuses on food, beverage, and gas purchases, fewer are focused on business supplies. If you are responsible for stocking your office with paper and pens, or are regularly placing large electronics orders, the Amex Business Edge fills that niche, and is probably well worth your consideration.
What do you think of this new Canadian business card?