Is Redeeming Amex Points For Upgrades A Good Deal?

American Express has rolled out a new feature this week that sounds like it could be exciting, though if you’re looking to maximize your points, I wouldn’t recommend taking advantage of this. Let me explain why.

Amex now lets you redeem points for flight upgrades

American Express has launched a new feature called Upgrade with Points, which is in partnership with Plusgrade.

For those of you not familiar with Plusgrade, it’s a technology platform that quite a few airlines use to let you bid on an upgrade. The idea is that airlines often have empty premium seats that would go out empty, so last minute the airlines might as well let passengers bid on them, so they get some revenue from those empty seats.

If you’ve ever booked a ticket and have received an offer to upgrade for cash, there’s a good chance Plusgrade was behind it. They work with over 20 airlines, to allow you to upgrade to first class, business class, and premium economy.

This new feature is available to those with eligible US consumer, business, and corporate cards that are enrolled in the Membership Rewards program. You’ll be able to redeem points, cash, or a combination of points and cash, to get an upgrade.

Amex says that they are the only major US credit card loyalty program to offer card members the opportunity to redeem points directly to upgrade their flight using credit card loyalty points.

How Amex Upgrade with Points works

In order to use the Upgrade with Points Amex feature:

• Visit the Upgrade with Points section of membershiprewards.com
• Select the airline you are booked with
• Enter your reservation details to see if your itinerary is eligible to upgrade
• If eligible, use Membership Rewards points, or a combination of points and dollars, to place an offer towards an upgrade
• Your offer will be accepted or declined by the airline, usually within 5 days of your flight; whatever the airline’s decision, American Express will communicate the result to you via email prior to your departure
• If your offer was accepted, visit your airline’s website or call your airline to obtain a copy of your updated itinerary

Eligible airlines for Amex Upgrade with Points

The following 21 airlines are currently participating in this program:

• Aerolineas Argentinas
• Aeromexico
• Air Canada
• Air China
• Air Mauritius
• Avianca
• Caribbean Airlines
• Ethiopian
• Etihad Airways
• Fiji Airways
• Gulf Air
• Icelandair
• Kenya Airways
• LATAM
• Malaysia Airlines
• Norwegian
• Qantas
• SAS
• SilkAir
• Singapore Airlines
• TAP Air Portugal

Why you shouldn’t use Amex Upgrade with Points

Essentially what Amex is doing here is just white labeling Plusgrade, and giving you an option to redeem points for upgrades at a fixed cost. But you’re not actually getting outsized value by using points.

Rather you’re redeeming points for a fixed amount towards what the upgrade would cost in cash (which varies by flight). So how much value are you getting?

For most Amex Membership Rewards cards, 1,000 points gets you $10 of value towards an upgrade, though the following cards get you only $5 of value per 1,000 points:

• American Express Platinum Card
• Blue for Business Credit Card
• Blue for Students
• Some Blue from American Express Cards
• Business Management Account
• Gold Optima Card
• Optima Credit Card
• Optima Platinum Card
• Platinum Business Credit Card
• ZYNC Card

So you’re getting 0.5-1 cents of value per point, which isn’t great.

Personally I value Amex points at ~1.7 cents each, so both of those amounts are way below what I value Amex points at. If this is how you’re redeeming your Amex points, then you’re simply using the wrong credit card. At that point you’re much better off using another credit card for your spending.

There are other ways to redeem Amex points for upgrades

I want to be clear, I’m not suggesting you shouldn’t redeem Amex points for international travel in first and business class. Quite to the contrary, that’s the best use of these points. Rather I’m suggesting that there are other ways to go about it.

Amex has 20+ transfer partners, and your best bet for getting value with Amex points is transferring points to one of them and then either outright booking an award ticket in first or business class, or even in some cases upgrading. You need to know what you’re doing, but that’s how you get outsized value, and not by using Plusgrade.

Bottom line

Ultimately more options are always a good thing, even though I never recommend using this. I guess we should be happy some people choose to redeem their points this way, because it allows the rest of us to use our rewards in a richer way.

This simply isn’t a good deal because you’re getting at most 0.5-1 cents of value per point, and I value those points at 1.7 cents each. Amex is simply white labeling Plusgrade and letting you redeem your points for a fixed cash value, which isn’t a great deal.