New Amex Membership Rewards Cashout Option

Rather than cashing out American Express Membership Rewards through Charles Schwab or Morgan Stanley Platinum cards, business owners can now cash out Amex Membership Rewards at a comparable value of one cent per point.

Rough transcript:

Thanks for tuning in to the Hurdy Gurdy Travel Podcast. I’m your host, Justin Vacula, here to help you travel the world at next to no cost through credit card points, miles, benefits, and rewards. Make money, save money, and take advantage of great deals! 

Thanks for joining me for podcast episode 64: New Amex Membership Rewards Cashout Option. Rather than cashing out American Express Membership Rewards through Charles Schwab or Morgan Stanley Platinum cards, business owners can now cash out Amex Membership Rewards at a comparable value of one cent per point.

About two weeks ago, I opened an American Express Business checking account, depositing slightly more than $5000 to gain a limited-time bonus of 20,000 Membership Rewards – at least $200 in value. I must also keep $5000 in the account for 90 days and make ten qualifying transactions to gain the bonus. In addition to the bonus 20k Membership Rewards, the no annual fee checking account has exciting features, most notably the ability to cash out Membership Rewards earned from personal and business credit and charge cards.

The business checking account application was easy. I applied under this podcast’s LLC and submitted an EIN letter. I was auto-approved and received an e-mail stating a debit card would be shipped. Funding the checking account was also easy. The business checking account appeared in the same log-in as my other American Express cards, although it does not appear to show in the Amex mobile app.

Prior to the release of this new checking account cashout option, many Amex cardholders looking to cash out points reluctantly held onto either the Charles Schwab Platinum card or the Morgan Stanley Platinum card, maybe both. Both Platinum cards, offering the option to cash out Membership Rewards, are huge wins in year one, considering welcome offers and benefits, but years two and beyond are not so appealing, especially if Amex doesn’t offer cardholders retention offers that help offset the annual fee.

For some math, because America loves math, concerning whether to keep Amex Platinum cards, listen to episode 61 I released in December of 2021. If using all or most of your American Express Platinum benefits, it can make sense to pay annual fees in years two and beyond, but for some cardholders it is a close decision and a bit of effort is needed to get value from credits. Some bit the Amex annual fee bullet recognizing that they weren’t coming out far ahead of the benefits, but valued the cashout option on cards like the Charles Schwab Platinum.

More recently, since I released that episode in December of 2021, I’ve found less value in the $200 Fine Hotels and Resorts credit because Hilton Conrad at Resorts World Las Vegas is no longer with the Fine Hotels and Resorts program. With that $200 benefit decreasing in value and now having the option to cash out points through the Amex business checking account, I may eventually cancel my Morgan Stanley Platinum card. American Express, though, has been generous with retention offers, so I’ll happily keep my Platinum cards if the effective annual fee is low and I can get good value with benefits.

The Amex Business checking debit card also gains rewards on spend, but the earning rate is low at one Membership Reward point per two dollars spent. Personally, I almost never use debit cards for spending primarily because credit cards offer better rewards, but you may, like me, find situations in which you must use debit like autopays tied to a checking account.

Maybe you’ll also meet some cashiers leading the war on happiness who insist you use a so-called real debit card to purchase a gift card even though signs in the store say that credit is permitted. Said cashiers may reference alleged store policies although they never show such alleged policies. Outstanding in-store gift card deals, though, may be worth your debit swipes. 

The Amex business debit card competes with the Point debit card that offers 1% cashback on all spending and sometimes more than 1% in certain categories. However, the Point card’s value has decreased, with promotions being rarer than usual. The Nearside Business Checking account, at least for 2022, should offer 2.2% cashback on spending. However, Point and Nearside may not work on certain platforms, so the Amex business checking debit card may come in handy.

With American Express handing out Membership Rewards like free sanitizing wipes on Delta flights, you may consider cashing out at one cent per point rather than transferring points to travel programs. Maybe you don’t plan on traveling any time soon, so cashing out can be appealing. Perhaps you want to blend a travel and cashback approach like me, so extra options to cash out can be attractive, especially if some of your travel expenses can’t be offset with points and miles. 

Suppose you’ve avoided Membership Rewards earning cards because you don’t plan on traveling. In that case, this can be an excellent opportunity to pick up cards including the Blue Business Plus and Business Gold. The Blue Business Plus doesn’t have a huge welcome offer, but its 2x Membership Rewards on all spending should be attractive to most, especially high spenders who value Membership Rewards at more than one cent per point.

As I’ve said before in many episodes, so-called everyday spending, especially for low spenders, doesn’t add much to the rewards picture compared to lucrative welcome bonuses that come from applying for multiple cards over time. Some go astray when they prioritize return on category spend and pass up large welcome offers and good benefits. Look at the big picture rather than the few percent coming from returns on spending. Ideally, you’ll get cards offering good return on spend, good benefits, and big welcome offers.

The Business Gold Card typically comes with a high welcome offer, and its 4x Membership Rewards on spending at gas stations can be appealing. On the personal card side, the Amex personal Gold Card typically has a high welcome offer, and its 4x Membership Rewards earning on grocery store and US Restaurant categories is very appealing for those in the know.

I typically advise others to avoid Amex personal cards early on in the miles and points quest because – for many reasons – it is usually better to prioritize business cards with issuers including Chase, US Bank, and Barclays. If you’re not playing this game in a strategic manner, you’ll miss out on cards from certain issuers because of strict internal bank rules.

The Amex business cards, though, can be great additions at many points in your credit card journey because they don’t crowd your personal credit report with hard inquiries and opened accounts. When low on Amex options, you may even be desperate enough to get the Plum Card for a bonus $600 for a whopping $30,000 spent atop the 1.5% cashback on all spending. The Plum Club is always looking for more members.

The new American Express Business Checking account may be a game-changer for people wanting to cash out Membership Rewards at a good rate. Going forward, Charles Schwab and Morgan Stanley Platinum cardholders won’t have to reluctantly pay a high annual fee past year one if retention offers are low or nonexistent. Even if you don’t want to cash out Amex Membership Rewards, you can at least pick up a bonus 20k Membership Rewards for parking $5000 for a short time.

Thanks for listening, and stay tuned for future episodes.

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