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Apply before August 16 for the American Express Cobalt Card… or wait?

To the point

American Express has announced several upcoming changes to the Cobalt card: points transfer, fees, new earning rate.

The American Express Cobalt™ Card is one of the best credit cards in Canada. At the beginning of July, American Express posted an information notice indicating several upcoming changes to this Card as of August 16, 2021.

A member of the Milesopedia Facebook group has asked this question: should I apply before August 16 or wait for a better welcome offer? Before answering this question, let’s analyze the changes.

Transfer to air partners

The big news in these changes is the ability to transfer American Express Cobalt™ Card Membership Rewards to airline partners like Aeroplan at a 1:1 ratio.

Previously, it was only possible to transfer points to hotel partners like Marriott Bonvoy or Hilton Honors.

This makes the card even more attractive: no other card allows you to earn so many points (5 points per dollar) for everyday purchases such as groceries or restaurants to be transferred to airline programs.

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1,000 points = $10 for all purchases

This isn’t really news, but rather a reminder that you can now use 1,000 Membership Rewards points for a $10 account credit on any purchase. And not just for travel.

Previously, we only got a $7 credit on the account. So the American Express Cobalt™ Card is as good for travel as it is for cashback: you’ll earn up to 5% cashback on everyday purchases!

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New 3 points per dollar category

American Express is adding a new purchase category to the American Express Cobalt™ Card: streaming subscriptions will now offer 3 points per dollar.

This is in response to the Scotiabank Gold American Express Card, which already offers 3 points per dollar for these types of purchases.

The following is a list of eligible streaming services:

  • Apple TV+
  • Apple Music
  • Crave
  • Disney
  • fuboTV
  • hayu
  • Netflix
  • RDS
  • SiriusXM Canada
  • Spotify
  • TSN

If you use the gift card trick, you could even earn 5 points per dollar by purchasing a Netflix or Disney+ gift card at your favourite grocery store.

Mobile device insurance

As several credit cards issuers have done in recent months, American Express is adding Mobile Device Insurance to its American Express Cobalt™ Card.

This is a welcome assurance, especially for the clientele targeted by this type of card.

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Increase in fees

The current fee is $10 per month or $120 per year. They will increase to $12.99 per month or $155.88 per year (an additional 30%).

These changes will take effect on the first statement following your card anniversary. So if you want to lock in the current monthly fee for a year, sign up for the American Express Cobalt™ Card before August 16!

This pricing with decimals is reminiscent of the price paid for some monthly subscriptions like Netflix.

Nevertheless, this is still a significant increase, but somewhat justified given the rate of earning offered by the card and especially the new possibility of transferring points to airline partners (not only hoteliers) and Mobile Device Insurance.

Apply before August 16 or wait?

If you’ve never had this card, you have two choices: applying before August 16 or wait.

We saw an enhanced welcome offer earlier this year: up to 45,000 points (15,000 points more than the current offer). At this time, I have no information as to whether a new offer will be made on August 16 or shortly thereafter.

Whether you apply before or after August 16, you’ll benefit from the Card’s enhancements (points transfer to airline partners, new 3 points per dollar earning rate for streaming subscriptions, mobile device insurance).

However, by applying BEFORE August 16, you will lock in for a full year (until August 2022) the $10 monthly fee (instead of $12.99) . A gain of $35.88.

So if you want to apply AFTER August 16 while waiting for a possible higher welcome offer, the bet is only $35.88. Unless the welcome offer (up to 30,000 points) decreases, in which case you would lose out. But I don’t think that will happen.

Conclusion

As with any change, there are winners and losers. Those who had no use for air partners will be the most impacted by these changes.

However, I would argue that adding the American Express Cobalt™ Card to the portfolio of cards that allow transfers to airline programs is great news.

If you want to keep the $10/month fee for the next 12 months, my advice is to apply for up for the American Express Cobalt™ Card before August 16, 2021! Otherwise… wait!

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