I received an email newsletter last week announcing extra Bonus Points on international purchases made with American Express credit and charge cards. Under the promotion, cardmembers earn an additional 3 Bonus Membership Rewards® Points for every Rs.100 spent in a foreign currency, on top of the usual 2 base Membership Rewards® Points per Rs.100. Below is the full information about the offer.
Bonus Points on International Spends – Amex Offer
American Express Offer – Bonus Points on International Spends:
Traveling abroad becomes more rewarding with your American Express® Card. For transactions charged in any currency other than Indian Rupees, you will earn 3 Bonus Membership Rewards® Points for every Rs.100 spent in foreign currency, in addition to the regular 2 Membership Rewards® Points per Rs.100.
- Enrollment Window: 5 April 2017 to 18 April 2017
- Transaction Window: 1 May 2017 to 30 June 2017
- Maximum Cap: 5,000 Bonus Points (roughly equivalent to Rs.1,65,000 of foreign-currency spend)
- Foreign currency refers to any currency other than Indian Rupees. If using services such as PayPal, ensure the charge is processed in the foreign currency rather than INR to qualify.
- Bonus Points will be credited within 90 days from the offer end date (30 June 2017).
- Not applicable to the Jet card.
Do note that while the bonus sounds attractive, the overall value can be small once forex markups are considered. For example, consider Rs.100,000 of foreign-currency spend:
- Foreign currency spend: Rs.100,000
- Estimated markup fee: 3.5% + taxes ≈ 4% = Rs.4,000
- Total points earned: 5,000 points (2,000 base points + 3,000 bonus points)
- Estimated value if redeemed from Gold Credit/Charge cards: 5,000 × Rs.0.41/point = Rs.2,050 (≈2%)
- Estimated value if redeemed with Platinum Travel card: 5,000 × Rs.0.50/point = Rs.2,500 (≈2.5%)
- Estimated value if redeemed with Platinum Reserve card: 5,000 × Rs.0.25/point = Rs.1,250 (≈1.25%)
Even with the best redemption scenario above (Platinum Travel card at about 2.5%), the forex markup outweighs the reward value:
Net result = 4% (markup fee) − 2.5% (reward value) = 1.5% net loss
There is a possibility you may earn points on the markup fee as well, which would slightly improve the outcome, but the offer generally does not beat the default reward rates of certain premium cards that charge lower forex markup fees. If you travel internationally often, cards with lower markup fees typically offer better net value than this promotional bonus.
If you don’t have access to premium cards with low forex markups, this offer can still be useful. Just remember to enroll before making eligible transactions.
Best Credit Cards for International Transactions:
The most important factor for international spending is the forex markup. American Express cards commonly carry higher markup fees, and the extra reward points in this promotion only offset a small portion of that cost. It’s possible Amex may introduce cards with lower or zero markup fees in the future to remain competitive; in some markets, American Express already offers cards with little or no forex markup.
- Offer rating: 3/5
What are your thoughts on Amex’s Bonus Points offer for international spending? Will you enroll and use it on your next trip? Share your views in the comments.