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Let me start off that, yes, there was a lot of buzz about the launch of the NEW American Express Cobalt Card, so the anticipation for it was big. Now American Express has officially launched Cobalt and all I can say is this is a game changing card.
The American Express Cobalt Card was the first card in Canada to offer up to a 5% return that isn't limited to the first few months of having the card. This card is targeted towards Millennials but that doesn't mean people outside of that generation shouldn't look at the card. I'm not a Millennial and will be getting the card. Same goes for my wife. There's two people outside the target market who will be grabbing the card.
Sign up Features
Right now the American Express Cobalt Card comes with a limited time sign up bonus of up to 45,000 Membership Rewards points. One might ask how can a card company avoid people taking advantage of such a big bonus with only a small monthly fee and someone cancelling the card? You make the bonus monthly, that's how! Simply putting $500 in spending on your card during a billing cycle will net you 2,500 Membership Rewards Points for the first 12 months. Ideally then you need to spend $6,000 in the first year (12x$500) to earn 30,000 points. If you miss out on $500 spending in any of those first 12 months you will miss out on the bonus for that month, so it is key you keep on top of your spending and make that $500 per month for those first 12 months.
Limited time offer:
The American Express Cobalt Card charges $10 per month for having it which equates to an annual fee of $120.
The card earns Membership Rewards points like other proprietary American Express cards and has category multipliers on the types of purchases that many Millennials make:
5 Points per dollar spent at eligible restaurants, bars, grocery stores and food delivery in Canada
2 Points per dollar spent on eligible transit & gas purchases in Canada and eligible travel purchases.
1 Points per dollar spent on all other eligible purchases.
The above points are awarded on eligible spend. The category multipliers will be awarded on spend made globally so long as the merchant is classified/categorized with the proper merchant codes.
The American Express Cobalt Card comes with a modified version of Membership Rewards. It has the full Use Points for Purchases option, the Fixed Points Travel Programs and includes the hotel portion of the Frequent Traveller Participants. This means there is no direct conversion to the # of airlines that partner with Membership Rewards.
If you redeem using the Use Points for Purchases option, you will get a $10 credit towards every 1,000 points redeemed for a travel purchase. This means the purchases you make on food and drinks will equate to a 5% return. Redeeming for non travel purchases? You'll get the $7 credit for 1,000 points which means you can max out at a 3.5% return on the card which is still really strong compared to lots of the cash back competitors the card has.
Moving on to the Fixed Points Travel Program, the card provides great value here as well. Being able to earn up to 5 points per dollar means you can be flying for as little as $3,000 in spending on this card!
From the chart above you'll see you only need 15,000 points for popular short haul round trip flights. Make that spending with 5x multipliers and you have that ticket for only $3,000 in spending. You will not achieve that with any other card in Canada. Even business class to Europe is an amazing deal, only $28,000 in spending at 5x points gets you that round trip flight to Europe. Compare this to nearly double that for most other cards in Canada that allow you to redeem for business class. The Fixed Points Travel Program has proven to be a large success for American Express and that is just going to explode with this card!
Finally, another huge and I mean huge benefit to the redemption side of this card is the ability to convert to Membership Rewards Frequent Traveller participants. This is where the modified version Membership Rewards is key. The only Frequent Traveller participants tied into the Cobalt card are the hotel partners, the airline partners like Aeroplan or British Airways are excluded. That's OK and here's why:
When you convert to Marriott Bonvoy, which is one of the two hotel transfer partners you'll get 6 Marriott Bonvoy points for every 5 Membership Rewards Point transferred. As we know the Cobalt card earns up to 5x points on purchases which means you'll get up to 6 Marriott points per dollar spent on this card. Once again, no other card provides such a great Marriott earn rate! Then within Marriott you have the option to convert to 40+ airlines and when you convert 60,000 points at a time Marriott kicks in an additional 5,000 miles. For example convert 60,000 Marriott Bonvoy points to Aeroplan and you'll get 25,000 miles. That means this card has an effective per dollar earn rate of up to 2.5 Aeroplan Miles, British Airways Executive Club Avios, and so on! Once again no other card offers a potential earn rate on airline miles like this!
The other hotel option is Hilton Honors and offers a 1:1 conversion rate from Membership Rewards. Again this card has the potential the best Hilton Honors points earning card for Canadians.
Features and Benefits
As with all American Express Cards the card comes with American Express Invites which includes Front Of The Line® Advance Access, Front Of The Line® Reserved Tickets, Front Of The Line® E-Updates, Special Offers & Experiences for all Cardmembers and Social Access for all Cardmembers.
The card comes with a pretty strong insurance package that includes Emergency Medical Insurance (Out of province/country), Car Rental Theft and Damage Insurance, Lost or Stolen Baggage Insurance, Hotel/Motel Burglary Insurance, Flight Delay Insurance and $250,000 Travel Accident Insurance.
What is good about this card
The full time earn rate of five points per dollar spend on food and drink is absolutely to die for. This translates to a 5% return if you redeem for any travel purchased on that card. No other card provides a full time 5% return. No to mention you get the 2 points per dollar for travel, transit and gas. Once again that keeps the card at a similar or better earn rate on those categories than its competitors.
The sign up bonus is another strong point, 30,000 points is worth a minimum of $300 towards travel or even a $20 cash back equivalent if you redeem for a non-travel purchase.
What is not so good about this card
As many of you know American Express has lower acceptance than Visa or Mastercard so there will be occasions where you cannot use this card to pay for items. Depending on where you live or travel, American Express does state that they are accepted at roughly between 80 and 90% of locations that take the other two brands of cards.
Lastly, some people may not like that the card does not have any Trip Interruption or Trip Cancellation insurance. While valuable when needed they are some of the least needed of insurance benefits provided by card issuers
Who should get this card
Credit cards in Canada have been inching their way up to offering higher standard category bonuses and this card takes that to a level by a whole percent over its competition. American Express has done their research and made a card that is great for the next generation. They've taken what they already do good with, rewards, and made them even better with this card. The combination of great earning potential, a large sign up bonus, awesome redemption options and a decent insurance package make this card an all around winner. Many of our rankings, ultimate wallets and more will change or need to be updated thanks to this card, and that isn't meant as a negative thanks. It's about time a Canadian card issuer had the balls to make a card with such strong earning potential not a limited time thing, rather something to reward you all the time. If you don't have an Amex card in your wallet or even if you do, this is one you should strongly consider adding. I am. My wife is. And I know many others will. It may be targeted to Millennials but there will be many a Gen Xer and even some Gen Zers who will be getting the card, and why not? Five points per dollar on the utmost necessity of Food and Drink? It's a no brainer.
American Express Cobalt Card on
Other cards to consider if you are looking at this card:
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