The New AMEX Cobalt Card – Now Available!

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Today, you can now apply for the new American Express Cobalt Credit Card. There has been a lot of buzz about this card before it was released, so here are some highlights of the card, as well as my initial thoughts. Long story short, this is an amazing credit card.

The New AMEX Cobalt Card

The New AMEX Cobalt Card

Annual Fee and Signup Bonus

The annual fee for the AMEX Cobalt card is $120. It’s charged in monthly increments – $10 at a time. There’s no fee-waiver, unlike the Gold Rewards Card (until just recently), and the Business Gold Rewards Card, which also has 30,000 and 40,000 Membership Reward bonuses, respectively. With nearly all credit cards that are launched in the Canadian market, there nearly is always an annual fee waiver, like with the TD Aeroplan Infinite Visa.

The signup bonus is 40,000 points. It’s 2,500 points per month for $500 of spend, and an additional 10,000 after $3,000 of spend in the first three months. That means, the total minimum spend required is $7,500 over 12 months. That’s not low at all. I’m a little disappointed here. Everyone says this card is supposed to target millennials. I’m very much a millennial. But this “innovative” fee structure is pretty lame. I know how to add.

AMEX Cobalt Annual Fee

AMEX Cobalt Annual Fee

A 40,000 point signup bonus with $7,500 of minimum spend required and no annual fee waiver is not an exceptional offer – when just a few weeks ago, the AMEX Gold Rewards Card was 30,000 points with $1,500 of minimum spend and first year free. If you need help with monthly spending, use PayTM, which lets you pay bills with your credit cards for free. Get $10 for using promo code PTM9462620 once you pay $25 towards a bill.

However, if this card gains traction, it’s a genius move on the part of American Express. As I mentioned in an earlier post, raising the minimum spend for a longer period of time keeps the card top of wallet – which is exactly what they’ve done. This structure forces cardholders to keep using it – for the first year, at least. What I wonder is whether this card will also negatively affect nearly all other product lines, since people will just swap cards when using American Express instead of switching over from say, Visa or MasterCard.

Category Bonuses

The category bonuses on the AMEX Cobalt card offset everything else, and are so good I would get this card even with no signup bonus. These are absolutely game-changing. There are two major bonus categories:

AMEX Cobalt Category Bonuses

AMEX Cobalt Category Bonuses

  • 5 Points per Dollar on Groceries, Dining, and Food Delivery

This category bonus is INSANE. At my local grocery store – they still pretty much all kinds of gift cards – gas, electronics, office supplies, retail, Amazon, you name it. It means that you theoretically can earn 5x AMEX points on EVERYTHING by purchasing gift cards at the supermarket. I also love that there are 5x points on dining and food delivery, as no other cards in the market have a bonus on this category at all.

  • 2 Points per Dollar on Transit, Gas, and Travel

The 2x points per dollar on gas and travel is somewhat captured by several other cards in the market. The 2x points on transit is the best category for this bonus. Depending on how wide the category is, this means Uber (and other rideshare), taxis, and public transit will earn 2x. I wonder if car-share (Car2Go) will earn double points. If they did, that would be really useful for me.

This will be the only card in Canada that earns 5x points on groceries and dining and 2x points on transit. What’s even more astounding is that there are no caps on the bonus points you can earn. One of the best cards right now for category bonuses, the Scotiabank American Express Gold and the Scotiabank Momentum Visa Infinite only allow a 4% return on gas, groceries, and entertainment for up to $50,000 per calendar year. The category bonuses will be the reason I will keep this card.

Redemptions

The points from this card are valuable too. While you can’t transfer to airline partners, you can to hotels. Membership Rewards transfer to SPG at a 2:1 ratio, so the 5x category means you earn 2.5 SPG points per dollar. This lets you easily top up your account, especially if you already have the Starwood American Express Card currently with an increased welcome bonus. The other redemption that sticks out is the Fixed Points Travel Program.

American Express Fixed Points Travel Rewards Chart - Business

American Express Fixed Points Travel Rewards Chart – Business

There are both economy and business charts where you can book any paid fare under the maximum ticket price. With the business class chart, you can get up to 1.8 cents in value per point. Since a long-haul Canada/US business class ticket costs 100,000 points, that’s only $20,000 spend at 5 points per dollar. Most programs, like Aeroplan, need 50,000 points for a roundtrip, so earning at 1.5x still means $33,000 of spend. Earning 5 points per dollar, that’s up to a 9% return at grocery stores and dining – just jaw-dropping.

AMEX Cobalt Card – Conclusion

This card might be the card of the decade. While the signup bonus is nothing special, it’s bold for a credit card issuer to go back to the drawing board and create such a stunning card product for everyday use. I’m looking forward to getting the card very soon.

Apply for the American Express Cobalt Card today!

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The Starwood American Express increased offer of 25,000 SPG points may be changing on September 27th. Grab the offer now while you can!

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Comments

  1. I really enjoy your articles, but your analysis of this card is a little schizophrenic.
    1. Long story short, this is an amazing credit card.
    2. But this “innovative” fee structure is pretty lame. I know how to add.
    3. A 40,000 point signup bonus with $7,500 of minimum spend required and no annual fee waiver is not an exceptional offer – when just a few weeks ago, the AMEX Gold Rewards Card was 30,000 points with $1,500 of minimum spend and first year free.
    4. This card might be the card of the decade.

    For me, the strong points of the card are:
    1. While mediocre, the 30k annual bonus (distributed monthly) continues for the duration of the card–according to Pointsnerd. Finally, a company that recognizes customer loyalty.
    2. Up to 5x category bonus.

    However, we don’t eat out very much and we do our grocery shopping at Superstore which doesn’t accept Amex–and there’s no way I can get my wife to switch to Sobey’s which is the only other grocery store in our area.

    This would relegate me to purchasing gift cards at Sobey’s. While effective, it also seems pretty inconvenient.

    Long story short, the Amex SPG is still looks to be a better earner for me.

    • The 30k does not continue for the duration of the card, only the first year – perhaps you should double check your source. The SPG card is much stronger for non-bonuses everyday spend for sure. Everyone’s purchasing mix differs.

  2. Just want to clarify-if the rewards program is Membership Rewards, why can we only transfer to hotel programs? MR transfers to a number of airlines no?

  3. I believe that this is a credit card. If you have two others open with AMEX, you will have to close one before this one can be activated. It has been rumoured that if you close one of your others before the first anniversary date, there is a chance that AMEX will reclaim your original signup bonus points. Is there a way around this two credit card limit ? Is the sign up bonus reclaim rumour only that…..a rumour ?

  4. You forgot to mention the point redemptions as statement credits, i.e 1000 points = $10 credit on eligible ‘travel’ purchases and $7 credit on everything else. Believe this gives the Food category a loyalty return of 4~5%, Travel 1~2% and ‘Everything Else’ 0.7~1%… you’re buying a lot of food and going for drinks quite a lot to rack up $20k in spend to get that long haul flight.

    I can see the marketing, “us millennials are already going out for food, bars, using uber eats so why not take advantage of that with this card”

  5. Lol

    Average sign up bonus, no FYF, can’t transfer to airline partners, the required Amex points are way higher than Aeroplan points for equivalent redemptions. And yet somehow this is “the card of the decade”.

    Typical blogger.

    Jeff you have zero credibility. Just a corporate schill.

    • It’s funny you say that, because I do not earn a commission or referral bonus for this card. This is the card of the decade (and I’m very happy to defend it) because of the 5x category bonus. As I said, the welcome offer is kind of lame, but the 5x with no cap makes up for everything else. The majority of my spend will only be with the category bonus – other spend will go on the Platinum or SPG cards. With 5x, this means less spending than a similar award with Aeroplan.

  6. Jeff great post. I was wondering if you could clarify the Fixed Points Travel program. For example 100,000 points gets a return ticket Canada-USA (except Hawaii & Alaska) with a price of up to $1800 Is this a base price ticket that excludes taxes and fees. What if the ticket costs $1900, can you just pay 100K points plus $100???

    The other thing is do you think there will be any referral or self-referral possibilities with this card. I know with the other AMEX cards, I have earned many extra miles by referring friends and family.

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