Need help with completing minimum spend? Download PayTM, where you can use credit cards for bills like property taxes, college tuition, and more! Use code PTM9462620 to get $10 after paying $25 towards your first bill. For more details, view my post.
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.
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.
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.
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:
- 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.
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.
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!