American Express has officially launched their newest card for Canada, the Cobalt Card. This card is taking a very innovative approach to the traditional way of handling the annual fee, sign up bonuses and category bonuses.
I for one am very excited to get this card because of the incredible value for spend at grocery stores, restaurants, food service establishments and on food delivery services.
All this may be a reiteration of the information I had previously posted but now that we are official, it’s better that we have everything in one spot.
The Annual Fee for the AMEX Cobalt card will be $120/year BUT it is being split on a monthly basis. This means that each billing cycle you will see a fee of $10 for the card. I don’t know about you but $10 a month is a lot easier to swallow than $120 on your first bill.
UPDATE – If you apply by January 30, 2018, you are eligible for an additional 10,000 Membership Rewards points if you spend $3,000 on the card in the first 3 months! That means you can earn 40,000 Membership Rewards in your first year!!!
The sign-up bonus is much different than what you normally see on credit cards. You actually earn 30K Membership Rewards BUT those points are earned on a MONTHLY basis and it comes with a condition. You need to spend $500 per billing cycle and if you do, you will receive 2,500 Membership Rewards. While this isn’t ideal, it’s again part of AMEX’s strategy to attract a new kind of client. So essentially, what you get is 2,500 Membership Rewards per month for the monthly fee of $10. That’s a pretty good deal in my books.
As I understand it, this deal will continue for the duration of the card, meaning that if you keep the card, you can expect to receive 2,500 Membership Rewards per month (assuming you spend $500 per billing cycle) and pay $10/month.
This represents a continuous value that basically takes churning the card out of the conversation. For me this is a good trade off.
The Cobalt Card is a Rewards Earning Card … with a slight catch. The card will earn Membership Rewards like most of AMEX’s other cards like the Gold Personal, Gold Business, Platinum and Platinum Business.
The catch is that the Membership Rewards points earned cannot be used for airline partners, meaning that you cannot transfer to Aeroplan, Delta, British Airway, Etihad or Alitalia. However, hotel transfer partners are still possible as is AMEX’s Pay with Points option.
If you recall, Membership Rewards can transfer to Hilton at a 1:1 ratio and to SPG at a 2:1 ratio. Transferring to Hilton represents poor value unless you have a very specific Hilton stay upcoming but the SPG transfer offers AMAZING value, especially if you take into consideration the category bonuses.
This is where the Cobalt really shines. Outside of the American Express Gold Personal Card, there are very few cards in Canada that actually have category bonuses. That’s about to change. Dramatically.
You will receive 5x Membership Rewards for spend at restaurant, quick service restaurant, coffee shop and drinking establishments in Canada. Stand-alone grocery stores in Canada and services that specialize in the delivery of food and groceries also qualify.
You will receive 2x Membership Rewards for spend at stand-alone automobile gasoline stations in Canada, travel services or travel bookings including air, water, rail and road transport, lodging and tour operator sales, as well as local commuter transportation in Canada including subway, streetcar, taxi, limousine and ride sharing services.
For all other purchases you will receive 1x Membership Rewards.
If you are collecting SPG points, and you should, this card is AMAZING! Essentially what you are getting is 2.5 SPG points for every dollar you spend at grocery stores, restaurants, bars, food service delivery. Remember, these establishments attract a 5x multiplier and 2 Membership Rewards = 1 SPG. Here’s the math:
$1 spent at a grocery store, restaurant, bar, etc. = 5 Membership Rewards = 2.5 SPG
There is absolutely nothing that comes even close to that for SPG earning. Not here, not in the US. Not anywhere in the world. This is absolutely incredible!
The Cobalt Card isn’t just a great earning card, it offers a lot of great insurances that will protect you and your purchases!
This card will grace us with the following insurances:
- Car Rental Insurance
- Emergency Medical Insurance for out of province and out of country travel
- Flight and Baggage Delay Insurance
- Lost/Stolen Baggage Insurance
- Hotel/Motel Burglary Insurance
- Purchase Protection Insurance
- Buyer Assurance (I assume this is extended warranty coverage)
- Travel Emergency Assistance
- Travel Accident Insurance
The only thing missing from this suite of insurances is Trip Cancellation and Trip Interruption insurance. Full details of the limits to the coverage and requirements were not available at this time, but I am VERY happy to see that you will receive the same benefits as a premium card.
Other Nice To Have Benefits
As with all American Express products, you will receive Front of the Line Access, meaning priority access to tickets for concerts and events. I’ve used this in the past and it has been a lifesaver … definitely a great perk that you can actually use.
AMEX is also starting something called the Cobalt Perks Program which is an ongoing series of offers and opportunities in retail, music and entertainment, travel and more. We don’t know a lot about them yet but it could be a really nice perk as well if there are specialized targeted promotions for cardholders only.
The Cobalt Card is also offering up to 9 supplementary cards for free! That’s great if you have a lot of friends and family that you trust to responsibly use the card in order to rack up the points!
If this card had 0% foreign transaction fees, it could almost be a perfect offering. Unfortunately, AMEX will charge a 2.5% commission on each foreign currency transaction. This will not be broken out but will be part of the conversion rate.
AMEX has significantly relaxed their requirements for applying for their credit products as I previously reported in May. There are no minimum income requirements and you can still apply for and get approved for the card if you’ve had a bankruptcy … just not within the last 2 years (the previous cutoff was 7 years).
Simply said, you now qualify for this card if you are a Canadian resident and have a credit file. You obviously need to be over the age of majority.
I personally do not see a lot of negatives with this card at all. If I were to be nitpicky, I would say that the lack of Trip Cancellation and Trip Interruption Insurance is a bit of a negative but I’ve luckily never needed that insurance coverage before.
I would also have like to have seen the 5x bonus to be applicable to gas stations in Canada to help differentiate it from the Gold Personal Card bonus but again … that’s me being nitpicky.
To be honest, the lack of airline partner transfers is not a big deal for me because I can use my other Membership Rewards for that purpose. Additionally, I have recently been smitten with the idea of converting my Membership Rewards to SPG and then to Marriott for redeeming for Travel Packages.
Get $50 Cash Back!!!
If this card wasn’t great enough already, I just found out that you can actually get cash back for this card! Simply apply through Great Canadian Rebates, get approved and pocket $50 cash!
If you need a refresher on how cash back sites work, take a look at my crash course on the subject!
Any word on the possibility of referral bonuses ?
Not that I know of yet …
“As I understand it, this deal will continue for the duration of the card, meaning that if you keep the card, you can expect to receive 2,500 Membership Rewards per month (assuming you spend $500 per billing cycle) and pay $10/month”
I am not sure how you reached this conclusion… my understanding is that the 2,500 MR bonus is just for the first year.
This was from an Amex rep. Not just my own assumptions.
Great work and awesome post today! Trying to get a bit better understanding about the new card. Is the 2,500 MR points a bonus per month on $500 spending or is that a top up/maximum? If I did $500 at Earl’s (restaurant) in one month, can I assume I will get 5,000 MR points for that month??
Hi A N,
So with your example, you would get 5x points for your Earl’s spend which equals 2,500 MR PLUS you would meet the minimum spend so you would get an additional 2,500 MR as the bonus.
So 5,000 Membership Rewards for $500 spend and $10. Not too shabby. I’ll take that any day of the week.
Hope that helps.
Thanks you for your quick response. Will apply for this shortly.
What prevents you from transferring the MR to SPG, and then SPG to Aeroplan or any other airline reward points? Wouldn’t that still work?
It definitely would work though the ratio isn’t as great. It takes 2 MRs to transfer to 1 SPG and 1 SPG is worth 1 Aeroplan (for simplify sake).
So basically you would get 0.5 Aeroplan for every MR whereas right now you can transfer the non-Cobalt MRs at a 1:1 ratio. Hope that helps.
I know you earn 2x points on travel (flights/car rentals) AND transit (Uber, TTC), but for redeeming with points for statement credit, it says you can redeem 1000 points for $10 credit for “Eligible Travel” – does this include transit, too, like earning, or is it only applicable to flights, car rentals, and NOT day-to-day transit?
There are two different redeem rates (1000 for $10 vs 1000 for $7) – so I was wondering which transit falls into…
I sorta see this as Amex’s way to combat churning.
We’re also talking about 30000 MR points for $6000 in spend over a year. That’s not as good as other offers.
With the fee being monthly instead of annual, are you able to cancel at any time (i.e. Hold the card for 6 months, pay $60 only), or is there a sort of “cancellation fee” at work here?
Really the only thing to get excited about this card, IMO, is the 5x points. But I’d really like to see a list of merchants where this bonus will apply (particularly for groceries..)
Could you please clarify. It is not clear in the documentation whether you can transfer your membership rewards to hotel partners. Thanks
You can 100% transfer to hotel partners. Cheers
I currently have the SPG personal and biz. And Amex gold. Will I have to cancel a card to get the Cobalt? Also anyone know if Shoppers Drug Mart is coding as grocery? Thanks!
You can have 2 credit cards on your profile with AMEX. The SPG is considered a credit card and the Gold is considered a charge card. In your particular case you would not have to cancel a card to get the Cobalt. Cheers
If you have both Canadian Amex Gold and Amex Cobalt, can you pool MR points, and can you use the MR points earned on Cobalt with the airline transfer partners available through Amex Gold?
No, that is not allowed. The MR you earn with the Cobalt are called Membership Reward Select points, whereas the Gold are called just Membership Rewards. American Express has done a very good job at differentiating the tiers so there’s no way to consolidate the different types of MR. Hope that helps.
Thank you very much for the explanation, Jayce. This makes the card somewhat less attractive, but I would have to crunch the numbers with respect to SPG points and see if it is worth it. And line up 3K worth of spend…
Oh, your fererral! Definitely I will use it for my application, cheers!
Do you have any idea how can I pay the rent with any credit card???? Id really appreciate an advice, thanks in advance!
BTW, I will apply to the Cobalt with your referral code of Great Canadian Rebates!
Thank you for the support. If you want to pay rent with your credit card, you can use a service called Plastiq. What Plastiq does is basically charge you a percentage fee (usually 2.5% but there are special promotions) to charge your credit card and then write a cheque to your landlord. You can use my Plastiq referral code (19101) to get $500 in fee free dollars, meaning you don’t pay the 2.5% on the first $500 you send. As far as I know that’s the only way you can pay rent with your credit card, unless your landlord uses Square and accepts credit card payments. Hope that helps. Cheers
Awesome Jayce, definitely I will use your referrals, keep doing this excellent blog,
Love the write up but just a few questions. Do stand-alone grocery stores and gas stations not include the usual places like metro, loblaws, petro canada etc?? Also I see that busses aren’t listed in the footnotes for canadian commuter services but can we assume we would earn double points for any bus services as well?? And would coffee shops include Timmies or would that be tailored to smaller local coffee shop establishments? Thanks!
The way it works is that the category bonus is determined by what the establishment was coded as when they signed their agreement to accept American Express cards. Let’s make up a weird example. If you were to open a combo restaurant/laundromat and you wanted to accept AMEX, when the AMEX rep came by to sign the paperwork, they would have discussed with you what kind of business you are. You would either have to tell them you are a restaurant or a laundromat. Whatever you chose at that point will be what you code as going forward.
So in your question, you noted Metro, Loblaws and PetroCanada. I would expect that Metro and Loblaws code as grocery (5x) and PetroCanada codes as gas (2x). Bus Services would code as travel or transportation (2x) and Timmies would code as a food service (5x).
If you visit an establishment that decided to categorize their store as something that is outside the categories that are bonused would receive 1x points. Unfortunately, if that resto/laundry store decided they were primarily laundry, there’s nothing you can do to try to get your 5x. Hope that helps. Cheers