Full Details About the New AMEX Cobalt Card

It looks like the American Express representatives now have more details about the new Cobalt card and I thought I would share with you what I’ve learned.

UPDATE – I tried calling back about 5 more times but every rep seems to be tight lipped about the card now.  I’m assuming the rep I spoke to gave too much information and the rest of the call centre has been warned not to provide further details.

From what I see, this card is taking a very new and refreshing approach to both the annual fee and the sign-up bonuses.  Apparently this has been done to attract Millennials who tend to shy away from the large upfront costs that Annual Fees represent and have now incentivized spending on a monthly basis.

Annual Fee

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.  Personally, I think this is a genius move by AMEX.  Rather than have a large upfront cost, AMEX can now sell you on the use of the card for “pennies a day”.

Sign-Up Bonus

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, meaning that if you spend $500/billing cycle, 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.  Pretty smart.

Rewards Earning

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 viable as is AMEX’s Pay with Points option.  I’ll delve into why the hotel transfer option is still EXTREMELY attractive.

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 grocery stores, restaurants, food service establishments and food delivery services.

You will receive 2x Membership Rewards for spend on travel and transit purchases.  Travel will include things like Uber or Lyft, car rental, flights, etc.

For all other purchases you will receive 1x Membership Rewards.

Sweet Spot

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 a grocery store.  Remember, you get a 5x category bonus on grocery purchases and 2 Membership Rewards = 1 SPG.  Here’s the math:

$1 spent at a grocery store = 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!

When Can I Apply?

The card will officially launch Tuesday, September 26th and you can apply for it the same day.

Conclusion

This is an incredibly exciting card and represents an incredible opportunity to earn SPG points.  With very generous category bonuses, this is a must have card.

Update

We now have even more details about the card in relation to transfer ratios, insurances and bonus points.  Check out the post at http://www.pointsnerd.ca/american-express-cobalt-more-information/