Amex Cobalt Card: How to Maximize Your Value

American Express Cobalt Card - best value in canada

Mr. Thrifty is departing today from his blanket advice to opt for no-fee credit cards in order to highlight the benefits of the American Express (Amex) Cobalt Card, which charges a fee of $12.99 per month (or $155.88 annually). Mr. Thrifty has held the Amex Cobalt Card for a little over a year and plans to keep it. Read on to find out why, and how he maximizes its value.

Amex Cobalt Card: Sources of Value

What do you get for the monthly fee? The majority of value comes from Amex’s Membership Rewards (MR) points program. Depending on your lifestyle and spending habits, you can earn back value that’s well in excess of the fee, especially if you can maximize your benefits during their new member bonus period, which is currently up to 30,000 bonus points (2,500 per month) in each month where you spend $500 or more on the card.

The regular Amex MR earning rate on different categories of spending is also impressive with the Cobalt Card:

5x points on eligible eats & drinks purchases in Canada
3x points on eligible streaming subscriptions in Canada
2x points on eligible transit & gas purchases in Canada and eligible travel purchases
1x points on everything else

Of course, there is an annual cap on the bonus spending categories: a combined maximum of $30,000 in net purchases. If you play your “cards” right, you can easily earn over 100,000 MR points annually. Depending on how you redeem them, such as through Aeroplan, an MR point is generally valued at about 2 cents (the outstanding Prince of Travel website values MR points at 2.2 cents). So that’s about $2,000 in value vs. the annual fee of $156.

Apart from points, there are regular special deals offered through Amex, such as its ‘Buy Small’ program, which offers statement credits when spending at particular retailers – both online and offline. If used judiciously, they alone can offset the full monthly fee. There are also regular targeted offers for spending on certain categories.

How to Maximize Your Amex MR Points

Use it for Eats and Drinks (Including Groceries)

5x points on eats and drinks is certainly an eye popper. This includes groceries, so you’re being rewarded for basic spending.

Of course, when dining out with friends, you can always pitch them that you’ll pay for the group with your Cobalt Card and ask them to reimburse you by cash or Interac.

A Not-So-Secret Hack: Buying Gift Cards

If you’re running short of the monthly $500 minimum spend, you can always buy a gift card for your favourite supermarket, restaurant or delivery service.

But a better way would be to buy gift cards at the supermarket for other non-food merchants, assuming you’d be spending money with them anyway. That way you’ll effectively achieve 5x points on these other categories. At most grocery stores, you can buy gift cards for such diverse merchants as:

Airbnb
Amazon.ca
American Eagle
Apple
Banana Republic
Bath & Body Works
Bed Bath & Beyond
Bell Mobility
Best Buy
Canadian Tire
Cineplex
David’s Tea
Decathlon
eBay
Esso
Fido
Freedom Mobile
Google Play
H&M
Home Depot
Home Hardware
HomeSense
IKEA
Indigo
Koodo
La Senza
La Vie en Rose
LCBO (LCBO also offers bonus Aeroplan points directly, so you’ll be double dipping)
Lowe’s
Lucky Mobile
Lululemon
Mark’s
Marshall’s
Netflix
Nordstrom
Old Navy
Petro Canada
Playstation Store
Reitman’s
Rogers
SAQ
Sephora
Sports Experts
Telus
The Bay
The Beer Store
The Gap
The Source
Twitch
Uber
Virgin Mobile
Wayfair.ca
Winners

If you’re moving into a new place, you can really load up on points by buying gift cards to Home Depot or Lowe’s (e.g. major appliances), and home furnishings at IKEA, HomeSense, Winners, Amazon.ca, Wayfair.ca, and more. You could also achieve 5x points on your mobile prepaid bills and gas bills. And even on beer 🙂

Example: Supersize Your Points with Airbnb Gift Cards

Mr. Thrifty is a big fan of Airbnb and normally stays in an apartment when travelling. And he buys Airbnb gift cards from his local grocery store prior to booking his Airbnbs, effectively earning 5x points on his accommodation expenses.

Here’s a further Airbnb travel hack: if you’re a Delta SkyMiles or British Airways Executive Club member, you can earn additional points under these programs by using their special links prior to booking your Airbnb. Delta offers 1 SkyMile per US$ spent, while BA offers 3 Avios per £1/€1/$1 spent. Here are their special links (you must book directly after clicking through these links in order to get the bonus points):

Delta Airbnb:

https://www.deltaairbnb.com/content/delta-airbnb/en/overview.html

British Airways Airbnb:

https://www.britishairways.com/en-ca/executive-club/collecting-avios/hotels/airbnb

How to Maximize Your Value When Redeeming MR Points

Transfer-In Frequent Flyer Miles to Aeroplan or Other Frequent Flyer Programs

If you’re a frequent traveller, the ability to transfer Amex MR points to Air Canada’s Aeroplan normally represents the best use case for such points. With Aeroplan’s dynamic pricing model, you could score a free trip for as little as 6,000 Aeroplan points on flights up to 500km. That would be the case when flying from Toronto / Ottawa / Montreal to New York.

Rewards tickets in premium cabins (business and first class) are normally priced at a much better relative value compared to cash fares. For example, a one-way business class fare to Europe starts at 60,000 points vs 35,000 in economy.

Amex MR points can also be transferred to other airline rewards programs such as British Airways Executive Club, Asia Miles, Air France KLM Flying Blue, Delta SkyMiles, and Etihad Guest. However, only Aeroplan and Avios accept transfers on a 1:1 basis. The other programs offer less value for your points.

If you’re able to plan far enough in advance, you could even score the highly-coveted ANA first-class seat from Tokyo to several US destinations like San Francisco, Los Angeles, Chicago, or New York for as little as 55,000 points (one-way). However, to get this fare you’d have to book through ANA’s partner Virgin Atlantic, which only accepts transfer-ins from US Amex MR points (see discussion below).

Bonus Tip: Use the Aeroplan eStore to Earn Even More Aeroplan Points

While we’re on the topic of Aeroplan, the Aeroplan eStore is also a way to rack up easy Aeroplan points with retailers you’re already likely patronizing, such as Amazon.ca, Apple, Best Buy, Lululemon, Sport Chek, Dell, The Bay, Sephora, and many more. And if you have Aeroplan Elite Status, you’ll earn an extra 2x Aeroplan points on all purchases.

But the real beauty is to wait for their special promotions, which happen a few times a year. For example, Simons, Lenovo and the Apple Store offered 7x points during the back-to-school campaign that ran until August 14, 2022. Some retailers such as Telus even offered 10x points.

Another Benefit: Gateway to a US Credit Card

Though not specific to the Cobalt Card, establishing a relationship with American Express Canada opens up the possibility of obtaining a US-based credit card in future. Unlike Visa and Mastercard which are issued by different financial institutions, Amex is able to share credit information with its branches in different countries.

There are many benefits to having a US-based Amex card. For example, it’s less common for US cards to charge a premium on foreign transactions. Moreover, as described above, there are more MR transfer partners for the US-based MR program. And, finally, the welcome bonuses tend to be richer south of the border.

One thing you should do in preparation for applying for a US-based credit card is to obtain a US Individual Taxpayer Identification Number or ITIN. Read this detailed article on the Frugal Traveler site about ITINs and how Canadians can obtain one through their service: All About the Individual Taxpayer Identification Number (ITIN).

Drawbacks of the Amex Cobalt Card

It’s not all roses. Apart from the monthly fee, Amex isn’t as widely accepted as Visa or Mastercard. For example, if you’re trying to maximize your grocery points, Loblaws doesn’t accept Amex in any of their supermarket brands (e.g. Loblaws, T&T, Provigo, Maxi, Superstore, Independent). Adonis Supermarket does not accept Amex either, even though it’s controlled by Metro group (Metro, Food Basics, Super C), which does.

The Thrifty Bottom Line

Yes, $155.88 is not an inconsiderable annual fee. But a thrifty consumer with suitable spending and lifestyle habits can derive multiples of this amount in value from holding the Amex Cobalt Card, especially during the initial 12 months when the welcome incentives are at their peak. If you maximize the current 30,000 MR points welcome bonus alone, that could be worth $720 in value for spending you’re likely to incur anyway (such as groceries and subscriptions). For this reason, Mr. Thrifty ranks the Cobalt Card as the best value for everyday spending amongst annual fee Canadian credit cards.

If you’re not the type of consumer who could benefit from the features offered by the Amex Cobalt Card, you should look into our article on the best no-fee credit cards in Canada.

This article covered quite a number of topics – not only the Amex Cobalt Card, but also Amex as a company, Air Canada’s Aeroplan, US credit cards, and a few examples of points-earning hacks. Write to us at ask@mrthrifty.ca if you’d like us to expand on any of these areas with dedicated articles in future.