PointsNerd

The American Express Cobalt Is Now Live – Everything You Need to Know

Jayce

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.

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.  I don’t know about you but $10 a month is a lot easier to swallow than $120 on your first bill.

Sign-Up Bonus

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.

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 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.

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.

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 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!

Insurances

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:

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!

Foreign Currency

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.

Application Requirements

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.

Negatives

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!

http://www.pointsnerd.ca/go/amex-cobalt/

If you need a refresher on how cash back sites work, take a look at my crash course on the subject!