A few days ago I wrote about the new exiting American Express Cobalt card. At that time American Express pulled their “coming soon” teaser page. On various Reddit and FlyerTalk pages only a handful of people had reliable information about the card. The release of this card felt similar to the release of the Chase Sapphire Reserve card last year. We broadly understood the upcoming benefits offered, the annual fee, and even had an idea of the design. Although the information seemed reasonable we were still waiting on American Express to confirm the new American Express Cobalt Card and the card benefits.
Luckily, that all changed when American Express finally held a launch event for the new American Express Cobalt card. The event effectively confirmed everything we already knew about the card. Since the speculated benefits seemed so strong that’s a good thing.
I’m excited about this card, I think it represents a shift in the way credit card loyally works in the future. My only hope is that the card does well enough that American Express will introduce a similar card in the United States.
American Express Cobalt Benefits
I’ve gone over the preliminary benefits in my previous post, but I’ll dive into the confirmed benefits again now. American Express Cobalt card members receive the following benefits:
- 5X Membership Rewards Points per $1 spent on the following qualifying purchases:
- Restaurants, Quick Service Restaurants, Coffee Shops, and Drinking Establishments! (emphasis mine)
- Stand-alone Grocery Stores In Canada
- Delivery of Food and Groceries In Canada as a Primary Business
- 2X Membership Rewards Points per $1 spent on the following qualifying purchases:
- Stand-alone Automobile Gasoline Stations In Canada
- Travel Services (Air, Water, Rail and Road Transport, Lodging, and Tour Operators).
- Local Commuter Transportation In Canada (Subway, Streetcar, Taxi, Limo, and Ride Sharing)
- 1X membership Rewards Points per $1 spent on all other qualifying purchases
Additionally, Per American Express, Membership Rewards points earned with the American Express Cobalt card are not eligible for transfer to airline or frequent flyer programs.
American Express Cobalt Sign-Up Bonus
As I alluded to earlier, this card doesn’t act like a traditional American Express credit card. No where is that more apparent than the newly structured sign-up bonus. Instead of earning a huge sum of points after just three months of spending, the Cobalt sign-up bonus awards points monthly. Accepted Amex Cobalt applicants earn 2,500 MR points for each month they spend at least $500 with the card within the first year. Essentially, the sign-up bonus is 30,000 for spending $6,000 within the first year. Hopefully that all makes sense.
While this sign-up bonus is different from other, traditional, bonuses it’s still not a great value. 30,000 MR points which aren’t transferable to airline programs doesn’t seem like a great deal to me. Additionally, if you open this card, you have to spend $500 each month. That’s spending that might get taken away from a more lucrative card down the road.
Overall, I like the idea behind the new sign-up bonus, but wish it offered more points. Typical sign-up bonus of 50,000 per $3,000 are the standard these days. I’d like to see this bonus offer closer to 8,000 MR points a month per $500 of monthly spending. A sign-up bonus of nearly 100,000 points per $6,000 of spending is more in line with competitor credit cards.
American Express Cobalt Annual Fee
The annual fee for the American Express Cobalt card works similar to the initial sign-up bonus. Card members pay the annual fee monthly rather than as a single upfront charge. It seems American Express is marketing this card toward Millennials and believes this monthly model is more appealing to them (us). The current annual fee for the American Express Cobalt card is $120. Card members pay $10 monthly for the first 12 months of card membership. Interestingly, according to the fine print on the application page, applicants must pay the $10 monthly fee regardless of account standing. See the fine print below:
Basic Card: a month, charged on statement after Card issued and once a month thereafter (regardless of card activation). Equals a total fee of per year of Cardmembership.
Supplementary Cards:
It seems even if card members close the card within the first card member year, they’ll still be on the hook for the full $120. Perhaps I’m misreading this point, but to me it seems if you apply for this card you’ll pay the full $120 even if you close the card after only a few months. Please fee free to correct me if I’m wrong below.
My Overall Impressions With The American Express Cobalt Card
Overall the American Express Cobalt card continues to impress. 5X points for just about every form of food and beverage consumption imaginable is extremely generous. Additionally, 2X points for travel is also fantastic. I can’t put my finger on a single card in the US that offers that kind of return on those categories. The Citi Prestige card is the only one that comes to mind at the moment.
Additionally, I’m excited by the way American Express is handling the annual fee and sign-up bonus. They’re testing out a new strategy marketed to us Millennials and I think they’ve nailed it. See, doing it this way they’re actually paying us a lower sign-up bonus and charging us a higher annual fee. I’m not saying the fee isn’t worth it, but rather making an observation. From a business point of view this idea seems brilliant.
I’ve heard to many people pass on lucrative credit cards and citing a “high” $95 annual fee as the reason. I’m guessing with time I’ll start to overhear people bragging about their second-rate credit cards and they’re “only” paying $10 a month for. But, I digress.
The only thing that disappoints me about this card is the inability to transfer to airline loyalty programs. Transferring to airline loyalty programs is one of my favorite points redemption options. Luckily, in the world of falling airfare prices and consistently high hotel prices you should be able to score a nice room with points at a Hilton or potentially a Marriott/SPG hotel going forward. Although I’m sad to see this card not offer airline transfers I don’t think it’s reason enough to pass on this card.
Final Thoughts
Overall, as I’ve said a dozen times now, I’m very impressed by the American Express Cobalt card. The new Cobalt card really shows that American Express is listening to consumers. They’ve seemingly taken the time to analyze customer spending habits and have released a new card accordingly. It also seems like American Express is more than ever willing to adjust their card model to attract new customers. By changing the annual fee model American Express has accommodated a group of people who are simply unwilling to pay an upfront annual fee.
Although I’m obviously very excited about the American Express Cobalt card, I’m still hugely disappointed by two main items. First, the Membership Rewards points aren’t transferable to airline loyalty programs. As airlines adjust their frequent flyer programs it’s becoming harder and harder to earn miles by flying. Earning miles through credit card spending is the best way to earn miles quickly, so it’s sad to see this option limited on this card. Secondly, and most importantly, I’m disappointed this card isn’t available in the United States. Obviously that’s a glaring issue since I’m based in the US. My only hope is that eventually American Express will introduce a similar card to the south of our northern neighbor.
Note: At the moment I couldn’t find a direct link to the card’s application page. This link is from Do Not Call The Airline: Click here to apply for the New American Express Cobalt Card.
