With a welcome bonus of 30,000 MR points, a 5X earning rate on eligible eats & drinks (including spending on groceries, food delivery, cafes, bars and more), and a monthly fee of just $10, we believe the American Express Cobalt Card is a great credit card for many Canadians.
The American Express Cobalt Card has been receiving a lot of attention since its fall 2017 launch, and with good reason: it’s an extremely compelling offer. $10/month for a card that gets you 5X the points on food and drink purchases in Canada and 2X the points on travel purchases anywhere in the world is an excellent deal.
But of course, as we’ve come to expect from American Express through their other offers—like the Platinum Card and the Business Platinum Card—there’s much more to the Cobalt than meets the eye. Once you learn the ins and outs of this card, I’ll be surprised if you aren’t applying for one of your own by the end of this post.
This credit card is marketed at millennials and near-millennials, so if you fit either of these, you’ll definitely want to give the Cobalt Card a closer look.
Pros & Cons Of The Amex Cobalt Card
|• Monthly fee of just $10 with no annual fees
• Up to 30,000 MR welcome bonus points for using your card every month
• $100 in hotel credit annually
• Save up to 15% on your purchases during the first year of card membership
• One of the best and most flexible points earning rates of any credit card in Canada
• Points are easy to use
• Up to 9 additional additional Cobalt Cards for free
• Plus, when you apply by May 5, 2021, you can earn a Welcome Bonus of 15,000 Membership Rewards® points when you spend a total of $3,000 in purchases on your Card in your first 3 months of Cardmembership
• Cobalt Cardmembers receive regular Perks such as bonus reward offers and access to great events
|• $30,000 cap on the 5X earning rate (equivalent to 150,000 MR)|
Amex Cobalt Features & Benefits
|Welcome Bonus||• 2,500 MR points every month you charge at least $500 to the card|
|Travel Benefits||• $100 hotel credit for spa, restaurants and other amenities at The Hotel Collection participating properties
• Complimentary room upgrades at The Hotel Collection participating properties
|Additional Card Fee||Up to 9 free additional cards|
|Points Earned Per $1 Spent||• 5X on eligible eats and drinks, including groceries and food delivery
• 2X on eligible travel & transit
• 1X on everything else
|American Express Experiences||✔|
|Travel Coverage||• $5,000,000 Emergency Medical Insurance (Out of province/country)
• $250,000 Travel Accident Insurance
• Flight Delay Insurance
• Baggage Delay Insurance
• Lost or Stolen Baggage Insurance
• Hotel/Motel Burglary Insurance
• Car Rental Theft and Damage Insurance
|Purchase Coverage||• Buyer’s Assurance Protection Plan
• Purchase Protection Plan
|Eligibility||• Canadian citizens or residents
• A valid Canadian Credit file
• An account in good standing (recommended credit score of at least 650)
|Type of Card||Credit Card|
|Applied Interest Rate||• 19.99% on purchases
• 21.99% on cash advances
The Amex Cobalt’s Monthly Fee
The Amex Cobalt Card is the first and only American Express card to offer a monthly fee in lieu of an annual fee. This makes the Cobalt Card extremely affordable for most Canadians, because you don't have to pay one single, bulky annual fee. Instead, the annual fee gets split up across twelve more manageable payments, and those payments are just $10/month.
What Are Membership Rewards Select Points And How Much Are They Worth?
The value of any loyalty program's points depends on how you use them. Keeping this in mind, American Express has always offered a lot of flexibility regarding what you can do with your Membership Rewards points.
Normally, I recommend using your American Express points on flights, since you can get exceptional deals like these that we mention in our post on the Platinum Card:
|Roundtrip Toronto to Hong Kong
$100 total taxes/fees
|Roundtrip Vancouver to Hong Kong
$90 total taxes/fees
|Round-the-world Toronto to Hong Kong to Dubai to London to Toronto
$761 total taxes/fees
|Round-the-world Vancouver to Hong Kong to Dubai to London to Vancouver
$742 total taxes/fees
But the difference with the Cobalt Card is that you use a different points system when spending your points on flights. American Express has introduced a new tier of points called Membership Rewards (MR) Select, which are usable for just about everything that regular MR points (which you receive with the Platinum, Business Platinum and Business Gold Rewards cards) are, including hotel stays and travel purchases, but you can't transfer them to loyalty programs like Aeroplan or Avios.
As a consequence, rather than valuing these MR Select points at 2-3 cents per point (like the regular MR points), I suggest a slightly lower value of 1-2 cents per point (read on to understand why).
So the Amex Cobalt comes with both good and bad. The bad is the change I just described: the method for redeeming your MR Select points for flights is a bit different, so many of our strategies for flying from Asia to North America for $75 or from Canada to Europe for $50 are less relevant.
But the good is really, really good: once you know how, you can save 10% on your monthly spending using the Cobalt Card.
How To Use Your MR Select Points
Even though you can't transfer your MR Select points to Aeroplan or Avios, there are still a couple of different ways to use them:
- For statement credits
- For flights
- You can transfer them to Marriott Bonvoy™
- For purchases in different retailers
#1 Using MR Select Points For Statement Credits
This is, by far, the easiest way to redeem your MR Select points. You can choose to exchange 1,000 points for a $10 statement credit towards eligible travel purchases, or you can trade them for $7 towards any other purchase.
When used for a statement credit as I described above, you will get a value of 0.7 or 1 cent per point.
This isn't a great valuation, but it sure is the easiest type of redemption you can get. It's absolutely hassle-free. All you have to do is
Step 1: log in to you Amex account through the Membership Rewards site
Step 2: Choose to use your points
Step 3: Select which purchase you want the statement credit to be used for
Step 4: Finally, choose how many MR points you want to use. The minimum is 1,000 points.
#2 Boosting Your Points With Fixed Points Flight Rewards
The one cent per point valuation I've suggested above is extremely easy to achieve: all you need to do is apply your points against the spending on your American Express statement, nothing more. However, American Express' Fixed Points Flight Rewards offer value that's up to twice as good. Here's how to capitalize on that.
The table below shows the redemption costs for various destinations around the world using the Fixed Points system. As you can see at the very top, you can redeem 15,000 points to offset $300 (value of 2 cents per point) on short-haul routes like those between Toronto, Montreal, Ottawa and New York, as well as between Vancouver and Calgary. Longer flights offer a slightly lower valuation (1.5-1.75 cents per point), though if you choose your routes wisely, they can still save you hundreds of dollars more than what you're already saving by applying your MR Select points directly against your American Express statement.
At the end of the day, you really can't lose.
#3 Transferring Your Points To Marriott Bonvoy
This is another option, in case you're not keen on using your points as MR points, but would rather build up your balance in hotel loyalty programs like Marriott Bonvoy or Hilton Honors.
In the first case, you can transfer your points at a 1:1.25 rate. This means that for every 1,000 MR points you transfer, you'll receive 1,250 Marriott Bonvoy points. Because Marriott Bonvoy points are valued at around 0.8 cents per point, transferring you MR points at this rate will still give you a final value of 1 cent per MR point:
1.25 MB/MR x 0.8 cents/MB = 1 cent/MR
Therefore, unless you have the option to use them for flights (in which case you could get up to 2 cents per MR point), you wouldn't be hurting your MR points' value by transferring them to Marriott Bonvoy points.
The downside would be limiting yourself to only being able to use the transferred points in Marriott Bonvoy participating hotels and resorts.
#4 Using Your MR points For Other Purchases
The last way in which you can spend your MR points is by using them to pay directly for gift-cards and other merchandise at select retailers, and for purchases through Amazon.ca.
As you might have guessed from the value of statement credits, using your points in this way (which is by far the most flexible way to use them), will only give you the minimum value of 0.7 cents per point. This is because you effectively trade off value for flexibility.
Bonus Cobalt Points
Just like its fee, the Cobalt Card's welcome bonus is also split in 12 equal parts.
Most American Express cards come with a single welcome bonus that you get once you reach a minimum amount charged to the card. The same principle applies to the Amex Cobalt, only on a monthly basis:
If you manage to get the 12 bonuses, you'll have a total of 30,000 bonus points by the end of the year. At the least possible value of 0.7 cent per MR Select point, this bonus adds up to $210, for a card worth $120. If you ramp it up to 2 cents per MR point, you'll get back $600.
That's one sweet deal!
Earning Rate On The Amex Cobalt
You can access three different earning rates with the Cobalt Amex:
- 5X on food & drinks (with a cap at $30,000 )
- 2X on eligible travel purchases
- 1X on all other purchases
The 5X earning rate (5 points per every $1) on eligible food and drink purchases is one of the highest earning rates American Express has to offer. Additionally, American Express is generous with their definition of food and drinks:
Restaurant, quick service restaurant, coffee shop and drinking establishments in Canada, stand-alone grocery stores in Canada, delivery of food and groceries in Canada…
The flexibility of the food & drink category makes it especially easy for anyone to access it, every day. This is exactly what makes the American Express Cobalt Card the best everyday spending card available in Canada today.
Cap On The 5x Earning Rate
Important Notice: The Amex Cobalt has been so successful that Amex placed a cap on the total amount of points you can earn on food and drinks. The 5x earning rate is limited to a maximum of $30,000 per year, and after that you'll earn 1 point per dollar spent.
As of today, the 2x earning rate on travel purchases is unlimited, but, since it's also a very good earning rate, things could also change in the future.
If you want to take advantage of all the perks this card offers today, I recommend that you sign up to the Cobalt Card soon, before Amex decides to put any more caps on its benefits.
Save 10% on your spending with the American Express Cobalt
As I explained in the previous sections, if you apply for the American Express Cobalt Card today, you’ll receive 2,500 MR Select points for every month of the first year that you charge $500 to the card.
On top of that, you also earn 5X points for every dollar you spend on food and drinks. And when you do…
You’ll save 10% on that month’s spending.
Here’s the math to show what I mean:
2,500 bonus points for spending $500/month
+ 2,500 points (5X points on $500 spent on food/drinks)
= 5,000 points earned per month
When you apply those points at the one cent per point valuation I mentioned above (which is as simple as applying them against your American Express statement, nothing more), you get $50 back on your $500 of spending. That's a savings of 10%!
Here’s how it looked when I applied 4,000 of my MR Select points against two flights I’d recently redeemed my regular MR points for on Aeroplan:
Of course, it’s not a problem if you don’t spend $500 per month on food and drinks. Let’s imagine that one month you only spend $300 on food and drinks and the other $200 on something else:
2,500 bonus points for spending $500/month
+ 1,500 points (5x points on $300 spent on food/drinks)
+ 200 points (1X points on $200 spent on other items)
= 4,200 points earned per month
Insurance coverage is very important to most travelers, and the Cobalt Card delivers a very comprehensive set of embedded insurance policies, given how inexpensive this card is.
The Amex Cobalt's Travel Coverage
The travel-related insurance policies that come with your new Amex Cobalt Card are:
- $5,000,000 Emergency Medical Insurance (Out of province/country): This policy will cover virtually any accident that needs medical attention, once you're on your way. The coverage is for you, your spouse, any dependent children, any additional cardmember, his or her spouse and dependent children, for any number of trips with a maximum duration of 15 days.
- $250,000 Travel Accident Insurance: This is an AD&D life insurance policy that covers you and your family while you”re all traveling in a common carrier.
- Flight Delay & Baggage Delay Insurance: Two separate policies but with an aggregate maximum coverage of $500. Intended to cover you for unforeseen expenses due to your flight or baggage been delayed for a long time. It includes out-of-pocket money, money for food and even hotel stays.
- Lost or Stolen Baggage Insurance: This policy can help you recover up to $500 in lost items and personal effects.
- Hotel/Motel Burglary Insurance: Similar to the Lost or Stolen Baggage Insurance, it protects you for up to $500 in stolen personal effects if your hotel gets burglarized, as long as your lodgings were paid with your Amex Cobalt Card.
- Car Rental Theft and Damage Insurance: You can use this policy to waive the vehicle rental company's own insurance policy and get up to $85,000 of coverage without paying a single dime.
Amex Cobalt Purchase Coverage
Regarding card purchase coverage, the Amex Cobalt Card comes with American Express' two standard policies:
- The Buyer’s Assurance Protection Plan, which doubles the manufacturer’s warranty for up to one extra year, on any purchase paid in full with your American Express Cobalt Card.
- The Purchase Protection Plan, which covers your Cobalt Card purchases against accidental damage and theft, to a maximum of $1,000.
Read our post on American Express Insurance to learn all the details regarding these and other insurance policies offered by American Express Canada.
Free Supplementary Cobalt Cards
Giving your family members (or employees) supplementary cards is a great way to boost your earning rate. While some additional cards require you to pay an additional fee, this is not the case with the Cobalt Amex card.
You can request up to 9 additional Cobalt Cards for supplementary cardholders, free of charge. The only condition is that he or she be 13 or older.
American Express Front Of The Line®
The Amex Cobalt Card comes allows you to access Front Of The Line Presale & Reserved Tickets to some of your favourite concerts and theatre performances and special offers and events curated for Cardmembers with American Express Experiences. The specific benefits include:
Front Of The Line Advance Access
This benefit lets you purchase or reserve tickets for highly sought after events, sometimes even before they're on sale.
Front Of The Line Reserved Tickets
These are blocks of seats reserved by American Express exclusively for its cardmembers. With Reserved Tickets you won't be left out of any major event, even when tickets have sold out for the general public.
Front Of The Line E-Updates
This is a subscription email service that periodically sends you the listings of all the events you can access thanks to your Amex Cobalt Card.
Other Amex Invites Benefits
Special Access and benefits at Budweiser Stage, Roy Thomson Hall and Massey Hall, including a separate entrance, lounges and bars.
What About Foreign Currency Exchange?
While you earn 2X the points on travel purchases like flights and hotels, you still pay a 2.5% fee on all foreign transactions and foreign ATM withdrawals with the Cobalt Card. 2.5% isn’t huge, but if you spend $5,000 over the course of a month-long Europe trip, that’s an extra $125 you’ve thrown away in currency exchange fees. Instead, I recommend picking up the N26 You card, which leverages TransferWise’s technology to offer zero currency exchange fees and free ATM withdrawals around the world. Since getting my N26 You card four years ago, it’s been my go-to travel card, and I absolutely love it.
We believe the American Express Cobalt Card is a great credit card for many Canadians. With its impressive 30,000 points welcome bonus, $100 USD annual hotel credit, complimentary hotel room upgrades, comprehensive travel insurance, and best-in-class earn rates, it's hard to go wrong with a Cobalt Card.