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Samir asks:

Hi Scott,
     I discovered your blog recently and am loving it. Your miles-related knowledge is pretty impressive and I most definitely appreciate the tips/advice I have gotten from your site so far. Needless to say, I have started reading your site daily. 
     Anyway, I have an issue that I was hoping you could help me out with. Last summer, I signed up for the AMEX Premier Rewards Gold card when it had a nice signup bonus at the time. The $175 annual fee will be coming due within the next few weeks and I don’t use the card enough to justify paying it. The problem is I still have 55K MR points on the account… I’ve had no luck with a retention bonus (admittedly, I didn’t use the card very much after the spend) and downgrading the card isn’t a great option since the points are no longer transferrable…I regrettably skipped out on the BA Transfer bonus that was going on, but I know that AMEX has transfer bonuses somewhat frequently. So my question is what do you recommend I do? I’m willing to wait it out a little and pay a prorated annual fee if there’s hope of a nice transfer bonus in the near future, but I don’t know how likely that is…Regarding my preferred usage of the points, I’d most likely want to use them towards an international ticket rather than domestic travel (hence my reasoning why I had skipped out on the BA transfer). Anyway, any advice would be greatly appreciated, thanks!!
This is a common question I get: what should a person do with unused Membership Reward points when the annual fee is coming due on a card. Samir hits upon why this isn’t completely straightforward.
  1. Cancelling the card without transferring the points would make the points disappear.
  2. Downgrading the card means you are downgrading the Membership Rewards from transferable to non-transferable. This second class of Membership Rewards can only be used for less valuable things like gift cards.
  3. Holding the card any longer will cause the $175 annual fee to come due.
  4. Transferring the points today when there aren’t any transfer bonuses means missing out on one of the most valuable aspects of the Membership Rewards program: the huge value multiplier of transfer bonuses.


In Samir’s situation, I would hold the card and pay the annual fee. Here’s my reasoning:

As Samir said, if he cancels the card later, he’ll get a credit for the prorated annual fee. For instance if he cancels the card after six more months, he’ll get half the $175 annual fee credited back.

Transferring the miles now would be OK, but holding for a transfer bonus is way better. For instance, here are some recent transfer bonuses that have run:

  • 50% more Avios
  • 25% more Virgin Atlantic miles
  • 43% more Delta miles (30% rebate)
  • 30% more JetBlue miles


The best of those was the Avios bonus. For a few months this year, you could transfer 1,000 Membership Rewards to 1,500 Avios. When there are no transfer bonuses, one of the best MR transfers is to Avios, which I value at 1.7 cents per Avios. With that bonus, though, one Membership Reward was worth 2.55 cents (1.7 * 1.5).

The transfer bonus increased the value of each Membership Reward by .85 cents (2.55 – 1.7). Since Samir has 55k MR, that .85 cent per MR increase would increase the value of his stash by $467.50!

What this analysis means is that holding for a transfer bonus can greatly increase the value of your Membership Rewards, and if you have enough Membership Rewards, it’s worth it to pay an annual fee to wait for a transfer bonus.

In Samir’s specific case, the Avios transfer bonus may not interest him much, since he wants premium international travel. But a Delta or Virgin Atlantic transfer should come around in the next year, one would think, so paying the annual fee and waiting is the best deal.

What if you have fewer Membership Rewards?

If you have an account with just a few Membership Rewards, you should just transfer them and close the account to avoid the annual fee. What is the cut off between a few MR and a ton of MR?

It’s tough to say, but I’d put it at about 20,000 Membership Rewards. The reason is that 20,000 MR times the increase in value from a 50% Avios transfer bonus roughly equals the annual fee on the Premier Rewards Gold card.


If you have a ton of Membership Rewards, and your card’s annual fee is coming up, you have some tough choices.

The worst option is to close your account before transferring because you’d lose the points. Another bad option is downgrading to a card that doesn’t offer transferable Membership Rewards; that would cost you a ton of the value of your points.

The only viable options are to transfer the points now or pay the annual fee and wait for a transfer bonus. If you have more than 20,000 Membership Rewards, I recommend paying the annual fee and transferring at the first good bonus. Then close the account and get credited a prorated share of your annual fee.

Bonus Tip

While the card is still open, use it for its category bonuses when you aren’t clearing other sign up bonuses or using the Ink Bold/Vanilla Reload trick. The card earns 3x on airfare and 2x on gas, shipping, and advertising.

Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 60,000 points after $4,000 spend in the first 3 months, 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!

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