American Express has launched a new Cobalt card in Canada. The card is very different to standard credit cards with a focus on monthly fees & rewards rather than yearly ones. Let’s take a quick look at the card followed by what it might mean for us.
Card Basics
- Card comes with a $10 monthly fee
- Earn 2,500 Membership Rewards points for each monthly billing period in which you spend $500 or more (first year only)
- Receive a sign up bonus of 10,000 bonus points when you spend $3,000 or more in the first 3 months
- Card earns at the following rates:
- 5x points on eats & drinks
- 2x points on travel & transit
- 1x points on all other purchases
Points don’t transfer to airline partners, but they do transfer to SPG at a ratio of 2:1. This means the card earns 2.5x points on eats/drinks category.
What Does It Mean For Us?
This card actually has the same card art as another card, the American Express Explorer that is available in Australia. That card has a $395 annual fee, 100,000 point sign up bonus and $400 travel credit annually. Also earns 2x points on all purchases. I heard from a source at American Express that they were happy with the launch of that card in Australia and wanted to trial it in Canada before possibly releasing it in the United States. Given this new Cobalt card has been released that doesn’t look to be the case anymore.
This could mean that American Express want to trial this Cobalt card before a possibly launch in the United States, or that this is just a pure stand alone product for the Canadian market.
Our Verdict
I think we will see more cards with sign up bonuses that are broken down over a long period than the standard three months/90 days. We already see a bit of this with cards like the Chase British Airways card but card issuers are all about long term card member value at the moment so I suspect we will see even more of it. I’m not sure what card I’d prefer, the Cobalt with it’s 5x on dining out or the Explorer with the 100,000 sign up bonus and 2x everywhere. Obviously both programs have points that aren’t as valuable as normal Membership Rewards. What card would you prefer to see and why?
