The American Express Cobalt card is a brand new card available for Canadians. Though Canadians don’t have nearly as many options for great travel credit cards as our American neighbors, there still are some diamonds in the rough to be uncovered. I’ve been bullish on American Express’ offering of cards for years, which largely comes down to one thing: American Express does a really good job taking care of their cardholders. That, above all else, is what breeds loyalty.
The Cobalt card is new and different in a few respects. First, as with most travel credit cards, the Cobalt card offers both an upfront bonus of points plus an ongoing disbursement of points based on your spending. What’s different about the Cobalt, though, is that the fee is charged monthly ($10 CAD per month), rather than the traditional annual fee. Just like every other player in the financial world, American Express wants to reach millennials, so changing its pricing scheme to match the one that millennials know best—the monthly subscription model, which many of us happily pay to Spotify, Netflix and others—is a wise move. I wouldn’t be surprised if the impetus to make the change came from a message from the millennials themselves: annual fees like the hefty $699 fee that comes with the Amex Platinum are too much to stomach, regardless of how much the benefits outweigh the costs. If you want to win over a market, you have to play by their rules.
How do we know for sure that American Express is targeting millennials with this card? It’s crystal clear in their advertising. While American Express ads for decades featured businessmen rushing to catch first class flights, they now showcase twenty-something athletes and entertainers enjoying a night on the town. This ad featuring Toronto Blue Jays pitcher Marcus Stroman is the perfect example.
The second major difference of the Cobalt card is a tweak to its points bonuses. It sits somewhere in the midriff of American Express’ hierarchy of cards, given that it has a similar offering of benefits to the Gold Rewards card, yet also gives 5x points on food and drink purchases within Canada. American Express has extended the definition of food and drink purchases on the Cobalt card to include not only bars and restaurants, but also groceries and food delivery services like UberEATS. You also receive 2x points on travel and transit purchases, and 1x points on spending everywhere else. These latter numbers are in line with what American Express offers on its other cards, but if you’re a foodie, there’s definitely a lot to be had with the Cobalt card.
Cobalt cardholders are rewarded with a new tier of American Express Membership Rewards “Select” points, which are distinct from the regular Membership Rewards points you receive with the Amex Platinum or Amex Business Platinum cards. Select points can’t be transferred to airline partners, though you can apply them against the travel purchases on your statement as a credit at a rate of one cent per point. Cardholders receive 2,500 Select points for every month that they spend $500 on the card during the first year. When you add it all up, that’s a potential 30,000 bonus points—not including the additional points you’ll receive for food and travel purchases—for a fee of just $120 CAD. The Cobalt card comes with the usual smattering of American Express insurances, including flight delay insurance, emergency medical insurance on the first fifteen days of your international trip and an extended purchase warranty.
One thing that the American Express Cobalt card doesn’t offer is fee-free foreign exchange, which can make a big difference if you spend even just a week or two internationally each year. For that, I recommend the N26 Black card, which leverages TransferWise’s technology to offer fee-free foreign exchange on purchases and ATM withdrawals anywhere in the world. N26 will launch in both the USA and UK in 2018, and while I can’t say for sure, it would only make sense that other countries like Canada and Australia would follow suit shortly thereafter.
Since receiving my American Express Cobalt card a few months ago, I’m certainly pleased. It gives me everything I’ve come to expect from American Express—a flexible, fashionable card backed by great service. It won’t have me giving up my Platinum card anytime soon, but that’s the great thing about credit cards in our modern, capitalist economy. You can seldom have too many, yet each of them still holds its own unique place.
