JANUARY 14th 2021 UPDATE: in addition to the excellent regular offer, the Cobalt Card currently offers an additional bonus of 15,000 points if you spend $3,000 in the first 3 months, for a total value of ≈ $706 with the welcome bonus based on our Flytrippers Valuation (updated review to come).
While we can’t travel right now, we should definitely be preparing our next trips by taking action now to earn rewards that will give us free trips. My own favorite card is a great way to do earn a lot: it is one of the best cards to do so for many Canadian travelers.
The American Express Cobalt Card was revolutionary and unique when it came out 3 years ago.
Why? It earns a whopping 5% back on groceries, or 6X Marriott points per dollar for an even more valuable return. That is extremely lucrative, especially in times like these when we’re spending a lot on food due to the lockdown. Aand it’s not just groceries: you can get those earn rates elsewhere too — and there are 4 other great reasons.
The best one? The earn rates actually double with the welcome bonus. So the card is still one of the best in Canada today, as you can easily get $480 in free travel the first year (or even $1,000 in free travel if you maximize it).
As a reminder, unlike what many travel rewards beginners usually think, there is no such thing as a “best card”. What makes a card great is its welcome bonus, and those often change. And the “best card” is getting multiple cards: welcome bonuses are the key to getting thousands in free travel every year like I’ve been doing for a decade. You won’t ever get that with just one card (and you’re hurting your credit score with just one card).
We’ll have a free beginners’ course so you can learn everything you need to know as soon as we can start booking travel again—sign up for free below to get it first!
But yes, when looking at individual cards, the American Express Cobalt is pretty much the best.
This review explains why.
6 Types Of Travelers Who Should Get The Cobalt Card
The American Express Cobalt Card is especially good for those who check ONE of these 6 main boxes.
- can easily spend $500 per month on the card
- shop at grocery stores that accept AMEX cards (many do)
- want more Marriott Bonvoy points for free hotels
- want the highest possible simple easy-to-use travel credit
- are just getting started in the world of travel rewards
- don’t want to maximize their free travel by getting multiple cards
If you don’t check at least one of those 6 boxes, you can check out our monthly ranking of the best credit card offers or check out our post about the best cards in Canada to maximize your grocery rewards (there is another one that earns 5X).
I’ll explain why the card is great for each of those 6 types of travelers in greater detail throughout the card review, but I’ll also summarize them at the end in case you want the simplified version to help you make a decision.
5 Reasons Why The Cobalt Card Is Great
My Cobalt Card is my favorite among all of my many cards. It’s so good that even those in the US are jealous of us Canadians, and that NEVER happens in the world of travel rewards (sadly).
It’s pretty easy to see why with these 5 reasons.
The card gives you:
- The option to redeem as fixed-value points or variable-value points
- The best earn rate on most purchases
- A great welcome bonus
- Free additional cards
- Good insurance coverage
1. Redemption Options
Some want points to be flexible so that they are easy to use even if they are worth a little less (as a simple travel credit), while others prefer being flexible and investing a bit more time to maximize points that can be worth exponentially more (as hotel points).
The American Express Cobalt Card gives you the option to do both, and most importantly, it’s amazingly rewarding no matter the option you choose. Although of course, it’s more potentially more rewarding if you use the points as variable-value hotel points, as always.
I’ll show you the math below, with examples.
2. Best Earn Rate
Without the welcome bonus, you’ll always earn a simple 5% back on food (groceries, restaurants, food delivery, coffee shops, bars, etc.) as a travel credit, or 6X Marriott points which can be worth the equivalent of 6% or even 16% if you maximize them.
But it’s not just on groceries: buy gift cards from a variety of merchants at your grocery store and you’ll get 5X (or 6X) on just about every purchase from major retailers, since most of them offer gift cards. For example, at most grocery stores, you can also buy gift cards for gas stations, giving you 5X (or 6X) on gas too! Clothing stores, hardware stores… it works almost everywhere.
You’ll earn 2% on gas, transit, and travel expenses (or 2.4X Marriott points) directly, and 1% (or 1.2X Marriott points) everywhere else.
Needless to say, the 5% is simply phenomenal value. Most get 1% or 2% back, now we’re talking 5 times more on so many of your purchases with the American Express Cobalt Card. Same purchases, 5 times more free travel.
But wait: it gets better.
3. Great Welcome Bonus
The unique year-long welcome bonus actually doubles that rate if you spend $500 per month during the first year. That’s the equivalent of spending just $115 per week, which should be pretty easy for most since AMEX is now much more widely-accepted than before (see below).
Yes: 10% back as a travel credit or 12X Marriott points per dollar.
Phenomenal is an understatement. This is an unbelievably good earn rate, one you won’t get with any other card but the American Express Cobalt Card.
See how welcome bonuses are the key to earning more rewards? 10% back for a year is the minimum you’ll get with the easy points, and I’ll show you in the calculations below how if you want to maximize your earnings, variable-value points are the key to earning even more rewards.
4. Additional Cards
The American Express Cobalt Card also gives you free additional cards (sometimes called supplementary cards). In other words, you can get cards for others in your household so that you can all use it separately to reach the minimum spend requirement for the welcome bonus—and earn more points all the time too.
Usually, the key to earning more free travel in two-player mode (the travel rewards hobby for couples) is to each get the same card to double up the rewards. It’s logical: if you’re using points for two, you need to earn points for two.
But since the Cobalt Card Card’s welcome bonus is unique ($500 per month minimum spend requirement instead of just $1,500 in the first 3 months like most cards), unless you can easily spend $1,000 per month, it’s best to get just one now and another next year (and we have a pro tip for that second card, sign up below if you want to get it).
5. Good Insurance Coverage
Apart from the free travel you earn, the best reason to get into the travel credit cards hobby is to get free insurance coverage, as you might already know. It makes no sense not to be covered since you can get it for free!
The Cobalt Card includes:
- free medical insurance for 15 days (it’s not very wise to leave on a trip without one, pandemic or not)
- free flight delay insurance to get free hotels and meals (I’ve used it many times and love when my flights are delayed)
- free rental car insurance (stop paying the useless extra fees rental car agencies try hard to get you to pay)
- other travel coverage (like hotel burglary insurance, baggage delay insurance, stolen/lost baggage insurance, and travel accident insurance)
- retail protections (purchase protection and buyer’s assurance—to replace your damaged items or extend your warranties)
Free Travel Calculations & How To Use Your Free Travel
By combining the exponential increased earn rates of welcome bonuses with the exponential increased return of valuable variable-value points, you can get a 16% return on your purchases with the American Express Cobalt Card!!! That’s why we keep repeating that having just one card and earning 1% or 2% back on purchases is not the way to earn travel rewards!
We’re talking 16 times more, for the exact same amount of purchases. Rewards worth $60 or rewards worth $1,000. Learning to maximize travel rewards is THE single most important thing travelers should do.
For those who want to see the math, here it is. We’ll split into two scenarios:
- if you use the simple fixed-value points (travel credit)
- if you use the more complex more valuable variable-value (hotel points)
But keep in mind you can mix and match and do half and half or whatever you prefer, without even having to decide in advance. These are truly very flexible points.
Most travelers usually prefer simpler points and less value. The Cobalt Card is great for that since there are no restrictions or rules. The Cobalt Card‘s points are worth 1¢ when used at their fixed-value.
It’s very straightforward: $1,000 in food purchases gives you a $100 travel credit during the first year with the welcome bonus, or a $50 travel credit without the welcome bonus. That’s 10% or 5% back. Amazing.
Here is the breakdown:
- 30,000 points if you spend $500 every month the first year (welcome bonus)
- 30,000 points on those $500s if you spend them in grocery stores or restaurants(regular earn rate)
Those 60,000 points give you a simple $600 travel credit you can apply to literally any travel purchase, to “erase” it. No need to go through a specific website, no need to do anything special.
Minus the card’s $120 fee, that’s a net of $480 in free travel the first year, extremely easily, with no complicated points.
By the way, the $500 every month for the welcome bonus does not have to be spent on food. Any type of purchase counts to unlock that first 30,000 points. It’s just the second 30,000 for the regular earn rate that you maximize by earning 5X on food or gift cards. But you can still earn a lot of free travel even by using a few non-food purchases to reach that $500 a month!
And the first 30,000 points are actually given out as 2,500 per month, so if you can’t reach $500 in January for example, you can still earn that welcome bonus the other 11 months. You can check out our tips to reach your minimum spend, it’s much easier than it looks.
Maybe you’re already familiar with Marriott Bonvoy points, our favorites. It’s a bit more complicated, but the potential value is also much higher. The Cobalt Card‘s points transfer to Marriott at a 1:1.2 ratio. The Cobalt Card is actually how I earn most of my Marriott points, it’s not even with the Marriott Bonvoy Card itself (I got 53 free hotel nights in 2019 thanks to Marriott Bonvoy points, which is over $5,000 in free travel).
By transferring your points, $1,000 in food purchases gives you 12,000 Marriott points during the first year with the welcome bonus, or 6,000 Marriott points without the welcome bonus. That can be worth so much in free hotels if you use your points well and maximize them (a free night in a category 1 hotel costs 6,000 a night if you stay at a time).
Here is the breakdown:
- 36,000 Marriott points if you spend $500 every month the first year (welcome bonus)
- 36,000 Marriott points on those $500 spent if you spend them in grocery stores (regular earn rate)
Those 72,000 Marriott points give you a whopping 11 free nights in Category 1 hotels in many amazing countries.
That can be conservatively estimated to be worth at least $1,120 since a hotel night usually costs $100 when you include the tax (you don’t have to pay any tax when using hotel points: a free night is really free).
Minus the card’s $120 fee, that’s a net of $1,000 in free travel. Same rules as above for the welcome bonus and earn rate.
See how variable-value points can be so much more rewarding? Yes, you need to be more flexible, but we’re talking twice the return as fixed-value points. Getting $1,000 back on $6,000 in purchases in a year is a whopping 16% return.
You can read more about how to maximize your Marriott Bonvoy points and sign up to be among the first to get our free Ultimate Guide To Marriott Bonvoy Points along with our previously mentioned free course on travel rewards.
There is also a way to use American Express Cobalt Card‘s points for flights in a way that could be more valuable than the travel credit, or transfer them to Hilton points. We’ll soon send that information to those who subscribe to our free travel rewards newsletter as well.
Where AMEX Cards Are Accepted
In terms of grocery stores, while not all grocery stores accept AMEX, many do.
I literally changed my grocery store to Metro just for the American Express Cobalt Card; that’s how rewarding it is. Sobeys, Safeway, Whole Foods, and Food Basics are just some of the others that accept AMEX. Some other banners may have locations that accept AMEX locally, but those are those who accept it as a company rule.
Yes, it’s true: American Express cards are a little bit less widely accepted than Visa and Mastercard. But only very slightly, and it’s really not as true as most people think, or as it once was (even Walmart, Tim Hortons, and Dollarama now accept it!).
In 2018 alone, there were 96,000 locations in Canada that started accepting AMEX. There are hundreds of thousands of businesses where you can pay with AMEX. I haven’t updated this figure yet, but during the first half of 2019, over 80% of my own personal expenses were on one of my 4 AMEX cards. Over 80% of expenses is pretty good.
Even if you can’t use it for 100% of your expenses, it would be crazy to deprive yourself of the amazing benefits just because of that.
Deciding If The Cobalt Is Right For You
Hopefully, all the information in this American Express Cobalt review was useful to make a decision. In all cases, I’ll recap by circling back to the 6 types of travelers as promised.
Here’s why the Cobalt Card is right for you based on your situation.
1. Travelers who can easily spend $500 per month on the card
If you can spend $500 every month to unlock the unique yearlong welcome bonus, it’s a great card. If you don’t spend a lot more than that though, just keep in mind the opportunity cost of no longer being able to reach the minimum spend requirements for other cards (an opportunity cost is the loss arising from a certain decision).
For example, the Marriott Bonvoy Card gives you potentially over $500 in free hotels if you spend $3,000 in 3 months, and all year long other cards have great offers in that range. If you’re stuck with just getting one welcome bonus for the entire year, that’s a very slow travel rewards earning rate overall, so do the math for your own spending levels.
Short version: the Cobalt Card‘s welcome bonus is great for just one card, but getting 4 welcome bonuses that are worse is till better than just one, even this excellent one.
2. Travelers who shop at grocery stores that accept AMEX cards
See previous section about AMEX acceptance. If you absolutely do not want to (or can’t) change your grocery store and yours doesn’t accept AMEX, it’s a lot less lucrative. It’s still pretty good, but not a no-brainer like with the 5X on groceries. You could still try to maximize it with restaurants and with an occasional visit to a different grocery store to load up on various gift cards.
3. Travelers who want more Marriott Bonvoy points for free hotels
Alternatively, if you have a small business or any type of side income, you can also consider the Marriott Bonvoy Business Card, which offers a 60,000 point welcome bonus (10 free nights) by simply spending $5,000 in 3 months. And the best thing is you’ll get a second amazing annual free night certificate with that card.
4. Travelers who want the highest possible simple easy-to-use travel credit
As I mentioned, even if you can’t maximize the welcome bonus and don’t want hotel points… earning 5% back as a travel credit with the Cobalt Card for so much of your purchases is an amazing deal in and of itself.
5. Travelers who are just getting started in the world of travel rewards
This is related to the opportunity cost mentioned in point #1 just above. It’s more lucrative to use your spending to unlock many welcome bonuses, since that’s how to earn lots of rewards quickly. But if you’re just getting started in the world of travel rewards, you need to go a little slower at first and maybe only apply for 3-4 new cards the first year, depending on how high your credit score is.
Having multiple cards is better for your credit score, contrary to the very widespread (and very wrong) myth. But when starting, you often don’t have many credit accounts that have been open for a long time, affecting your all-important “age of accounts” component in your credit score. We’ll tell you a bit more about that in our free course, credit scores are very technical.
The short version is that you should keep your old card (or cards) open (ALWAYS) and get the Cobalt Card now. So while the Cobalt becomes an older account over time (by being open for a longer time), you’ll be earning the maximum amount you can. As opposed to if you get a regular less lucrative welcome bonus and have to wait a few months before getting more cards, you’ll be stuck only earning the regular 1% or 2% earn rate.
And if you read all this, hopefully you now know how terrible 1% or 2% is, and you should avoid it.
6. Travelers who don’t want to maximize their free travel by getting multiple cards
Essentially the exact same reasoning as that previous one. If you’re going to deprive yourself of hundreds or thousands of dollars in free travel by not getting multiple cards, then at least get the card with the best earn rate.
The earn rate is absolutely less important and less lucrative than welcome bonuses. There’s absolutely no debate. But if you’re not going to get welcome bonuses, then and only then the earn rate is vital. And the Cobalt Card has the best earn rate.
Comparison With The Marriott Bonvoy Card
But spoiler alert: I have had both cards for 3 years and if you are one of the 6 types of travelers I just listed, there isn’t really a reason for you not to do the same.
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The American Express Cobalt Card is one of the best in Canada. If you want to maximize your free travel, chances are it’s a great card for you. With the redemption flexibility, the amazing earn rate, the great welcome bonus, the free additional cards, and the good insurance coverage, it’s no surprise that we at Flytrippers consider this one of the best credit cards in Canada for travelers.
Have any questions on the Cobalt Card? Ask me in the comments below.
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