5 Reasons The American Express Cobalt Is One Of The Best Cards For Travelers

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

First, even though it also has no minimum income requirement, the Cobalt Card is not for everyone (unlike the Marriott Bonvoy Card that pretty much every Canadian traveler should get).

The American Express Cobalt Card is especially good for those who check ONE of these 6 main boxes.

Travelers who…

  1. can easily spend $500 per month on the card
  2. shop at grocery stores that accept AMEX cards (many do)
  3. want more Marriott Bonvoy points for free hotels
  4. want the highest possible simple easy-to-use travel credit
  5. are just getting started in the world of travel rewards
  6. 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:

  1. The option to redeem as fixed-value points or variable-value points
  2. The best earn rate on most purchases
  3. A great welcome bonus
  4. Free additional cards
  5. 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 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.

 

Fixed-Value 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.

 

Variable-Value Points

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 $1,500 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

If you got the Marriott Bonvoy Card and are now addicted to free hotels, the Cobalt Card is by far your best option to earn a lot more.

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 50,000 point welcome bonus (8 free nights) by simply spending $1,500 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

We’ll have a separate post to compare the Marriott Bonvoy Card and the Cobalt Card for those who are huge fans of free hotel nights like me, since this post is already long enough as it is!

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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Summary

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.

 

Explore awesome destinations: travel inspiration

Learn pro tricks: travel tips

Discover free travel: travel rewards

 

Featured image: Indonesia landscape (photo credit: Hugo Matilla)

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Andrew D'Amours

Andrew is the co-founder of Flytrippers. He is passionate about traveling the world but also, as a former management consultant, about the travel industry itself. He shares his experiences to help you save money on travel. As a very cost-conscious traveler, he loves finding deals and getting free travel thanks to travel rewards points... to help him visit every country in the world (current count: 61/193 Countries, 46/50 US States & 9/10 Canadian Provinces).

This Post Has 9 Comments

  1. Catherine Sanderson

    Big fan of you guys. Been following you for a couple years now. Just got the AMEX Cobalt card and will be gong after the 72,000 points at $500 per month. Using your tip to buy gift cards at Sobey’s which is where AMEX is accepted here.

    Got the MB Amex last year and enjoyed 10 free nights in Spain at the Hotel AC Almeria in February just past. Wonderful! AND just got my free night certificate.

    Very interested in why and how you use both your Cobalt and your MB Amex cards. Why keep both? Waiting anxiously for your new posting on that topic.

    All the best and keep up the great work.

    1. Andrew D'Amours

      Hello! Glad we could help:) So basically, I use my Cobalt for most of my spending (outside of the welcome bonuses for other cards that I regularly unlock during the year) because I buy gift cards to everything at my grocery for 6x Marriott points.
      Everything else that is not a “bonus category multiplier” on any other card, I always use the Marriott card for 2 pts per dollar (but even if I wouldn’t, it makes little sense to cancel that one because of the incredibly valuable certificate each year).
      For other non-grocery category multipliers, I use a few other cards. For example, my Platinum Card has great travel insurance and 2X points on travel, so I use it for the travel bonus category multiplier.
      Hope this answers your question:)
      Glad you enjoyed Spain, I actually stayed at that hotel myself in October, but just for one night on a coastal roadtrip!

      1. Catherine Sanderson

        Yes that helps alot. Thanks again. Merci Beaucoup!!

  2. Sandra Dance

    Since we’re only able to eat our groceries these days and not travel, do your points expire?

  3. Catherine Sanderson

    Okay, that’s what I feared but I may still be able to get the $500 per month spending goal anyway. Thanks for getting back to me!

  4. Catherine Sanderson

    Can you tell me if you buy groceries at Walmart do you get the double bonus points?

    1. Andrew D'Amours

      Hi Catherine, no banks can’t know what you buy. Category bonuses are based on how the retailer is coded, so you have to be in an actual grocery store to earn 5X. Some convenience stores code as food establishments too, but Walmart will not unfortunately.

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