The American Express Personal Platinum card has long been considered the overall best travel reward card, notwithstanding its steep annual fee. During a pandemic which prevents international travel and also severely limits domestic travel, the value of the card is in question. American Express has made some strong moves to improve the value proposition but the changes have not been all good. So, is the card still worth it? Let’s take a look.
The Platinum Card Benefits
The American Express Person Platinum Card comes with a hefty annual fee of $699. However, if you travel, it has always been fairly easy to justify the annual fee particularly taking the welcome bonus into account, which was recently 60,000 Membership Rewards (MRs) points (more on this later).
So what do you get for the $699 annual fee? Here is a summary of the benefits:
· Earn 3 MRs for every $1 in dining purchases.
· Earn 2 MRs for every $1 in travel purchases.
· Earn 1 MRs for every $1 in all other card purchases.
· Receive a $200 travel credit every year.
· Airport Lounge Access: Centurion Lounges, International American Express Lounges; Plaza Premium Lounges; Delta Sky Club (when flying Delta); Airspace Lounges; Escape Lounges (US locations); Priority Pass Lounges; Executive Lounges by Swissport (Canadian locations); Quebec City’s Jean Lesage International Airport VIP Lounge
· Hotel Status: Radisson Rewards Gold Status; Hilton Honors Gold Status; Marriot Bonvoy Gold Elite Status; Shangri-La’s Golden Circle Jade Membership;
· Travel Insurance: medical; cancellation; interruption; flight delay; baggage delay; lost or solen baggage; car rental; hotel burglary; travel accident;
· Retail Coverage: Purchase Protection Plan; Buyer’s Assurance protection Plan.
The suite of travel benefits provided by the American Express Personal Platinum are exceptional. The $699 annual fee is also partially offset by the $200 annual travel credit, making the real net cost of the card $499 per year.
In normal times, the lounge access easily makes the Platinum card worth it if you travel frequently and value access to airport lounges. The Platinum Card comes with a Priority Pass membership which provides you and one guest with free access to airport lounges under the Priority Pass banner. If you consider that the Priority Pass Prestige membership costs $429USD and only entitles the cardholder to free access with each guest costing $32USD per visit, the net annual fee of the Platinum Card has a strong value proposition if you are a frequent traveller and airport lounge user given that you can also bring in a guest. Of course, this assumes that you aren’t travelling business class or have airline status which already grants you airport lounge access.
In the pre-COVID19 era, the value of the Platinum card was a given if you were a frequent traveller. The welcome bonus of 60,000 MRs could typically be valued at a minimum of $600. With the increase earning power for travel and dining purchases, the earn rate was significant. Furthermore, the points could be redeemed for 1 cent per point or transferred to Aeroplan on a 1:1 basis. For all of the above reasons, in the points game the American Express Personal Platinum card has typically be viewed as one of the most valuable cards.
There is no doubt, however, that the value proposition of the Platinum Card changed when travel restrictions were imposed. The travel credit became more difficult to use given that people couldn’t travel. The airport lounge access, and all the other travel benefits, became pretty much useless to most people due to travel restrictions, reduced flights and most people unable or unwilling to fly. It became a card with a hefty annual fee with great travel benefits that nobody could use because nobody could travel. American Express clearly recognized this and quickly made short term moves to make the card more attractive by offering benefits that were not so travel centric.
Changes to the Amex Personal Platinum Card in the COVID Era
In order to keep the Platinum card relevant, this month Amex announced a temporary increase in the earn rate on purchases by doubling the MRs normally earned per dollar of spend until July 20, 2020. Personal Platinum Card holders now earn 6 MRs per $1 dollar spent on dining purchases; 4 MRs per $1 spent on travel purchases; 2 MRs per $1 spent on all other purchases. That is an incredible earn rate! The increased earn rate is in effect until July 20, 2020.
In addition, Amex also doubled the redemption rate when you apply your points to your credit card bill. Normally 1,000 MRs could be redeemed for $10 off your credit card bill. Now, until July 20, 2020, those same points are worth $20!
With these two changes, the value of the American Express Personal Platinum card becomes very compelling. For example, if you spend $100 on restaurant purchases (meal delivery services like Uber Eats are included as dining), you will receive 600 MRs. When that dining bill appears on your credit card, you can apply the 600MRs points at a value of $12 as a credit against your bill. That is an incredible 12% return! No credit card in Canada even comes close to that return on purchases. For travel purchases (granted there is less of that going on at that moment) your return is 8% and on all other regular purchases the return rate is 4%.
Finally, American Express has also provided an offer to current card holders for “everyday essentials”.
Card holders can also earn up to a $250 credit for groceries and online food delivery purchases made between June 4, 2020 and August 27, 2020 as Sobeys, Metro, Longo’s and Save-On Foods locations, as well as dining purchases made through Uber Eats. So, if you spend, for example, $250 at one of those grocery stores you will then receive an automatic credit to your credit card bill of $250 – so, yup, that’s a free $250 courtesy of American Express.
The incredible earning rate, increased redemption rate and $250 in free groceries certainly improved the value proposition for the card during times when the travel benefits were practically useless.
The Bad News
While American Express deserves props for altering the card features to improve its value to cardholders, it also made changes making the card less attractive to those who are now thinking about getting the card. American Express has significantly reduced the welcome bonus available to new cardholders, reducing it from 60,000 MRs to 25,000MRs.
Is the Amex Card still worth it?
Like so many things in life the answer is “it depends”. It depends on whether you are a current cardholder or if you are only now considering getting the card.
If you currently hold the Platinum Card, you have already paid your annual fee and have already collected your 60,000 MRs welcome bonus back when you first got the card. In that case, you really have to take your hat off to American Express for the changes they have made to keep the card relevant to existing cardholders at a time when practically nobody is able to travel. The earn rate and redemption rate providing up to a 12% return is unprecedented. The $250 in free groceries or Uber Eats is yet another phenomenal benefit. If you are a current Platinum Card holder, this is the card that should be directing all your spend toward right now (at least until July 20, 2020). If by chance in the near future we are able to start travelling, the travel benefits of the card remain intact.
The calculation changes somewhat, however, if you don’t currently hold the Platinum Card and are considering applying for it. You will, of course, have the $699 annual fee to pay. With the card you will receive a $200 travel credit. While that takes the net annual fee down to $499 per year, the question is whether that travel credit is all that valuable to you if you don’t plan on travelling. However, let’s assume you manage to get value from that credit. Next, you will need to spend $2,000 in the first three months to obtain the Welcome Bonus of 25,000 MRs. YCurrently you will only receive a 25,000 MRs which is worth at a minimum of $250. Clearly not a great value proposition at the moment.
Unfortunately, given that the increased earning and redemption rate only lasts until July 20, 2020, by the time you receive your card it’s likely that you will have very little time to take advantage of the increased earn and redemption rates. Furthermore, you will also not receive the $250 grocery/Uber Eats credit.
The bottom line is that if you are considering signing up for the Platinum card right now, you will not recover your annual fee in credits and the welcome bonus. When you also take into account that currently the travel benefits of the Platinum Card are not all that useful for most people, in my view the Platinum card does not represent good value at this time. It makes far more sense to wait until you can use the travel benefits and await the return (hopefully) of an increased welcome bonus.
If, however, you are currently already a holder of the Platinum Card, enjoy the additional promotions that American Express is sending your way.
Comments