Effective October 6, 2016 personal American Express Platinum cardholders will receive 5x Membership Rewards points on airfare booked directly with the airline or through American Express’ travel website.

Why?

This is an interesting move from American Express and is obviously a response overwhelmingly successful Chase Sapphire Reserve card. By not increasing the signup bonus offer or adjusting the annual feee, it clearly is not an attempt to convince anyone to open a new line of credit with American Express.

The recent trend of offering multiple bonus points on various categories has made the Platinum card obsolete for daily use. There is no reason to use the card at a restaurant (3x points for Chase Sapphire Reserve), at a gas station (3x points Citi ThankYou Premier), on airfare (3x points Citi Thank You Premier, Citi Prestige, AMEX Premier Rewards Gold, or Chase Sapphire Reserve), or almost anything else for that matter. Not to mention the “travel” category from other premium credit cards is much more generous than the new Platinum card’s airline category. Also, consumers now open credit cards which align with their monthly spending habits to take advantage of bonus categories.

As a result, American Express Platinum cardholders carried the card and rarely used it. It may seem like a waste of $450, but if you use the Centurion Lounges, the $200 airfare credit, a few Delta Sky Club visits, and activate SPG and Hilton Gold Statuses the cost is very justifiable. Unfortunately for American Express, they do not make money when the card remains idle in your pocket (while you eat delicious food in the Centurion Lounge). AMEX makes money by charging merchants a transaction fee (approximately 3.5%) to the merchant each time you swipe your card. Visa and MasterCard only charge 2.5% by contrast. If customers are not actually using the card, American Express is not making money. The 5x bonus is an attempt to convince existing cardholders to use the card again, but it definitely is not alone enough reason to apply for the card.

Should I Apply?

If you frequently fly out of airports that offer Centurion Lounges, Delta Sky Clubs (must fly Delta), or occasionally stay at Hilton & SPG properties (not enough to retain status), and spend a TON ($10,000+/year) on airfare, sure! If not, there are much better premium credit cards on the market to apply for (see above). If you are only opening a card to get a large signup bonus, it would definitely be better to apply for the Chase Sapphire Reserve or Chase Sapphire Preferred! American Express occasionally offers 100,000 point signup bonuses on the Platinum card, but the current public offer is just 40,000 points for spending $3,000 in the first 3 months. Also, now that Chase officially implemented the 5/24 rule, it is important to apply to new credit cards sparingly.

Whats Next?

I do not think American Express is done with improvements to the current credit card lineup. I am still waiting to see what American Express will do with the new “Tier One” trademark and would not be surprised to see a new card announced later this year or early 2017 (to avoid paying additional travel credits). Personally, starting today (Oct. 6, 2016) I will be using my American Express Platinum card to pay for airfare because 5x points is enough of an incentive for me to diversify my points. I would NOT recommend applying for the personal version of the American Express Platinum card simply because of the recent enhancements.

Bottom Line

Earning 5x Membership Rewards points when using your American Express Platinum card is a great benefit, but the lackluster signup bonus, high annual fee (after travel credits), and lack of other bonus categories does not make applying for the card worthwhile. I look forward to future improvements to the Platinum Card and am excited to see what AMEX’s Tier One trademark is all about.

 

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