Update: This offer for the Citi Prestige® Card has expired. Learn more about the current offers here.
For a while there have been rumors of changes coming to The Platinum Card® from American Express, probably in response to the Citi Prestige® Card and Chase Sapphire Reserve℠. Yesterday we learned that the Platinum Card will offer 5x points on airfare purchased directly with airlines as of October 6, 2016.
Well, American Express has now put out a press release about the changes, so I figured I’d cover them in greater detail in this post.
Amex Platinum Personal Card changes
The Platinum Card® from American Express will offer 5x Membership Rewards points on airfare booked directly with airlines or through American Express Travel as of tomorrow, October 6, 2016. There’s no cap to how many bonus points you can earn through this offering, and this only applies to the personal card, and not the business card.
Amex Platinum Business Card changes
Interestingly American Express is introducing different benefits for The Business Platinum® Card from American Express. Specifically, Business Platinum cardmembers get the following benefits:
- Earn 1.5x Membership Rewards points per dollar spent on any purchase of $5,000 or more
- Earn 50% points back when using Membership Rewards Pay with Points through American Express Travel to book a flight with your selected airline
The 1.5x points will be useful for businesses that make big purchases. On the personal side we already have something like this with the Amex EveryDay® Preferred Credit Card, which offers a 50% points bonus when you make at least 30 transactions per billing cycle.
Furthermore, there’s potentially a lot of value with getting 50% points back when using Pay with Points. Through Pay with Points, you can typically get one cent of value per point. So a $1,000 ticket would cost you 100,000 points.
With this new benefit you’ll get 50% of points back, meaning you’d get a refund of 50,000 points. That means you can potentially get two cents per point towards the cost of an airline ticket, which is huge.
Do keep in mind, however, that this is only valid for your selected airline (you need to choose one each year, and it’s the same as the airline for which you choose your $200 airline fee credit).
Still, if you fly one airline often, this has the potential to be very valuable. Assuming you can pool all your Amex points towards these redemptions, you could maximize your points on cards like the Amex EveryDay® Preferred Credit Card and American Express® Gold Card, and then could redeem each point for two cents towards the cost of an airline ticket in conjunction with the Platinum Business Card.
Existing American Express Platinum benefits
The above new perks complement the existing perks on these $450 (business) or $550 (personal) annual fee cards, which include the following:
- $200 annual airline fee credit
- Access to Boingo hotspots
- Access to American Express Fine Hotels & Resorts
- Access to Delta SkyClubs
- Priority Pass Select membership
- Access to the American Express Centurion Lounges in Dallas, Las Vegas, Miami, New York, San Francisco,Seattle, etc.
- A Global Entry fee credit
- 10 complimentary Gogo wifi passes (only for those with the business card)
What do I make of these changes?
Obviously this represents a very nice improvement on the part of American Express.
On one hand I was expecting more, as this still isn’t fully competitive in some ways with the products from Chase and Citi. The airline credit is both the smallest and most restrictive of any of those cards. Also, 5x points on airfare is great for people who spend a lot on airfare, but not as widely useful as the bonus categories on the Prestige and Reserve.
At the same time, I already thought the Platinum Card was worth keeping. The way I see it, the card costs me ~$250 – $350 per year “out of pocket,” given that I value the airline fee credit at close to face value.
For the $250 – $350 I’m getting access to Amex Fine Hotels & Resorts, Boingo hotspots, Delta SkyClubs, and Centurion Lounges. To me that’s worth it. So anything else is just icing on the cake, and makes the card more worthwhile. Still, in terms of the relative value proposition, the card has certainly been slipping.
Crunching the numbers on 5x points for airfare
Previously I could earn at most 3x points on airfare with the Citi Prestige® Card or Chase Sapphire Reserve®. Now I can earn 5x points on airfare. I value all of the above points roughly equally, at ~1.7 cents each. In other words, this is an additional ~3.4% return on airfare.
It is worth noting that both Chase and Citi still offer better travel protection. However, keep in mind that also applies if you’re only charging part of the ticket cost to a credit card. For example, American Airlines gift card purchases typically qualify as “airfare,” so you could use your Platinum Card to buy American Airlines gift cards and earn 5x points, and then could pay a very small portion of the ticket cost with a card that offers better protection, if you’re so inclined.
So it’s pretty easy to calculate the breakeven point on this benefit. At a marginal return of ~3.4%, you’re getting an additional $34 for every $1,000 spent on airfare:
- If you spent ~$13,000 on airfare you’d totally recover the $450 annual fee
- If you spent ~$7,500 on airfare you’d recover the $350 “out of pocket” cost that I consider this card to have, after accounting for the $200 airline credit at face value
But like I said above, I consider this card to be worthwhile just for the benefits, so any additional “return” through spend only helps offset that fee.
Long term I hope we see more changes to the American Express Platinum products. In the meantime, 5x points on airfare on the personal card is pretty awesome. Furthermore, a 50% rebate on “Pay with Points” airfare redemptions with the business card is great as well, as it means you can get two cents per point of value.
I suspect this might just be Amex’s immediate response to the recent publicity the Sapphire Reserve has been generating, with a bigger response coming eventually.
What do you make of these changes, and how do they impact whether you’ll apply for/keep/cancel a Platinum Card?
Non-Affiliate Product Disclaimer: The information for the AmEx Everyday Preferred has been collected independently by One Mile At A Time. The card details on this page have not been reviewed or provided by the card issuer.