Yesterday we learned about some major changes being made to The Platinum Card® from American Express as of March 30, 2017. The card will be seeing a $100 annual fee increase, from $450 to $550 per year (Rates & Fees). Of course there are some positive changes to offset that as well. Here’s how they’re described:
Starting on March 30th, 2017, consumers with The Platinum Card will receive exclusive access in the Uber app to a new Uber Rides with Platinum benefit, which provides up to $200 annually in Uber credits for U.S. rides and automatic VIP status where available1. Platinum Card Members will also receive 5X Membership Rewards points on eligible hotels booked on amextravel.com2. This is in addition to the recently unveiled 5X Membership Rewards® points on airfare booked directly with airlines or American Express Travel3. Card Members will also get access to an expanded Global Lounge Collection℠4, a new Global Dining Collection5, more global events, enhanced mobile servicing options, and all of the other benefits that currently come with Platinum Card Membership.
So, what are these changes really costing Amex, and are they impacting whether or not I’ll hold onto the card?
5x points on prepaid hotels booked through amextravel.com
Last year Amex began offering 5x points on airfare purchased directly with airlines, which is huge. That’s a benefit that can potentially be pretty costly for Amex. Even at a conservative valuation of a penny per Membership Rewards point (which is very low), Amex is dishing out 5% rewards on these purchases, when their merchant fee is probably just a third of that. But ultimately it’s an investment in the product, and they think it will make people use the card more. Which is probably true.
So when I first saw 5x points on hotels, I was excited as well. However, the hotels have to be booked through amextravel.com, and only prepaid rates are eligible.
Amex is acting as a travel agency in this case, meaning they’re getting at least a 10% commission on bookings made through there. In other words, this new benefit isn’t costing Amex a dime — instead it’s an additional source of revenue for them. Even if they’re dishing out ~5% rewards, they’re getting a 10%+ commission on those bookings.
Add authorized user Gold cards at no cost
Amex is also letting those with the Platinum Card add authorized user Gold Cards at no extra cost. This is a card that doesn’t have many benefits, and that offers one point per dollar spent. This is a benefit that isn’t costing Amex anything. Instead it’s a way for them to get more charges, so it’s also a source of revenue for them.
Both of the above are smart changes that logically should have been made before, as they’re a source of revenue, and not a cost center.
Uber VIP status and $200 in credits
I assume Uber is giving VIP status to Platinum members for free. It doesn’t cost Uber anything, and doesn’t come with many rewards.
On top of that, you get $15 in Uber credits each month, and an additional $20 in Uber credits in December. Let’s take a look at the terms:
Only Basic Card Members on a Platinum Card account are eligible for Uber VIP and monthly ride Credits. To receive this benefit, you must have downloaded the Uber App version 3.219 or later for iOS or version 3.126 or later for Android and your eligible Platinum Card must be a method of payment in your Uber account. If you are assigned a new Card number, you must update your method of payment in your Uber account. Cards added to your Uber account through a third party such as Apple Pay or PayPal will not be eligible. A Platinum Card account may receive this benefit on one Uber account. If the same Card is added to multiple Uber accounts, only the first Uber account to which the Card is added will receive the benefit. Uber VIP is available in select cities and is governed by Uber’s terms and conditions. To redeem monthly ride Credits, you must select to use the Credit in your Uber app prior to completing the Uber ride. The discount will not apply to previous Uber rides. New and existing Uber users are eligible. Uber will apply discount at the point of sale. There is no limit to the number of rides you may apply the Credit to each month, up to a total of $15 in Credits per month. Each year in December, you may apply up to $35 in Credit. The discounted cost of a ride will be displayed on your post-ride email receipt. If you are eligible to receive additional Membership Rewards points on your ride, points will be awarded on the balance of the cost of the trip after Credits are applied. Credit may be applied to all Uber car types and cannot be applied to other Uber services. Credit may only be applied to rides within the United States. Monthly ride Credit expires at 11:59 PM local time on the last day of each month. Unused Credit will not carry over to the following month. Credit will be applied for the month in which the ride is completed. If ride is eligible for another promotion that you have added to your Uber account, the promotion will be applied before the Credit. Certain Uber-branded credits may be applied to your ride balance prior to this Credit.
The good news is that the Uber credit can be used towards multiple rides, and it will be applied after all other promotions are applied (so I’m not sure if it can be applied to rides where others promotions are being used, or not).
It’s one thing if they were adding $200 in Uber credits to your account at the beginning of the year to use as you please, but instead we’re seeing them add it in small increments. The goal of course is to get more people using Uber more consistently. Keep in mind that the average person with the Amex Platinum Card is older than the average consumer, so I suspect not as many are using Uber (since it’s most popular with young people).
So I suspect this benefit is costing Amex a small fraction of the $200 “face value,” given that Uber is hoping to get new, consistent riders out of this. That being said, I think many of us will still get value out of this. I certainly know that $200 in Uber credits as awarded by the Amex Platinum Card are worth at least $100 to me.
The Priority Pass benefit is being improved
The other cool change is that the Priority Pass membership now allows you to take in two guests, which wasn’t previously the case. This is an area where Amex was lagging, as both the Citi Prestige and Chase Sapphire Reserve allowed guesting privileges. This is a positive change, though I suspect for many of us there won’t be much value in it, since we already have a Priority Pass membership with guesting privileges.
Will I keep the Amex Platinum Card?
Amex is describing these changes as providing “a new generation of benefits for its iconic Platinum Card.” I’d be lying if I didn’t say I was a bit disappointed.
5x points on hotels? Amazing. 5x points only on hotels booked through Amex? Not so great… especially when you consider that the Amex Platinum Card offers SPG Gold (and by connection Marriott Gold) and Hilton Gold, so it’s ironic that you can’t get your benefits and earn points on stays booked with Amex Travel.
$200 in Uber credits? Great. Them being split into $15 increments per month (with $20 in December)? Still good, but slightly less great.
But personally I absolutely plan on keeping the card. For me the math is easy. There’s a $550 annual fee, and for that:
- I get $200 in Uber credits, which I conservatively value at $100 (which offsets the annual fee increase)
- I get $200 in airline fee credits, which I more or less value at face value
- I get Delta SkyClub access, Centurion Lounge access, access to Fine Hotels & Resorts, etc. (let’s not even put a value to that right now)
- I get 5x points on airfare, which I value at an ~8.5% return on airfare spend; to me that alone more than justifies the balance of the annual fee
So while I would have liked to see richer benefits and more creativity, I do still think this card is a keeper, at least based on the amount I spend on airfare.
How about you — do these changes to The Platinum Card® from American Express impact whether or not you’ll hold onto the card?
The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Platinum Card® from American Express (Rates & Fees).