Why isn’t upgrading my card a no brainer?

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Update: This offer for The Business Gold Rewards Card from American Express OPEN is expired, but there’s currently an opportunity to earn 50,000 Membership Rewards® points after you spend $5,000 in purchases on the Card within your first 3 months of Card Membership. Learn more about the special offer here.

When logging onto the American Express website there’s occasionally a banner at the top of the page with an offer to “upgrade” an existing card. In my case, I’ve had a banner for about a month now offering 25,000 Membership Rewards points for upgrading my The Business Gold Rewards Card from American Express OPEN to The Business Platinum® Card from American Express OPEN. For reasons I can’t quite explain I haven’t made the upgrade, and then they finally sent me an email about it today, and I’m starting to wonder why I haven’t.

I originally applied for the The Business Gold Rewards Card from American Express OPEN card last September.

But even though the numbers “add up,” I’m still kind of torn as to whether I should upgrade or not. The American Express Business Platinum card comes with a hefty $450 annual fee, though offers lounge access, a $200 per year airline fee credit, plus the 25,000 points for upgrading.

Per my recent valuation of Membership Rewards points, I value them at 1.6 cents each, so I’m getting ~$400 worth of points for making the upgrade. Plus I get the $200 airline fee credit both this year and next year, which I can use to purchase American Airlines gift cards in small increments (more or less good as cash to me).

But what’s really holding me back is that I also have The Platinum Card® from American Express, so I already get lounge access. And there’s something that pains me about “paying” for two lounge memberships for no reason. I don’t want to cancel my existing Platinum Card® from American Express since it’s one of the longest account histories I have, and helps keep my credit score high.

To the best of my knowledge there’s no credit inquiry for upgrading a card, so this should be a no brainer, right? $450 for 25,000 Membership Rewards points, $200 in American Airlines gift cards now, and (hopefully) $200 in American Airlines gift cards next year? But why can’t I make up my mind and commit?

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Comments

  1. your credit history among AMEX cards are the same. Even your recent cards will have the opening date from the first card. I see no penalty of closing the card as long as you have multiple AMEX cards

  2. “since it’s one of the longest account histories I have, and helps keep my credit score high.”

    If it’s not THE longest, I’m not sure this matters. And I certainly wouldn’t pay a huge annual fee just because it was my oldest credit card. Sometimes I think the churning gurus blow this stuff out of proportion. Then again, my oldest card is an REI card with no annual fee, and actually gets nice discounts at REI (where I spend the other half of my life!) thus making it a keeper, so what do I know….

  3. Can’t you upgrade, cancel after you get both $200 credits (this year and next), then get a personal PRG to continue enjoying those benefits? You don’t lose the long credit history that way.

  4. Sorry guys, I should have been clear. The AmEx Plat *is* the AmEx card with the longest credit history for me, so can’t cancel it.

  5. @ marZ — Right, and I’d definitely cancel the biz Plat card within a year if I got it. Don’t want to pay annual fees on it beyond the initial bonus.

  6. I never upgraded my account as well. Although looking back on it, I’ll most likely regret it. 25K points plus $400 in airline incidentals (200 for each year) is easily well worth it.

  7. Keeping the oldest card is overrated. The history doesn’t get wiped out when you cancel, but rather 10 years later. And it’s still possible to downgrade to Amex green, right?

  8. Is there a minimum spend for the 25,000 points? I guess i would do it if you can get $400 of AA certs plus the 25k points, all for $50.

  9. Reading the fine print now, following my other comment:

    “Receive 25,000 Membership Rewards ® bonus points with your first purchase within 90 days, and another 25,000 points upon spending $40,000 within the first 12 months”

  10. I do not see how paying $450 for $400 airline credit plus 25000 points a good deal when you can cancel, wait for a promo and then get the same deal with 50,000 points.

    I guess you save one credit pull….

  11. @lucky it doesn’t matter the AMEX plat is your oldest one. AMEX use the very first day you became a member to determine all of your future cards. even if you close everything and reopen a year later, you still get that very same date. It’s also trick to build up credit history every quick

  12. @Lucky, regarding upgrading your card without a credit inquiry, I can confirm that’s how it worked for me, at least for a personal card. I upgraded my PRG to the Mercedes Benz Platinum card in June and did NOT get an inquiry for that change.

  13. @Andras…why not do both? Upgrade for $400 and the points, cancel, and sign up again with the next promo? Drags out the process a little bit, but I don’t see how it can hurt.

  14. Two important questions below. Please provide any insight!

    Context: my gf has an old (11+ years) Amex Green charge card. It was opened in 2001 and then in 2006 she opened a blue cash. Of course it shows as opened in 2001 as per Amex backdating. And now she is going to open an Amex starwood. My question is: since the Amex Green has an annual fee and is essentially a *** of ***, we want to close it. What will then happen to NEW Amex cards opened after the 2001 green card is closed.

    Question 1: will they
    a) backdate the new card STILL to 2001
    b) backdate to the most recent opened card i.e. 2006

    Question 2: is backdating a TRUE backdating or a PHANTOM one? for instance your credit report will NOT show ‘ok’ for 10+ years even if the card backate, since no months of payments were reported. So…is it just an artifact or is backdating TRULY changing the average age of accounts used in the FICO score?

  15. “To the best of my knowledge there’s no credit inquiry for upgrading a card”

    Are you sure about this? I recently applied for Chase Freedom, and initially got denied for adding too many credit cards (in the end I moved some credit from other cards and got the Freedom). I’m considering changing my Citi HHonors to a Citi HHonors Reserve soon, but was going to wait a few months because I was afraid of another inquiry. Also, if you change a card (rather than apply new), do you still get the signup bonus?

  16. I had the exact same situation and why I did not take the 25000 MR offer is becuase I wanted to be solicited for the 100000 MR offer for the Biz Plat if you spend 10K. And it worked, since I got that solicitaion recently. Hang tight for the bigger bonus.

  17. Lucky, I got my first personal Amex last year, but my credit reports show me having an Amex since 2007, when I was first put as an AU on my parents’ card. That account was closed several years ago.

  18. When I look at my credit report, each of my five amex cards shows an account number that is different from the number that is actually on my cards, and, in fact, the numbers are all very close to one another. Each of the three credit reports, for each card, shows my “date opened” as 1991, which is when I got my first Amex. Some of these cards are less than a year old. Two are biz and three a personal. None of the five cards I have now is that old — this was an old green card.

    My perception is that what people are reporting is correct — Amex tracks your account, and so long as you retained at least one card, your history remains intact. I can’t be sure, but that’s what it looks like from my credit report.

    So, you should be able to get a plat biz card near the end of your current personal plat cycle and still maintain that long credit history so long as you have at least one bridge card. I cannot be certain of that, but there seems like a fair amount of evidence for it on my credit report.

    Lucky, I think the bigger question is why would you forego the extra 25k that you can get from opening a new platinum business card during a 50k promo just to avoid a single pull and spend requirement. That’s a separate question. Even if you’re prepared to pay overlapping fees, don’t just upgrade using the link — apply for a new card. There may be a downside to doing this, though — I think the T&C on the plat card applications for 50k say you cannot have held a biz product (including a gold card) for 12 months. So, upgrading may be your only option without cancelling.

    One other thing to keep in mind. Even if you have an upgrade link, you cannot upgrade if the card you are upgrading has not been open for 12 consecutive months. This is due to some new federal legislation that precludes an issuer from raising your annual fee, even with your consent and even if you get more benefits, within the first 12 months. Accordingly, if you try to upgrade, you will likely be stalled out in the application. This happened to me, and I called, and they told me about the 12 month rule, but they were cool about it and threw me some extra points.

    Anyway, here’s my proposed Amex Platinum strategy: I’m in year two of my personal plat. I kept it because they gave me 15k retention, which I figured was just barely worth it combined with the additional $200 airline credit. I have cancelled my gold biz card in preparation for meeting the 12 months. When my plat comes close to renewal, I’ll apply for the Mercedes Benz plat, take the $400 in airline credits in 2013 and 2014. Once 2014 rolls around, I’ll take the first 50k plus offer on the platinum biz card that rolls around that I’m eligible for.

  19. Similar situation here. I have a personal Plat, which renewed in March, and BRG that I got last Nov during the one-day 75K bonus offer. The annual fee on the BRG was waived and comes due for next year presumably on the Nov or Dec statement.

    I’ve had the 25K offer to upgrade to biz Platinum for a while. I’ve been thinking about jumping on it since they’ve changed the terms about eligibility for a new application if you’ve had ANY biz card in the previous yr. Then I’d be able to take advantage of the $200 airline fee (read: GC) benefit in 2012, and again in 2013. I would also have the same from the personal card in 2013 (already used it up this year).

    Next year, I could cancel one of the two, since I don’t need TWO expensive cards with lounge access.

    I guess I have another couple of months to think about it before the BRG fee comes due.

  20. @Paul W
    How were you solicited for the 100k offer, banner, email or during a phone call to AMEX?
    thanks!

  21. I just took this offer this year and also delayed a couple months before I jumped on it. A couple notes from my experience.

    I was charged a pro-rated annual fee (maybe $150) and assume I’ll get dinged another $450 on 1-1-13.

    There was no credit pull when I changed from gold to platinum. Especially with the 12 month rule in place now for AMEX bonuses, taking the 25k for no credit pull and a prorated fee seems like a no brainer.

  22. I just accepted the platinum last month with the 25K MR.

    Since I have the platinum citi and I fly AA, and have access to AA Admirals thru Amex, was wondering how you can get those gift cards. Thought that these are prohibited.

  23. I waited a few months and the offer to upgrade changed to 50,000. I couldn’t resist that deal. Wait them out.

  24. You’ll be pleased to know Amex is kind of a special wonder as far as credit reporting goes. For every AMEX account, they report it as opened the month you became an AMEX customer, not the actual month you opened it.

    (Of course, you’d still want to check if your business line shows up on your personal report at all.)

  25. (Above applies to AMEX-serviced accounts. Amex from other banks such as BOA/Citi/etc report the usual way.)

  26. Slightly off-topic, but logging into my Amex Gold account today, I noticed banner offer for 10K points for enrolling in the Extended Payment Plan. Any thoughts on this? It seems you get the points in about 6-8 weeks.

    Since I always pay off my balances every month, I dont see the harm in enrolling in the Plan. Any experience with this from others?

    The T&C note that only those targeted would benefit from the offer…

  27. About once a month I get an offer in the mail to apply for a Plat Amex. Offer is 100k points with 10k spend w/in approx 90 days or so. I have an Plat, husband had the Plat but cancelled & will reapply in 24 mos. The offer is addressed to our business.

  28. I upgraded & got the bonus 25,000 within 2 weeks after 1 spend & no inquiry.

    I also got 5,000 points for enrolling in EXPO after de-enrolling with the gold I had.

    they prorate the $175 free I had until November & dont charge the$450 RIGHT AWAY ONLY THE PRORATED AMOUNT through October 31.

    then I will cancel or downgrade to Green.

    Simple 🙂

  29. Ditto on @joediver’s comment about waiting them out. Also, consider upgrading in late Nov./Dec. Since the fee is pro-rated, that will allow you to take advantage of 2012’s $200 credit at the least cost. I did that on a personal card a while back. Intended to cancel before the full annual fee, but when I called to do so, they offered me a retention bonus to stay on.

  30. @paul W – hOW LONG IDID YOU WAIT i HAVE HAD THE OFFER FOR 5Months & the offer never went up I just kept getting emails for the 25k offer & banner ads.

  31. My solicition for the 100K biz plat came in the snail mail to my business address. I have had my biz PRG open for about 8 months when it came.

  32. I had this same issue! I kept my business platinum over the personal platinum card! Now after doing so for 4 years I decided to rid of the business platinum card and get the personal again. I don’t think theres a right or wrong way to go about your decision. I think there are a few things the business card offers that the personal platinum doesn’t like discounts at fed ex and a few other perks. That said 2 annual fees of $450 is to much. Not about can you afford it but, its about paying for basically the same perks with two cards.

    I regret letting go of the personal years ago(4) and Im going back and letting go of the business card(platinum)! Its a hard choice and I wouldnt be shocked if in a year or 4 years from now if I dont regret letting go of the business platinum card! HAHAAH!

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