Amex PRG Card Still Worth It For Airfare Spend?

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Reader Jay asked the following question on the “Ask Lucky” page of the blog:

Hi Lucky,

I’m approaching the annual fee on my AmEx PRG card and I’m torn about what to do. On one hand, I am extremely displeased about them discontinuing the 15k bonus after $30k spend and I think $175 is a little on the high side. On the other, I easily put $30k of airfare on the card yearly do to business travel and the 3x bonus more than covers the fee.

My question is: is there a better (or comparable) card to put my airfare spend, or should I suck it up and continue with the AmEx PRG?

I also put airfare spend on the Premier Rewards Gold

I also have the Premier Rewards Gold Card from American Express, and for years have been putting my airfare spend on the card. It offers triple points on airfare purchased directly with airlines, which makes it the most rewarding card for “generic” airfare spend.

AmEx-PRG

The catch is that the card has foreign transaction fees, so I only use it for US-dollar denominated airline tickets. For foreign airline tickets I use the Chase Sapphire Preferred® Card, which offers double points on airfare but doesn’t have foreign transaction fees.

The other downside to the Premier Rewards Gold Card is that it has a $195 annual fee, which does seem kind of steep. I’ve always been able to justify it since up until now you’ve received a 15,000 point bonus for any year in which you spend $30,000 on the card.

In other words, $30,000 of airfare spend earned you 105,000 Membership Rewards points.

The way I’ve always viewed it, the annual threshold bonus more than compensated for the annual fee, and the bonus categories on top of that were the icing on the cake. Unfortunately American Express is discontinuing that threshold bonus as of 2015.

So is it still worth keeping the Premier Rewards Gold for airfare spend?

Using the Chase Sapphire Preferred as a replacement?

I have both the Chase Sapphire Preferred and Premier Rewards Gold. Let’s assume that Membership Rewards and Ultimate Rewards points are roughly equally valuable (which I more or less believe to be true).

If you put $30K of airfare spend (as Jay does) on the Chase Sapphire Preferred you’d earn 60,000 Ultimate Rewards points, as opposed to the 90,000 Membership Rewards points you’d earn with the Premier Rewards Gold. At a value of 1.5+ cents per point (I’m being conservative here), the annual fee is still justifiable, in my opinion.

CSP-Airfare

I guess that makes the breakeven point between the two cards ~$12,000 of airfare spend (since you’d earn 24,000 Ultimate Rewards points vs. 36,000 Membership Rewards points, and I value those 12,000 points at $180+).

Switching to another American Express Card instead?

While the Chase Sapphire Preferred® Card is the best non-American Express replacement, in my opinion, what’s the best “generic” American Express replacement?

I’d say probably the The Amex EveryDay® Credit Card and Amex EveryDay® Preferred Credit Card from American Express. Even though these cards don’t offer spending bonuses for airfare, they offer 20% and 50% more points when you complete a minimum number of transactions per billing period.

For example, with the latter you earn 1.5 Membership Rewards points per dollar spent when you make 30 transactions per billing period. So that’s a difference of 1.5 Membership Rewards points per dollar spent compared to the Premier Rewards Gold. The annual fee is also lower. So at a value of 1.5 cents per Membership Rewards point, you’d need to spend ~$5,000+ on airfare to break even.

Using airline specific cards

Obviously the most common cards to have airline category bonuses would be the airlines’ own co-branded credit cards. Even so, virtually none of them are more compelling than the Premier Rewards Gold, while few of them are more compelling than the Chase Sapphire Preferred.

One exception that immediately springs to mind is the Alaska Airlines Visa Signature Card, which offer three Alaska miles per dollar spent with a low annual fee. If your primary airline is Alaska, that’s a great option, as I do value Alaska miles at least as much as Membership Rewards points.

Alaska-Visa

Bottom line

The Premier Rewards Gold continues to be really compelling for airfare spend, assuming:

  • You spend a lot ($10,000++) on airfare per year
  • Most of your airfare purchases don’t incur foreign transaction fees
  • The airline you primarily fly doesn’t have a great co-branded credit card

Otherwise there’s something to be said for the convenience of just always using the Chase Sapphire Preferred® Card:

  • It doesn’t have foreign transaction fees, so you can use it for all airfare purchases
  • The double points don’t just apply for airfare purchased directly from an airline, but also to airfare purchased through an online travel agency

What do you think? Does the Premier Rewards Gold Card dropping the annual threshold bonus change the value proposition of using the card for airfare? Which card do you use for airfare spend?

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Comments

  1. It is almost trivial to call Amex and ask for them to waive the annual fee on PRG cards. I’ve done that a couple of times. They can also offer extra points instead of waived fee.

  2. You’re not going to include free trip cancellation/interruption insurance with Sapphire? That’s another factor for me to use the Sapphire over PRG.

  3. Called to cancel my card after getting my last 15,000 point bonus. I was offered 25,000 points to keep the card open for another year. I thought that was more than fair and I still use the card.

  4. Recently called AMEX to express displeasure with the removal of the 15,000 points after $30k spend and was given a 25k MR “retention award” with minimal hassle.

    Just had my annual fee hit and was trying to go decide if it was worth holding on to. The gentleman on the customer retention line initially told me that they were removing the feature as it was not widely used. I let him know that I certainly used it every year for the past three years I’ve had the card. He verified and offered me 25K for my troubles.

  5. I would add that to accumulate Delta Miles(as AMEX tranfsfer partner for a small tax/fee) the 2X feature at grocery store spend(with no annual cap unlike the two new AMEX Everyday cards) is a very nice feature for families that eat a lot…and mine does…
    I hate that AMEX took away the 15K bonus at $30M spend, but as others have mentioned AMEX was very quick to give me 15,000 points two months after my renewal.
    Yes, I will call again at renewal and express my displeasure at this. Hopefully a few more points will follow.

  6. I love it when they say they are taking away a feature because people don’t use it much. That is complete BS. Credit cards are full of features that sound good, but that people don’t use much and I’m sure AMEX wants and many of these features as possible. People don’t use their collision insurance, purchase protection, travel insurance and things like that much. When you don’t use it, it probably costs AMEX little to nothing. The 15,000 point bonus was something that people were using a lot and that is why it got axed!

  7. The travel insurance on Sapphire is far superior. Ben – what is your experience here? You must have had lots of travel plans go pairshaped, did amex come through or let you down?

  8. I still use this card extensively, and plus I let my family purchase their airline tickets with it as well. So it’s still a solid card ( paired up with the Amex Plat).

  9. Depending on where that spend is (on flights) matters….i.e. if you don’t have elite status and airlines change so you never are able to build elite status…

    A great benefit, for me, of using my AA card to fly AA (or UA on UA) is Group 1 boarding. I haven’t flown in a while so my status lapsed. while everyone may not have an airline specific card, it’s better than having to wait for a (forced) checked bag at your destination. Depending on airport, you could be waiting 20+ mins for your bag to come on the carousel.

    To me, that’s worth any potential difference in points accrued.

  10. I’m planning on transferring all of my MR out and put spend on other cards because of the removal of the 15k MR bonus.

    Maybe. Or I may switch to biz RG card to get open savings, 3x for airfare and the same access to Amex offers (which can pay for the annual fee over a year)

  11. What has your experience been with AmEx sending directed invites with sign up bonus (Delta Platinum 50k miles and 15k MQMs after $1k spend), issuing card and on multiple occasions saying the sign up bonus will be applied after 3 billing cycles. After 3 months I find out they will not honor the sign up bonus because I had the same card in 2008 (I have no recollection of this, but possible). Interestingly they did honor a 10k MQM bonus at $25k spend, because this is “imbedded”. Customer service are rigid in their decision and I have escalated as far as I can or they will allow (I altered travel plans through end of year and now will be short for Diamond, unless I purchase the MQMs – so not an insignificant out of pocket etc). I gave AmEx every opportunity to inform me if I was ineligible and although they claim they state such in their Terms and Conditions, they are clearly smart enough to figure this out ahead of sending any invite (I have much to say on this). Thoughts?

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