Can It Make Sense To Pay Two $450 Annual Fees?

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Reader @SmellTheTea asked the following question on Twitter:

It’s an interesting question, given that both cards have $450 annual fees. In general no one likes paying annual fees, and as consumers we rationally try to minimize them as much as possible.

But I’ll also gladly admit that I spend a couple of grand a year in credit card annual fees. That sounds horrible on the surface, though in practice I get more back in annual benefits than it costs me, from free hotel nights to lounge access to airline fee credits.

So the above reader is asking specifically about the The Platinum Card® from American Express and the Citi Prestige® Card. Can it make sense to have both of them? I’d say absolutely… under some circumstances.

Each has a $450 annual fee, so with that in mind let’s look at the recurring benefits you get for each card:

The Platinum Card® from American Express

Sign-up bonus aside, here are some of the recurring benefits you get each year for having the Amex Plat:

Citi Prestige® Card

Sign-up bonus aside, here are some of the recurring benefits you get each year for having the Citi Prestige® Card:

  • $250 annual airline credit, which can even be applied towards airfare ($500 the first year, since your annual fee is based on cardmember year, while your airline credit is based on calendar year)
  • Access to Admirals Clubs when flying American/US Airways
  • Priority Pass Select membership with complimentary guesting privileges

Admirals-Club-Honolulu-Airport-09
American Airlines Admirals Club Honolulu Airport

Crunching the numbers

Assuming you value the airline credits at face value, you’re making money on the cards the first year. But let’s look at the years beyond that.

Again, assuming you’re valuing the airline credits at face value, the annual fee of the American Express Platinum Card is essentially $250, while the annual fee on the Citi Prestige® Card is essentially $200.

As an American Executive Platinum member, the Citi Prestige® Card is worth it to me for the Admirals Club access alone, since there’s no other way I know of to get access so inexpensively. As an Executive Platinum I’d otherwise pay a minimum of $350 per year for lounge access.

Admirals-Club-Fees

The Citi Prestige® Card and American Express Platinum both comes with Priority Pass with guesting privileges.

With that in mind, how do I justify the $250 annual fee on the American Express Platinum Card? While some of the other benefits are useful, for me the access to American Express Centurion Lounges and access to American Express Fine Hotels & Resorts alone justifies the annual fee.

Two of the airports I transit most often are New York LaGuardia and Dallas, both of which have Centurion Lounges. Miami is getting one soon as well, which is another one of the airports I transit most frequently. Frankly I would pay $250 for access to Centurion Lounges alone, based on the frequency with which I transit through those airports.

Amex-Centurion
Spa at the Amex Centurion Lounge Dallas

While many American Express Fine Hotels & Resorts properties overlap with Virtuoso, some don’t. I make at least a couple of stays a year at properties participating in Fine Hotels & Resorts but not Virtuoso, so having access to the program adds a lot of value.

Bottom line

Having both the The Platinum Card® from American Express and the Citi Prestige® Card won’t make sense for everyone. That being said, despite some of the benefits overlapping, I think there are plenty of cases where it can make sense to have both cards.

As the airlines have sort of sided with their respective co-brand credit card issuers, there’s not a single credit card that gets you into most lounges anymore, which is why in some cases your best bet is to have multiple cards.

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Comments

  1. i called virtuoso awhile ago and they said they charge a fee to book hotels. do all of them do that?
    we are looking into australia and i saw where you can book a stop in tahiti and then onto aus. is that possible and which airline? we have delta and AA and amex rewards. thanks.

  2. No, it doesn’t make sense under any circumstance if these are the two cards you are paying the fee for, here’s why: you can get the Ameriprise Platinum Amex free for one year for up to four people. Think about it. You should NEVER pay an annual fee for an Amex Platinum unless you are getting a nice sign-up bonus (no longer relevant for me).

    As for the prestige, well, you can just use the Platinum to pay for Admiral’s Club access, so it’d only cost you $150.

  3. You forgot the Prestige 4th night free benefit. This has saved me well over the $450 cover price alone! Plus, you get to enjoy elite benefits at the stays. It’s the best of both worlds.

  4. Absence of sign-up bonus (75k or above), not worth it given the overlapping benefits between Prestige and AMEX. I got the 100k AMEX Plat. offer last year and got the Gold 75k offer in the mail just recently. Plan to cancel Platinum and switch to Gold and get the Prestige in-branch offer – $350 AF and 60k bonus.

  5. Lucky, what airline fees are you getting reimbursed for that are $500+ per year? It seems like you do not pay for baggage and club fees. Gift cards are a slippery slope and are not guaranteed to be reimbursed. Wifi can only add up to so much per year.

  6. @Andrew,
    What is so slippery about gift cards? You can read lots of reports on flyertalk about successes and failure. Then if you order say a $50 gift card and it doesn’t get credited, you are just stuck with a $50 gift card. No harm done and try it again with another airline.

  7. I have both cards and will likely keep both. If not for the airline credit I would probably cancel the Platinum and just go with Prestige (I have the $350 AF version), but $250 for FHR and occasional Centurion Club visits is worth it to me.

  8. How much would people pay to enter a US domestic lounge in the following scenarios:
    1. You show up to the airport 1 hour before your flight
    2. You have a 2 hour connection
    I’d put #1 at less than $10 and #2 at maybe $20. If you are an occasional traveler, it really doesn’t make sense to renew the card. If you are constant traveler like Lucky, the math is very different.

  9. Hi Lucky,

    Did you ever do a post on which card is better re: american express platinum or american express mercedes benz platinum? Or is there really no difference between the two? Trying to figure out which one to apply for. what do you suggest? Thanks!

  10. I’m canceling the Platinum and just applied for the Prestige. I don’t get anything refunded from the Plat, since all of my flying is on miles, and AMEX doesn’t refund fuel surcharges and award ticket taxes. But Prestige does, and by applying now, I have a first year fee of $450, and 2 statement credits of $250, so I’m coming out $50 ahead in addition to the sign up bonus.

  11. I just got the prestige card today but I’m not sure how I could get the $500 airline benefit the first year. Do it now and in January?

  12. @Robert Hanson – noooooooo!

    Even though all your flying is on miles, you have the opportunity to purchase non-expiring gift cards (AA).

    Yikes!

    At least get $200 in GCs before you cancel your amex plat. Please?

  13. We have two Prestige and two Ritz Carlton and plan on keeping all four or at least three of these four. We might also get 1 United Club and 1 Delta Reserve as these cards pay for themselves with extra points and rewards.

  14. @ Andrew — With which card? With the Citi Prestige airfare is reimbursable. With the Amex Plat, I’ve never had an issue with buying American Airlines gift cards.

  15. @Coleen Those AA gift cards can be used to purchase airfare, which I don’t do. And for things I already get for free, such as baggage fees. But they can not be used to pay for the things I am charged for, such as fuel surcharges and taxes.

  16. I have an AmEx platinum card & a gold card. I only travel, domestically, a couple of times a year. Maybe every other year internationally. I do have the Prestige Card. I have heard that the Capitol One is less expensive & has better benefits. Most of the time I fly Delta. I always pay my total bill each month. I do use the lounges when I fly. Which card would be better to have? You had mentioned that you should never pay the $450 annual membership fee. How do I get out of that?

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