Are The Amex Platinum Card Changes A Bigger Deal Than I Thought?

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Earlier I posted about the changes coming to both the The Platinum Card® from American Express and The Business Platinum® Card from American Express OPEN.

American Express officially confirmed the following new features as of tomorrow, October 6, 2016:

  • The Personal Platinum Card will earn 5x points on airfare purchased directly with airlines
  • The Business Platinum Card will offer 1.5x Membership Rewards points on purchases of at least $5,000
  • The Business Platinum Card will offer 35% points back when using Membership Rewards Pay with Points to book a flight with your selected airline, or when booking a flight in first or business class on any airline

At the moment I have the Amex Personal Platinum Card and not the Amex Business Platinum Card. When I first saw the announcement of these changes, I was excited about earning 5x points on airfare. But the more I think about it, the more I see the real value here being with getting 35% of your points back when you use Membership Rewards points for a Pay with Points flight booking on your selected airline.

Redeeming Amex points for two cents each

Through Pay with Points, Amex points can usually be redeemed for one cent towards the cost of a ticket. Take the below flight between New York and Los Angeles, which costs $287, or otherwise 28,620 Membership Rewards points.

amex-travel

Assuming you have the business version of the card and the airline you’re booking matches your annual airline selection, you’d be getting back 10,017 points, meaning you’d be redeeming 18,603 points for a $287 ticket, getting you a value of 1.54 cents per point.

That’s a pretty good redemption value of Membership Rewards points, but falls under my valuation of Membership Rewards points for partner airline points transfers.

Do keep in mind that there are some pros and cons to booking through the Amex Travel portal. One of the bad things is that this benefit only applies to one airline per year for economy travel. However, one of the good things is that this benefit can also be used for first & business class, which is huge (many other portals don’t let you book premium cabins), and you can even use it for first & business class airlines other than the airline you select annually.

What this means for other Amex cards

If you have multiple linked cards earning Membership Rewards points, this means you can get 1.54 cents per point out of all your Membership Rewards points towards a travel purchase.

Let’s keep in mind that with the Amex EveryDay® Preferred Credit Card you earn a 50% points bonus when you make at least 30 transactions per billing cycle. When you factor in that 50% bonus, as well as being able to get a return of two cents per point, you’re looking at earning:

  • 4.5x points on U.S. supermarkets, up to $6,000 per year (9% return towards travel)
  • 3x points at U.S. gas stations (6% return towards travel)
  • 1.5x points on everyday purchases (3% return towards travel)

On the most basic level, you’re looking at getting a return of 3% on your everyday spend, assuming you value the credit towards airfare purchase at face value.

Another rewarding Amex card is the Premier Rewards Gold Card from American Express, which offers:

  • 3x points at on airfare purchased directly with airlines (6% return towards travel)
  • 2x points at U.S. gas stations, U.S. supermarkets, and U.S. restaurants (4% return towards travel)

The point is, that’s some pretty compelling return on everyday spend.

Which is better — Amex Personal Or Business Platinum?

This presents an interesting situation for me. I think having the American Express Platinum Card (either business or personal) is worthwhile for the perks. I certainly get my money’s worth.

At the moment I have the personal card, and I have hundreds of thousands of Amex points. On one hand I’m excited at the prospect of earning 5x points on airfare purchases.

On the other hand, all my points could potentially be worth two cents each towards the cost of paid tickets, which also has the potential to be huge.

Doing the math here at the margins can be difficult, since the value of the points currency is contingent upon which card(s) you have. Let’s assume:

So suddenly you’re earning a return of 7.7% on your airfare spend on the personal card, which compares favorably to the return of ~5.1% on the Citi Prestige or Chase Sapphire Reserve (I’m valuing those points at ~1.7 cents each, as I did Amex points before this change was announced). So with a marginal return of ~4.9%, you need to spend ~$5,100 per year on airfare to breakeven on the fee of the card (assuming you’re valuing the $200 airline credit close to face value, which makes the card’s “out of pocket” $350).

For the business card your out of pocket is also ~$250 by my mental accounting ($450 annual fee, minus the $200 airline credit). By my valuation having this card is marginally increasing the value of my points by 0.3 cents each. If you’re someone who ordinarily earns more than ~83,000 Amex points per year, you’ll come out ahead by having this card.

Again, my math here is highly subjective, so please replace the above “numbers” with your own valuations. Others won’t value Membership Rewards points at ~1.7 cents each without this 35% off opportunity. Others won’t value the $200 airline credit at face value. Others will be highly restricted by only being able to book one airline in economy with this benefit.

In theory I should have also included a discount for the airfare you’re booking with points, because you’re forgoing points when you book through the Amex Travel portal using your points.

But I think the above analysis is complicated enough, so I wanted to keep it as simple as possible, relatively speaking. 😉

Bottom line

On one hand I was hoping Amex would truly revamp the Platinum Card and change up several aspects of the card. We didn’t quite get that, though it’s also possible that these are just some intermediate changes.

At the same time, I’m now in a position where I don’t know whether to keep the personal or the business card, or possibly even both, as there could be merit to it. I earn more than ~83,000 Amex Membership Rewards points per year, and I’d also spend more than ~$5,100 per year on airfare.

So using my valuation of Membership Rewards points, does that mean I should have both the personal and business cards?

I didn’t think this would be so interesting, but once I started crunching the numbers I was pleasantly surprised…


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Comments

  1. Most of us are using MR partners, which we value at over 2 CPP anyway. Using EDP was a lucrative strategy before, and this change doesn’t make MR more valuable to anyone who knows how to leverage MR partners.

    A waste of MR to book airfare at 2 cents when there are so many intl premium redemptions.

  2. Thanks, interesting analysis. For a large tax bill coming up, at a cost of 1.87%, would you use an SPG Amex (1x but effectively 1.25x for miles transfer), Amex Biz Platinum for 1.5x, or Chase Freedom Unlimited for 1.5x?

  3. I was sittin at home sippin some forties
    when I heard about new amex categories
    just used the platinum card to pay for the benz
    might use it now for my everyday spend
    haters ask why you need all them points for?
    coz I like free flights on Singapore
    and if you like the way I bust my rhyme
    you heard it here first at onemileatatime

  4. @ John — Nope, the personal gets you 5x points on airfare, while the business gets you 50% back when you pay with miles.

  5. @ VirtuosoEric — Probably the Amex Biz Plat Card. That’s a return of ~3%, while I don’t value the returns on the SPG Amex or Freedom Unlimited quite that high.

  6. You got me so fired up for 2 seconds with the “PRG earns 3x points at US grocery stores.” What have I been doing?! But then, jk. I believe you meant directly with airlines

  7. Lucky, how exactly is a 2 CPP redemption an “incredible value” for MR points? Most everyone redeems MR points for way more on partner airlines.

  8. @ Tim — What do you value Membership Rewards points at, out of curiosity? I think it’s important to make a distinction between the cash value of an aspirational redemption, and what you’d actually be willing to pay for it. In other words, if I redeem 100,000 points for a $10,000 ticket, I don’t view it as getting 10 cents per mile of value, since I’d never be willing to pay that much for a ticket.

  9. I personally love the 50% rebate as I would say that you get back more than 2CPP redemption if you factor in the redeemable and elite qualifying miles that you would get for the flight you book. Besides this is just another option. When you have to take a certain flight on exact dates without flexibility it can sometimes be a nuisance trying to book award tickets. This is just another decent option.

  10. Does the 30%, and as of tomorrow 50%, rebate on MR points used for airfare via Amex travel apply to *all* MR accounts I have access to if I have the Business Platinum?

    I’m an authorized user on my wife’s Amex Everyday Preferred, and we use those cards for the, well, everyday spend. When I log into Amex travel through my Amex login, it first asks me to pick the MR account. If I pick my wife’s, and then use MR points to redeem for airfare, would I still get the rebate?

    I don’t really want to buy a plane ticket just to test it out…..

  11. How about this?

    Year 1 — open personal AMEX plat; pay $450 annual fee; get $200 airline fee twice; net cost $50; accumulate lots of points at 5x for airfare

    Year 2 – close personal AMEX plat; open business AMEX plat pay $450 annual fee; get $200 airline fee twice; net cost $50; spend lots of points at 2% for airfare purchases

    Do gift card or mileage purchases with any airlines count for the 5x points earning? If so, this plan could really be sweet.

  12. @Gene – That’s exactly what I was thinking too. You are also getting 5X for various merchant e-Gift Card purchases via Mileage Plus X app if Amex continues to code these purchases as United Airlines

  13. If you are telling me that I can use my MR to get $0.02/point value on any J/F airfare using pay by points I would take that all day every day over continuing to play the game of trying to find availability through the airline that might return something more like $0.025/point. I typically spend $11,000-$12,000 on my own airfare, more for family. If I can get 5x points for those purchases and then exchange them at $0.02/point that’s a great deal.

    By the way, why do so many people think Chase transfer partners are so great and Amex transfer partners are so bad – honest question, not trolling. I look at Amex and I see 17 airline transfer partners and I look at Chase and there 7, 4 of them are the same with both programs.

  14. Lucky, I’m planning on purchasing Alaska Air tickets for two family members. I could either buy them gift certificates (Alaska is my selected Amex airline, btw), and let them buy the tickets, or just buy them the tickets myself. If I use my personal Amex Platinum, could I get 5x either way? Any other thoughts? Thanks.

  15. Except for the fact that on American, and maybe all airlines, these will earn crummy EQDs most likely since that’s what goes on with Citi TYPS.

  16. All those smaller AMEX cards have very low limits on bonus categories, and relatively high fees (95+) that erode most of the value. Their cards wouldn’t be so pointless to have if not for the pesky annual fees on pretty much any one of them that’s of any value.

  17. @Another Steve — most airlines AMEX transfers to don’t have any valuable mileage redemption opportunities and/or pass along steep fuel surcharges on award tickets. If you study this long enough and try to eventually do premium cabin redemptions you’ll see.

  18. amex needs to forgo its silly $200 airline incidental credit and step up with a straightforward $300 travel credit like chase offers on CRS.
    too many hoops to jump with amex plat and that’s why i hadn’t been biting despite inundation of plat apply/upgrade offers.

  19. I have the Delta Amex Reserve card and just received the maximum 30k delta miles for annual card spend of $60k, and I have a personal AMEX Platinum card. I am about to buy Delta business/first JFK-FRA, and I care most about Delta flying credits (miles, points, etc). Which of the two cards should I use?
    Alex

  20. Oh, S*%t! The 5 points is not on the biz card. That is of real value to me but he benefit on the biz card is just Galling. I cancelled the Plat personal card a few months ago. I’ve been receiving offer of 50k to upgrade the gold card. If they will honor that I will do and cancel the biz card. Need to work out if there are any meaningful benefits I’d be giving up on the biz card that are not available with the personal.

  21. You don’t need $10k+ first class tickets to get 2¢pm, simple Y transcons can be over $500. At the 25k saver award level I can transfer to Aeroplan and fly UA all day with no close-in booking fee. Or better yet, transfer to KrisFlyer and fly upfront for 40k.

  22. @lucky All fair points. I suppose I’m an “Aspirationalist” at heart, so while I would never pay $5-10k for an airline ticket, extracting one from an airline for 100k MR (however challenging thes days) makes me feel like I’ve “won”.

  23. Two thoughts. I think the “selected airline” is an important limitation and one to keep in mind just a bit more. With loyalty programs eroding, I do much more comparison shopping now on airlines and I think getting the 50 percent back only on the airline you get to pick once a year is significant.

    The second point is the business platinum could be a very nice option for people who pay at least $5,000 per quarter in estimated taxes. The 1.5x earning for $5,000 charges plus the 50 percent rebate makes paying your taxes profitable. For example if you pay $30,000 a year in estimated taxes, that’s 4 charges of $7500. You earn 45,000 MR points, which can be used for $900 in travel with the 50 percent rebate. Fees are about $600 on the tax payments.

  24. Is it confirmed that the 5x isn’t on the Business? Previously, all Plat benefits have applied to the Business, plus the additional ones (10 Gogo passes, 30% rebate, etc).

    Btw, the rebate deal on the PWP purchases applies no matter which card you earned the points on, so long as you have a Business Plat tied to your account.

    Can someone look into whether the Business Plat will allow 5x also?

  25. One of the bad things is that this benefit only applies to one airline per year for economy travel. However, one of the good things is that this benefit can also be used for first & business class, which is huge

    Are these contradicting statements?

  26. Today is 10/6 and I don’t see any announcement from AMEX about the new 5x MR points on airline purchase with personal platinum card. Is this indeed in effect?

  27. The main difference is that I believe the reward booking at this higher rate (receiving 2 cents per point instead of one) will treat the ticket as a reward booking rather than a revenue booking, and it is limited to specific airlines (for example, you may book a flight with this discount via AA or even an AA codeshare on BA, but not with BA).

    So the disadvantage is that you won’t earn additional miles or flight credit for tickets booked this way, from what I can tell, whereas using 1 point per cent, while not the best deal, is treated as a revenue ticket by the airline.

  28. Actually, I’m not 100% certain if my last message is correct or not, but that’s my guess given that you must only use points to book the fare (cannot use part cash part points). I don’t have time to call them to verify, but it would be good to know for certain before booking one of these.

  29. Incidentally, this doesn’t seem to be completely seamless. I booked a Mint ticket on B6, despite UA being my chosen carrier on the Business Plat, and no indication of 50%. I called in tonight and the person at AMEX Travel said the reason was that it wasn’t my chosen carrier. I pointed out that it is a business ticket. Now have to call back tomorrow. A little frustrating.

  30. So I’ve got the biz plat and a regular old green card hooked to my MR. If I were to book and pay w points:
    1. Would anything show on my credit card statement?
    2. If so which one?
    3. If so what would appear?

  31. Lucky, I have an opportunity to use my AMEX Bus. Plat. for monthly payroll…approx. $70k/month at a 2.5% fee. Do you think it’s worth it given the 1.5x points I’ll receive and the new redemption rules?? With some base calculations in my head, I’m thinking this might be worth it as I’ll make all my airfare bookings with AMEX Travel now by using points (which still counts towards airline status) and the points never expire so I don’t have to justify paying the 2.5% fee every month by spending that same amount on travel.

    What do you think??

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