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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.
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:
- You have the Amex Personal Platinum Card to earn 5x points
- You have the Amex Business Platinum Card so that each point is worth 1.54 cents towards an airline purchase
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. 😉
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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