Amex CEO: More Card ‘Refreshes’ (& Fee Hikes) Are Coming Soon

[Vash1]

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@longtimelurker wrote:

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@Kforce wrote:

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@notmyrealname23 wrote:

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If I pay a $695 annual fee but I get $800 in value out of paying the annual fee, why would I avoid this?

That's +$105 in value I didn't have before the annual fee was paid.

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Math from your example:

Spend of 8,889 with 3x points/miles per dollar = 26,667
3x rewards for flight/hotel etc, because of the AF card value

thru portal/etc = 80,000 =  ~$800
Net = 800-695 = $105

Same spend 8,889 on a NAF 3% or 3x = $267

You lost ~$100 over a NAF card.

Goal is to make more than a NAF or lesser fee card,
not make more than the fee.

Minimum spend to pay for an AF card is
(AF/gain) of the AF card.
Lets say getting 9% rewards vs 3% (6% gain)

$695/0.06 = $11,583
Spend on AF card required to equal the NAF.
Larger spend AF card wins, lesser the NAF wins

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And then, to be complete, is there a different AF card (which you can reasonably expect to get) that would do even better on average on your transactions.  But @Kforce basic point is absolutely correct (and seems to be missed sometimes here): rewards etc covering the annual fee is certainly a requirement for considering an AF card, but you need to do the analysis compared to other cards (both AF and no AF) to see if it is truly worth it.

That said, in reality it can be hard.   Card A offers me lounge access, free card B doesn't.  How much do I value that?   Well, I could buy a daily pass for $X and I go 5 times a year so should I count that as $5X for card A?  Or I could buy a membership and go more, so maybe count that membership fee for card A?   But I don't use a lounge now, and certainly don't pay for them, so really how much is that worth..... etc

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More than the reward rate value but also how the card benefits will fit into your organic spend.

I have both the platinum and gold. That's $945 AF combined for both. But the coupons fit my organic spend. While some don't think much of the Walmart Plus membership, for me I've for years exclusively gotten gas from Walmart. So with the $.10 I save per gallon with how far I drive equates to $115 savings per year conservative calculation. 

I've had Hulu for years and will continue to do so. That's $240 savings. I eat out at least one meal per day, and rather ordering through an app or going to the restaurant makes me know difference. So from the Uber cash that's an easy to use $320 a year from the gold and platinum.

Also another $120 a year saved using Grubhub which I just redeemed this months credit easily.

As I have to spend about $200 a year for clothes getting $100 in savings ordering from Saks Fifth is easy.

So all told from the $945 AF I get $895 in coupon spend alone making the AF a net $50 a year. That's before the $1400 minimum a year in rewards travel redemption. 

So if they raised the fees sure it would suck, but again if the value is there to fit organic spend it doesn't matter as some others have said. 

[notmyrealname23]

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@Kforce wrote:

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@notmyrealname23 wrote:

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If I pay a $695 annual fee but I get $800 in value out of paying the annual fee, why would I avoid this?

That's +$105 in value I didn't have before the annual fee was paid.

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Math from your example:

Spend of 8,889 with 3x points/miles per dollar = 26,667
3x rewards for flight/hotel etc, because of the AF card value

thru portal/etc = 80,000 =  ~$800
Net = 800-695 = $105

Same spend 8,889 on a NAF 3% or 3x = $267

You lost ~$100 over a NAF card.

Goal is to make more than a NAF or lesser fee card,
not make more than the fee.

Minimum spend to pay for an AF card is
(AF/gain) of the AF card.
Lets say getting 9% rewards vs 3% (6% gain)

$695/0.06 = $11,583
Spend on AF card required to equal the NAF.
Larger spend AF card wins, lesser the NAF wins

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You are assuming the only way to obtain value is spend on a card. This is most assuredly not the case. If I get discounts and outright "free" costs on things I was already going to buy already from the "coupon book", am I not allowed to consider those as value?

I don't typical do the "a $10 monthly credit/$200 semi annual credit is worth $10/$200" game, but neither do I say it's worth $0. Once I apply discounted value to things like that (as well as whether or not that BigBank ShinyPreciousMetal card multiplier and transfer partners are worth it, etc) I get my answer.

I do know about 2% no annual fee cards, thanks (I carry them). I know about 5% no annual fee rotators (I also carry them). But i am quite aware of how much travel I get to do that wouldn't happen if I traded in cards for no annual fee cashback, I do the books and make some alternate assumptions...

[UncleB]

I have to say, I'm glad I'm down to (only) two no-AF Amex cards these days (BCE and ED).

For a while I kept up with the coupons for the CS Platinum and Gold, but last year I moved to a more rural area and it's no longer possible for me to use all the coupons and perks so late last summer they both got cut loose.  It was strange... each month I had conditioned myself to do certain activities just to earn the credits so I could break even on the AF - and I did - but I never really considered the "work" I was doing just to make the cards make sense for me.  In other words, they didn't make sense for me even before I moved, and certainly not afterwards.

I actually like American Express (their customer service is top-notch), but in addition to the 'coupon book' issue their MR program just isn't a fit for people who seldom travel and don't aspire to - like me.  Citi, Chase, and even Wells Fargo let you cash out their points for 1¢ each, but again Amex makes it hard unless you add yet another card product (CS Platinum - been there, done that).  All these issues combined mean I'm not likely to use an Amex product for a significant part of my monthly spend since I can get better value (i.e. rewards) from no-AF cards offered by other banks.

Hopefully this will eventually change, but I don't see it happening.  If anything, I see them doubling-down on the path they're on, which may work just fine for them.  If that continues to be their business model going forward I have no hard feelings, we're just not a match. ¯\_(ツ)_/¯

[longtimelurker]

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@UncleB wrote:

For a while I kept up with the coupons for the CS Platinum and Gold, but last year I moved to a more rural area and it's no longer possible for me to use all the coupons and perks so late last summer they both got cut loose.  It was strange... each month I had conditioned myself to do certain activities just to earn the credits so I could break even on the AF - and I did - but I never really considered the "work" I was doing just to make the cards make sense for me.  In other words, they didn't make sense for me even before I moved, and certainly not afterwards.

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I suspect that for many, even those claiming "it's all organic". there is a little bit of this.   So whiile I might want to eat at home, or go to that restaurant X, I can convince myself to go to partner restaurant Y because I get $10 credit, and then count that as "I'm just doing what I normally do"

[NoHardLimits]

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@longtimelurker wrote:

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@UncleB wrote:

For a while I kept up with the coupons for the CS Platinum and Gold, but last year I moved to a more rural area and it's no longer possible for me to use all the coupons and perks so late last summer they both got cut loose.  It was strange... each month I had conditioned myself to do certain activities just to earn the credits so I could break even on the AF - and I did - but I never really considered the "work" I was doing just to make the cards make sense for me.  In other words, they didn't make sense for me even before I moved, and certainly not afterwards.

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I suspect that for many, even those claiming "it's all organic". there is a little bit of this.   So whiile I might want to eat at home, or go to that restaurant X, I can convince myself to go to partner restaurant Y because I get $10 credit, and then count that as "I'm just doing what I normally do"

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I only made one purchase last year on my personal Platinum that wasn't truly organic spend.  I used the $50 Saks credit to buy some socks.  I didn't really need more socks at the time, and my dresser drawer became overly crowded with the new additions.  I'll probably let that credit go unused this time around.

[Aim_High]

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@UncleB wrote:

I have to say, I'm glad I'm down to (only) two no-AF Amex cards these days (BCE and ED).

For a while I kept up with the coupons for the CS Platinum and Gold, but last year I moved to a more rural area and it's no longer possible for me to use all the coupons and perks so late last summer they both got cut loose.  It was strange... each month I had conditioned myself to do certain activities just to earn the credits so I could break even on the AF - and I did - but I never really considered the "work" I was doing just to make the cards make sense for me.  In other words, they didn't make sense for me even before I moved, and certainly not afterwards.

I actually like American Express (their customer service is top-notch), but in addition to the 'coupon book' issue their MR program just isn't a fit for people who seldom travel and don't aspire to - like me.  Citi, Chase, and even Wells Fargo let you cash out their points for 1¢ each, but again Amex makes it hard unless you add yet another card product (CS Platinum - been there, done that).  All these issues combined mean I'm not likely to use an Amex product for a significant part of my monthly spend since I can get better value (i.e. rewards) from no-AF cards offered by other banks.

Hopefully this will eventually change, but I don't see it happening.  If anything, I see them doubling-down on the path they're on, which may work just fine for them.  If that continues to be their business model going forward I have no hard feelings, we're just not a match. ¯\_(ツ)_/¯

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Very well said, @UncleB.  I can really identify with a lot of what you described.   After trying out AMEX Gold and MRs for a couple of years, it's why I decided Chase and URs was better.  For one the value is consistent, no less than 1 cpp but I can still get 1.5 to 2.0 cpp.  Less games.  AMEX's excessive coupon-book credits combined with some really great temporary offers (like spend or referral bonuses)  made for so many moving parts that it was difficult to really calculate the value of the card.  That made me uncomfortable and I felt that AMEX was purposefully trying to muddy the waters.  Those special offers were good, but they were temporary and threw a wrench into making an accurate long-term evaluation.   Coincidental?  I think not. 

Unfortunately, I traded my AMEX Gold monthly GrubHub coupon book for the same deal on my revamped CITI AAdvantage Executive card when they raised the AF.  >sigh<    That one was annoying on Gold, but I did get value back on it and I'm trying it out again to make it work on the Executive.  I prefer to order for pickup to avoid the delivery charges and tips, and I'm trying to add some other options for variety.  (On Gold, I just used it monthly at a favorite local pizza place.)

[OrangeRange]

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@Aim_High wrote:

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@UncleB wrote:

I have to say, I'm glad I'm down to (only) two no-AF Amex cards these days (BCE and ED).

For a while I kept up with the coupons for the CS Platinum and Gold, but last year I moved to a more rural area and it's no longer possible for me to use all the coupons and perks so late last summer they both got cut loose.  It was strange... each month I had conditioned myself to do certain activities just to earn the credits so I could break even on the AF - and I did - but I never really considered the "work" I was doing just to make the cards make sense for me.  In other words, they didn't make sense for me even before I moved, and certainly not afterwards.

I actually like American Express (their customer service is top-notch), but in addition to the 'coupon book' issue their MR program just isn't a fit for people who seldom travel and don't aspire to - like me.  Citi, Chase, and even Wells Fargo let you cash out their points for 1¢ each, but again Amex makes it hard unless you add yet another card product (CS Platinum - been there, done that).  All these issues combined mean I'm not likely to use an Amex product for a significant part of my monthly spend since I can get better value (i.e. rewards) from no-AF cards offered by other banks.

Hopefully this will eventually change, but I don't see it happening.  If anything, I see them doubling-down on the path they're on, which may work just fine for them.  If that continues to be their business model going forward I have no hard feelings, we're just not a match. ¯\_(ツ)_/¯

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Very well said, @UncleB.  I can really identify with a lot of what you described.   After trying out AMEX Gold and MRs for a couple of years, it's why I decided Chase and URs was better.  For one the value is consistent, no less than 1 cpp but I can still get 1.5 to 2.0 cpp.  Less games.  AMEX's excessive coupon-book credits combined with some really great temporary offers (like spend or referral bonuses)  made for so many moving parts that it was difficult to really calculate the value of the card.  That made me uncomfortable and I felt that AMEX was purposefully trying to muddy the waters.  Those special offers were good, but they were temporary and threw a wrench into making an accurate long-term evaluation.   Coincidental?  I think not. 

Unfortunately, I traded my AMEX Gold monthly GrubHub coupon book for the same deal on my revamped CITI AAdvantage Executive card when they raised the AF.  >sigh<    That one was annoying on Gold, but I did get value back on it and I'm trying it out again to make it work on the Executive.  I prefer to order for pickup to avoid the delivery charges and tips, and I'm trying to add some other options for variety.  (On Gold, I just used it monthly at a favorite local pizza place.)

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@Aim_High  , 

I feel as if the Green is the easiest annual fee core card to manage with them as it's pretty cut and dry: do you care about Clear and if not will you at least annually use the $100 loungebuddy credit?  They're both easy use and only require one annual charge. 

I do agree with you though that the way they advertise the Gold/Platinum with the high SUBs and annual credits definitely makes it seem like a valuable card to the average layperson. In reality, most people outside of dedicated travel rewards enthusiasts or heavy spending road warriors/business owners would probably be better off with ChaseUR/Citi TYP/cashback cards. I still have no issues with my Gold as I naturally eat out a lot (probably too  much) and use Grubhub, but I agree it can be a hassle to manage. 

[Aim_High]

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@OrangeRange wrote:

@Aim_High  , 

I feel as if the Green is the easiest annual fee core card to manage with them as it's pretty cut and dry: do you care about Clear and if not will you at least annually use the $100 loungebuddy credit?  They're both easy use and only require one annual charge. 

I do agree with you though that the way they advertise the Gold/Platinum with the high SUBs and annual credits definitely makes it seem like a valuable card to the average layperson. In reality, most people outside of dedicated travel rewards enthusiasts or heavy spending road warriors/business owners would probably be better off with ChaseUR/Citi TYP/cashback cards. I still have no issues with my Gold as I naturally eat out a lot (probably too  much) and use Grubhub, but I agree it can be a hassle to manage. 

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Thanks for that, @OrangeRange.  I also dine out a LOT too, which is one reason I thought I would try the Gold.  The monthly dining and UBER/EATS credits were just annoying, especially since I normally eat OUT and don't use food delivery services or ride share services.   I also realized that to get consistently high value from MRs, I would have to transfer to partners.  Chase/CSR/URs outshined AMEX in both cash redemption and in-portal redemption with consistently 1.0/1.5 cpp.     I did look at Green several times but CSR is just a better card for both dining and travel, IMO.  I had multiple other cards with either Admirals Club or Priority Pass lounge access already, and I don't regularly fly out of airports (or terminals) that have CLEAR. 

But yes, absolutely agree that Platinum/Gold/even Green are a good fit for some consumers but are probably carried by many who don't get the best use from what they offer. 

[ScenicRouteTo850]

I also have the old Blue from American Express, though I lost the card reader long ago. I thought about trying to PC it, but I like having a no-AF MR-earning account in case I ever have to close my Gold Card. My Blue is now my oldest account, dating back to 2007. Somehow, Amex looked the other way in 2010 when I filed BK7 and they let me keep the account open. It had a zero balance and I didn't burn them, but I still expected them to close it. I really got lucky there. Now I put a few automatic charges on it each month to keep it alive. Amex even granted a CLI on it recently. Yes, 1x MR is not great, but I think it is still an important part of my lineup. 

[cjesser15]

Maybe a little off topic, but I canceled my Gold in November 2022 and my Platinum well prior to that and I've continued getting my $10 per month Uber cash every month since.  So I guess I've gotten like $180 despite no longer holding the card.  So far I've just been keeping quiet about it and hoping nobody at Amex would notice.  I'm sure now that I said something it will dry up.