What was American Express Thinking with the Platinum Card Changes?

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By now, I’m sure you have heard about the news about the American Express Platinum card. American Express has announced new benefits coming to the Platinum card, which will go in effect on March 30, 2017.

New Benefits for American Express Platinum Cardmembers

Let’s just get this out of the way: the new benefits will come at a cost. The annual fee for the Platinum card will increase to $550, from the current $450. You can continue to add up to 3 additional Platinum cardmembers for $175 a year, and can add Gold cardmembers for free. Gold members will not receive benefits like lounge access, but their spending will earn bonus points just like the primary cardholder.

Here are the new benefits:

  • Uber Rides with Platinum: A monthly $15 Uber credit ($35 in December) that must be used within that month. Only available to the primary cardholder, but can be added to any Uber account (that you add your primary card to). You will also be an UberVIP, which is a program that pairs you with better cars and better drivers, but may mean a longer wait in smaller cities.
  • 5x on Selected Hotel Bookings: Earn 5x points on selected prepaid hotel bookings made through AmexTravel.com, including The Hotel Collection bookings. Fine Hotel & Resorts bookings are post-paid and are excluded.
  • Free Additional Gold Cards
  • New card design (metal)
  • Guesting Privileges with Priority Pass: 2 guests allowed with Priority Pass

These perks will join the existing list of benefits:

  • $200 annual airline fee credit (per calendar year)
  • $85 or $100 TSA PreCheck/Global Entry fee credit
  • Hilton HHonors Gold status
  • Starwood Preferred Guest (SPG)/Marriott Gold status
  • Access to Delta SkyClubs when flying Delta
  • Access to American Express Centurion Lounges (LAS, DFW, MIA, SFO, SEA, LGA, etc.)
  • PriorityPass for access to 900 airport lounges
  • Access to Fine Hotel & Resorts and The Hotel Collection
  • Access to Boingo Hotspots

Pain Points of the Hodgepodge of Benefits

Even before this announcement, benefits that come with the American Express Platinum card are not the easiest to use. It’s clear why American Express is doing that—for breakage, to bank on people who won’t take full advantage of it. But for the people who do take advantage of it, using the benefits sometimes triggers an internal “ugh” for me.

The $200 annual fee credit is nice, but you have designate a specific airline. As I’ve explained before, if you are flying that airline so frequently, chances are you don’t incur a lot of incidentals to begin with. Perhaps you have status that will get you onboard perks, or you may have a co-branded credit card that already provides fee waivers. So for some folks, you are left with $200 from which that you basically have to do some awkward dances to extract value. Not that it’s not worth it—but it’s annoying.

The new Uber credit follows the same scheme, and unlike the airline fee credit which can be a once-a-year ordeal, you have to use up your $15 every month. That’s not hard, if you ride $15 worth of Uber every month. But note that the credits may apply after any Uber-branded credits (like refer-a-friend credits) you already have, so you will have to watch carefully to make sure you have actually used the Platinum Card Uber credit every month. Again, just annoying.

5x points on airfare is wonderful, and I’ve taken advantage of it a number of times. However, the Platinum card is the only major premium travel card that doesn’t come standard with trip delay insurance, so I mostly use the card to pay for domestic travel. In the contrary, if you pay for your air ticket with the Citi Prestige, you will be reimbursed up to $500 for meals and essential items just after a 3-hour flight delay.

The 5x points on hotels is yet another example of hoop-jumping nonsense. Why advertise statuses to Hilton and SPG/Marriott, when booking through amextravel.com essentially make those statuses irrelevant? I’d gladly take a 3x points multiplier for all hotel bookings over a 5x multiplier on the kind of hotel bookings that I maybe make only once or twice a year.

Just Who is the Platinum Card Really For?

Chase Sapphire Reserve got a lot of buzz even before it was available, and continues to be a top-of-wallet card for many people. And I think their success is largely based upon a simplistic benefits and earning structure. With a $300 travel credit, you are basically looking at Priority Pass Lounge accesses and earning 3x points on travel and dining for $150. That’s easy to explain, easy to understand, easy to use.

Chase casts a wide net with the Sapphire Reserve. Whether you are an urban dweller who eats out all the time, a business traveler who frequents airports and hotels, or a suburban head of household who might buy airplane tickets a few times a year, you can derive value from the card.

Meanwhile, American Express seems to be going an entirely different direction. Instead of aiming for mass appeal, they are seemingly targeting a very specific market. That market, in my mind, is urban dwellers who frequent airports with Delta or Centurion Lounge. They are the folks who can extract the most value out of this card, and should definitely considering it.

Of course, this doesn’t mean everyone else won’t be able to derive value from the card. I live in a city without a Centurion Lounge, and primarily fly American. But I travel enough times a year that I will gladly pay the new effective annual fee of $150 for Delta SkyClub and Centurion lounge access. I don’t regularly use Uber anymore, but definitely spend more than $15 on it each month. Additionally, for just $175 a year, I get three additional Platinum cards so my family members can also get lounge access, and I consider that a good deal. You may very well find yourself in the same situation.

I don’t mean to paint an overly bleak picture; the reality is I’m just lamenting the fact that American Express doesn’t seem to get it with the kinds of confusing benefits that often require jumping through a lot of hoops. The Uber credit seems to be an attempt to come up with something unique, but the execution and the rationing of the credit fell short.

I can’t speak for all millennials, but I think it’s fair to say that it’s a generation that values flexibility tremendously. Maybe their spending isn’t quite up to par with the GenX folks now, but if Chase can manage to position itself as the leader in credit card rewards and travel benefits, as millennials reach the peak of their careers, I think they are likely to look at Chase in similar ways older folks see American Express.

If American Express is hoping to compete for the same crowd that got excited over Chase Sapphire Reserve or even the Citi Prestige, they’re not quite there in my opinion. Of course, I’m not their accountants, and I’m sure they have done their market research, and maybe they think this is the best decision for them.

Should You Apply For or Keep the Platinum Card?

If the Platinum card is your only premium travel card, you’ll be happy about the new guesting privileges with Priority Pass. If you spend at least $100 on Uber once a year, and value Uber credits at face value, you will at least come out even compared to the old Platinum Card. If the Platinum card is your only premium travel card, you’ll be happy about the new guesting privileges with Priority Pass. If you ride Uber more than that, well, it’s a net positive. I have previously written about why I keep all three premium travel, flexible currency cards around, and you can read about it here.

So if you already have the platinum card, I really don’t see a reason why you should consider cancelling the card, unless you are opposed to paying $550 in annual fee upfront, or that you don’t ride Uber at all. Keep in mind that existing cardmembers won’t see an increase in annual fee until September 1st, 2017. 

If you don’t currently have a Platinum card, and realize you can derive value from the card, I’d recommend applying for it before March 30, when the annual fee goes up by $100.

Final Thoughts

There are now three premium credit cards commanding $450 – $550 a year, in exchange of a number of benefits and the ability to earn flexible “points” currencies.

With the Chase Sapphire Reserve and Citi Prestige, I’m keeping the card happily, and use them regularly. I am proud to be a cardholder, and I tell people about them all the time. With the Platinum card, I am only begrudgingly keeping it, but maybe that’s enough for American Express.

Comments

  1. Chipping away, or shaping their ideal consumer, might we say? The only way I see this card not having massive attrition is if there are big/bold lounge announcements in Chicago/Denver. The “lounge factor” is missed by so many who have different travel routing/patterns. I think consumers are going to stick with CSP/Citi Prestige. On the other hands, Amex might have just found a solution to their lounge crowding problem……..

  2. I’m considering cancelling this card. It’s a shame, but it’s getting ridiculously expensive and for what?

    I hardly fly Delta; get in a Centurion lounge only a couple times a year, and the main deal for me is the upgraded SPG and Hilton to gold account. And I can get the gold Hilton from another credit card I have. Plus the Chase Sapphire Reserve card has most of that and less restrictions.

    They didn’t even make the $200 airline credit easier to use. They could have made it $250.

    Just what are they thinking? It’s not very attractive anymore, unless you live near a Centurion lounge airport and can use those all the time (I do like them, but I rarely go to Dallas or the other places. Amex needs to add more of those in other cities).

    Right now we have 3 plat cards (2 different Business Platinum cards, and 1 Mercedes Benz one), but now I think we’ll drop two of them.

  3. Patiently waiting for the Ameriprise Plat to come back out with a bonus. All those bennies, plus a few MR with no 1st year AF…yes please!

  4. Amex doesn’t get it. Always playing catch up with a little bit less. Will still keep it, but asking why? The other premium cards create more value.

  5. I will only keep the card because it will cost me “only” $55 more to have access to Delta lounges by having the Amex Platinum than buying it from Delta at $495. However, Amex will lose several customers since their benefits are very difficult to use and I have things more important to do with my time than waisting it with Amex.

  6. I don’t understand all of the whining and crying. If the card is not for you, cancel it!

    AMEX is clearly going to great lengths to make this card attractive to a select audience. The way I see it, they are targeting high-income, younger (millennial?) urban dwellers who travel frequently and value “experiences.” Most importantly, they aren’t catering to price-sensitive customers, and good for them. The net “cost” of CSR and AX PLT is the same, $150…but only if you value the benefits. If you are a “price” shopper ($450 vs. $550), then this isn’t for you. Remember that the original AMEX had an annual fee that was $1 higher than Diners’ Club. AMEX has never been your card issuer if you were looking for a deal, and they’re okay with that!

    I bet this is part of a larger movement to make this a “lifestyle” card. For too long customers have arbitraged the benefits of AX PLT and left the card at home. By adding more “travel-adjacent” benefits, AMEX will get the card back in peoples’ wallets and drive revenue from merchant fees. If that doesn’t work for you, I’m sure they’ll be happy to give you an AMEX Blue and send you on your way.

  7. I still don’t understand why even Amex Centurion doesn’t have Primary auto coverage. That being said I’m still keeping mine because it’s a discontinued version of the card with a lower annual fee ,but $175 per additional Platinum card (ouch!). But having the Hilton and SPG/Marriott Gold status is quite valuable to me and something that the Chase brands still don’t offer.

    • Amex offers a Primary auto coverage called Amex Assurance. It’s not free though, it costs $24 per rental period which is normally about 24 continuous days. I’d rather have the Chase equivalent (since Chase’s is free) but at least it’s available. Provided you have a Platinum or Gold card from Amex you can sign up and it will remain on all of your Amex cards regardless of if you later cancel said Platinum or Gold card.

    • This is right – there is a value to the traveler not locked into one hotel program, and these are programs with breakfast/lounge/upgrade benefits.

  8. Until this I was considering getting a personal PLT. I have a business PLT with an average monthly spend of 40K but go the Sapphire for personal travel with the lounge benefit ( I travel a great deal internationally with wife) so that was great. If it were not for the new increase fee to $550 I would have gotten a personal PLT but no way now.

    There appears to be a pattern arising with Hyatt doing what they did now AMEX.

  9. I’ve had a Platinum card since 2007, and have never been in a Centurion lounge. Domestically I pretty much fly Jetblue only. I live in a small city and would only use Uber when I travel, which is several times a year, not every month. I live alone, and travel alone, so extra lounge privileges for guests does not help me. IF the Uber credit was a lump sum, that would be helpful. The extra $100 may be the breaking point for me. None of the new benefits help me-those are all for big city people! I think they have misread a fair bit of their cardholders!

  10. Every year renewing the Amex Platinum becomes harder and harder to justify — with the benefits becoming ever more gimmicky and illusory. I should thank Amex for making the choice so much easier for me this year. Paying another hundred dollars for almost nothing of value to me, doesn’t give me much to think about.

    I should say that the only thing I might miss about Amex is the far superior customer service as compared to Chase. Chase really doesn’t have its act together in dealing with their customers. Their Philippine call centers are really awful, and it takes forever to get your call answered, often being switched between departments to find somebody to help you with your problem. Amex customer service is vastly superior.

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