This post looks at my latest credit card sign-up: the American Express Platinum Card, and why I think the insane $699 annual fee may actually be worth it, at least in the first year as a card member.
As a credit card rewards junkie I’ve never been shy about signing up for a new travel rewards card to take advantage of bonus points and perks. If I find good value beyond the initial welcome bonus and perks then I tend to keep the card. If not, then I cancel the card before the annual fee comes due again.
Still, $699 is a steep price to pay to experiment with the value of a credit card rewards program. Is the American Express Platinum Card worth the fee? Let’s take a look:
American Express Platinum Card Review
What attracted me to the Amex Platinum card is the 50,000-point sign-up bonus (when you spend $3,000 in the first three months). I had an annual car insurance bill due for $1,500, so after that I only had to spend $500 per month for three months to get the bonus. Easy.
Bonus 10,000 points:
Also, if you know an existing American Express Platinum Card holder and use their referral link to sign-up you’ll get an additional 10,000 points.
Transfer to Aeroplan Program
I like American Express Membership Rewards because I can transfer the points 1:1 to the Aeroplan program. With Aeroplan, 50,000 miles will get you two round-trip tickets anywhere in North America.
Assuming one mile is worth 1.5 cents to 2.5 cents then 60,000 points can be worth between $900 and $1,500 in travel rewards.
So with bonus points alone you can already see the tremendous value offered by the American Express Platinum Card.
The value doesn’t stop there.
With the American Express Platinum Card you’ll earn 1.25 Membership Rewards points for every dollar in purchases charged to your card. You’re automatically enrolled in the First Tier of the Membership Rewards program, where points can be transferred into other frequent flyer and hotel programs, including 1:1 to Aeroplan and Avios.
Use points to book flights within Canada or to anywhere in the world with the Fixed Points Travel Program.
Airport Lounge Access
Members get access to over 1,000 airport lounges worldwide including the Platinum Lounge Benefit, the Airport Club Program and Priority Pass at the “prestige level” which is valued at $399 USD per year and includes unlimited visits.
$200 Annual Travel Credit
You’ll also get a $200 annual travel credit, which must be redeemed through American Express Travel and paid for on your American Express Platinum Card.
The travel credit is available by calendar year, so if you apply mid-way through the year you’ll get one $200 credit, and then you’ll get an additional $200 credit when the calendar changes over to a new year.
Turn that $200 annual travel credit into cash (statement credit) by booking a fully refundable hotel. American Express will issue the credit, but the hotel won’t charge your card until after your stay – so just cancel your hotel reservation and pocket the $200.
Trick for Points Churners
One trick for new Amex Platinum cardholders to get $400 cash (statement credit) out of this program is to again book the fully refundable hotel early in the next calendar year (when your second $200 annual travel credit becomes available) and then cancel the hotel reservation once the credit gets posted.
Do this before your card anniversary (i.e. when the $699 annual fee comes due again) and you effectively reduce your annual fee to $299 in the first year.
Hotel Program Memberships
Your Amex Platinum Card automatically gives you the privileges of:
- Preferred Gold Membership in the Starwood Preferred Guest program
- Gold Elite status membership with Radisson Hotels
- Complimentary Hilton Honors Gold Status membership
International Airline Program
Take advantage of the International Airline Program, which offers discounted companion tickets, complimentary upgrades, or special discounted airfares to destinations around the world.
Travel Insurance Coverage
Extensive travel insurance coverage includes:
- Emergency Medical Insurance (Out of province/country)
- Trip Cancellation Insurance
- Trip Interruption Insurance
- Car Rental Theft Damage Insurance
- Flight Delay Insurance
- Baggage Delay Insurance
- Lost or Stolen Baggage Insurance
- Hotel/Motel Burglary Insurance
- $500,000 Travel Accident Insurance
- Travel Emergency Assistance
- StandbyMD Travel Medical Concierge
Amex Referral program
As a Platinum card member, you can earn a referral bonus of 15,000 bonus Membership Rewards points for each approved referral, up to a maximum annual referral bonus of 225,000 Membership Rewards points.
Is the Amex Platinum Card worth $699?
After unpacking all of the value included in the American Express Platinum Card we can determine whether the $699 annual fee is worth it. Here’s a quick calculation:
- 60,000 points (when using a referral link) = $900 to $1,500
- Annual Travel Credit = $200 to $400
- Airport Lounge Access = $0 to $399 (depending on usage)
- Total value = $1,100 to $2,299
Subtract the annual fee ($699) and you’re left with a net value of between $401 and $1,600 in the first year.
It’s clear that American Express Platinum Card members can extract enough value from the program in the first year to warrant applying for the card. Its ongoing value after year one will depend on your personal situation and usage of the other benefits such as lounge access and hotel upgrades. To me, the ongoing value is questionable but your mileage may vary.
The bottom line: If you’re interested in the Amex Platinum Card for the premium travel benefits or simply to churn it in the first year, use my referral link and get an extra 10,000 bonus points to get you started.
Credit card comparison sites can be useful for finding and sorting through dozens of credit cards to determine which ones might be right for you. Sites like RateSupermarket, RateHub, and GreedyRates rank cards using factors such as whether you want to pay an annual fee or not, if you prefer cash back or travel rewards, whether you pay your balance in full or not, and whether your card is for business or personal use (to name a few).
GreedyRates digs a bit deeper and asks you to estimate your monthly credit card spending in key categories such as groceries, gas, dining, and travel. It also asks how long you plan to keep the card, an interesting variable since many rewards cards pay juicy sign-up bonuses in year one but then fail to deliver meaningful rewards in subsequent years.
Unfortunately, these sites’ rankings can be biased – often displaying cards which pay them the highest referral fee ahead of other cards which may be a better fit for you.
Our own partners at creditcardGenius use a comprehensive and unbiased algorithm to rank a growing database of 159 Canadian credit cards, tracking 50+ features for each. They list cards from every major financial institution, even if they don’t pay a referral fee, so you know you’re getting an objective look at all your options.
What Credit Card Comparison Sites Are Missing
By using a credit card comparison site you’ll get a decent look at the best cards on the market as well as any current sign-up bonuses available. You might even get a slightly tailored recommendation based on your rewards preferences and spending inputs.
However, what these comparison sites lack is a truly personalized credit card recommendation. That’s because they’re all missing these factors:
1.) The Costco Effect
Ok, so you spend $800 per month on groceries for your family of four. But if most of that spending occurs at Costco or No Frills, for example, then any Visa or American Express recommendations are completely useless to you as an everyday rewards card.
That’s right, the Costco effect is real. So if you’re like me and do the bulk of your household grocery shopping at the warehouse giant, then you’ll have to ignore good cash back credit cards like the Scotia Momentum Visa Infinite card, or the SimplyCash Preferred Card from American Express. They’re no good to you at Costco, which only takes MasterCard.
2.) No foreign exchange fees
Most credit card issuers charge an insidious 2.5% conversion fee on your foreign purchases. If you’re the type of person that travels regularly across the border or abroad, or shops online in foreign currency, you’re going to want a card that avoids those fees.
Credit card comparison sites won’t factor in your foreign currency spending and therefore won’t show you when a card like the Rogers Fido MasterCard, which charges the typical foreign transaction fee but also pays 4% cash back on purchases made in foreign currency, actually outperforms a top cash back or travel rewards card.
3.) Additional perks that add value
How do you measure the other value-added perks that credit cards offer, such as a robust and comprehensive insurance package, or strong purchase protection and extended warranty coverage?
And what about other perks that can be measured, such as VIP airport lounge access and a free Priority Pass membership, offered by BMO World Elite MasterCard? Or the annual round-trip companion flight for $99, offered by the WestJet RBC World Elite MasterCard?
WestJet, along with some Aeroplan cards, offer a complimentary checked bag on flights booked with your card. Other credit cards offer priority check-in and boarding.
The WestJet RBC World Elite MasterCard and BMO World Elite MasterCard typically rank poorly when compared with other, more straight-forward, travel rewards cards. But for some, that companion voucher, or VIP airport lounge access, might be worthwhile.
I love to use credit card comparison sites to find and sort through the plethora of rewards cards in Canada. The key is that I use these sites as preliminary research and then, when I zero-in on a couple of cards that I like, I do my own research to see how they’d fit with my lifestyle and spending patterns.
The rewards credit card landscape is constantly changing and so it’s important to shop around and do your research to see whether your current credit card is still meeting your needs, or if something else in the market has emerged and is worth exploring. Take recommendations from credit card comparison sites with a grain of salt and make sure they match up with how you like to spend and earn rewards.