Rookie Wednesday: Is it worth paying THOUSANDS a year for high end travel cards? Why pay for two (or more)?

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RenesPoints Rookie

Welcome to a weekly feature on the Renés Points blog. Each week this series covers in a “rookie” way either a Delta or travel related theme and attempts to break down to a basic level each topic. You can read up on all the previous posts HERE. Now on to this week’s feature.

my delta amex reserve card and amex platinum business card renespoints blog

I am HAPPY to pay 2x$450 for these cards!

There are two cards that live in my wallet year after year. One of them I pull out and use all the time up to a certain point and the other I just about never ever use. So that begs the question that was recently asked by a reader Shami who says:

“Can you lay out side by side reasons for keeping these two cards. Delta AMEX Reserve and [non-Delta] AMEX Platinum business”

This is a great question. After all, there are nowadays a large number of high end cards that are competing for your business. They want you to get the cards and to USE the cards as well. One of the best ones EVER has recently made so many changes that I no longer see any value from the card at all (as of next year) and will dump it. There are not enough perks remaining after the utter destruction of benefits to justify my keeping it.

But what about the two AMEX cards I have shown you above. Why am I willing, year after year, to pay $450 each for the:

This is a legitimate question and a good one. Not only is it a good one but it is a personal question not a simple math for everyone question. Take the Citi Prestige I talked about above. A number of readers said the current 4th night “free” perk is all alone a reason enough for them to pay the fee year after year. That is not me. The golf perk was reason enough year after year, for me, but that will soon be gone. It is all about value to me (or to you).

So am I getting value each year from the two AMEX cards I hold each year? You betcha and let me explain in detail why. First let’s start with my Delta Reserve card. As mentioned I USE this card a ton starting on 1JAN each and every year. I tend to spend a bunch in the first month to reach at least $25,000 in spend to be MQD exempt before 1FEB when the new medallion year begins. If I need the MQMs I push to spend $30,000. Now yes I can be MQD exempt from spending on either the Delta Gold or Platinum or Reserve card so this alone in no way justifies me paying such a high fee year after year. But look at what I get if I do spend a total of $60,000 between 1JAN & 31DEC (that is posted charges). I net:

  • 30,000 bonus SkyMiles worth at least 1 cent each or $300
  • 30,000 bonus MQMs worth whatever I feel they are worth.

So the super simple math here tells me that just the bonus SkyMiles, in a net sum equation, brings my “real” out of pocket fee for holding the Delta Reserve card down to $150. So do all the remaining perks of the card like the bonus MQMs, the BOGOF, the improved upgrade chances and SkyClub access (if I needed it – I don’t) add up to be worth $150? 100% without question YES! It really should not be hard for anyone to do this and to see why there is such real value in paying this fee year after year after year. This also does not take into account any bonus points from retention calls I make on almost ALL of my cards from ALL banks year after year. And really that point brings me to the next $450 fee card the non-Delta AMEX Platinum business card.

This one I almost spend nothing on each year. I take that back I spend a little on UBER each year and get bonus points and I do spend on SYNC deals each year and I spend 4x$50 each year to get the incidentals travel perk credited back. So if we just start with that last one alone I am net down to $250 for the card out of pocket. Since I don’t like using the card for earning membership rewards points for daily spend (there are too many other choices that offer more points) are the remaining perks alone worth the net fee I pay? 110% YES in this case and let me show you why.

I am a HUGE fan of the Centurion lounges. I have visited the SPA in DFW enough times this year alone to pay that back over and over. But I also really value the Gogo passes each year I get as they are good on international flights and if you have not noticed the cost for wifi over the water is not cheap. Again, real value there that I do not have to spend my own money to buy.

If you wanted to get super nit picky, on money back, I do get $100 for my GOES renewal every 5 years so that is $20 a year I get back. Not a bunch but still the money and math matters.

But what about retention bonus points (see E13 post) for keeping the card and paying the fee year after year. Yeah, really not so much. Let me tell you a very embarrassing story. Since I just automatically call on all my cards each year I saw that the fee billed and did not really think about what card I was calling on. Now card companies tend to be “nice” to you when you spend a ton with them each year. Think spending tens of thousands of dollars. They hate to see this kind of spending go to another bank. But again on this card I spent very little so the conversation with the rep went something like this:

Me) So I wanted to see if something could be done to adjust the fee or get some bonus points perhaps or a statement credit perhaps.

Rep) Mr. De Lambert, you have hardly spent anything on this card all year long and in fact most of the charges included credits back for incidentals and large credits back for AMEX offers. NO! We are not going to give you anything back.

Ah, hem. Well now. Yes. I saw his point and duly tucked my “tail” between my legs and dropped the call as gracefully as I could. #NoteToSelf – don’t call on cards you spend nothing on and expect them to be nice to you (nor should they be for that matter).

So I hope, Shami that I have laid out in a clear way why I, at worst, don’t mind paying net $380 for cards that charge me $900. I am personally gaining so much in value that these fees will be paid year after year forever as long as the card perks do not adjust down in some way as long as I keep flying Delta as my primary airline. – Rene

PS – Just as an FYI I also pay for yet another $450 a year card, the CNB Crystal card as that also give me more perks per year than it costs me.

 

Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express.

 

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15 comments

  1. As far as the Reserve card, I know you know that $60K in spend is worth $1200 in 2% cash back. That opportunity cost should be added on the $450 fee as a cost. Of course, unless this $60K is just regular spend you make, manufacturing that spend has at least a 1% cost in fees and time, probably closer to 1.5%, let’s call it another $200 for excess $12K MS over regular spend. Total costs = $1850 for those Reserve card benefits.

    90K skymiles @ 1 cent = $900
    5K bonus skymiles for Delta purchases = $50
    Companion cert if redeemed in A/I class = $750
    No value for SkyClub since you already have access
    Total so far = $1700 in benefits

    That leaves the 30K MQM & improved upgrade chances. Those could certainly be worth more than the additional $150 in costs, and you could suggest that sky miles are worth more than 1 cent to you, but I just wanted to show that it’s not really a slam dunk choice and you’re basically paying in full for each benefit. To your credit, you do mention it’s a personal calculation. But paying in full doesn’t seem to be the point for most readers, right?

  2. So, for those of us who don’t have tens of thousands of charespect and don’t MS (sadly had to stop after death of BB), there’s no point in getting / keeping Reserve, right?

  3. @MBH – Please re-read the post. Just getting the bonus SkyMiles will raise your net cost but YOU may still personally value other perks. If it means 1 or 2 or 50 more upgrades (depending on how much and what fare class you buy) this perk alone may make it the card to hold for you.

  4. I’m keeping the Reserve for sure. As a PM, the (now published and advertised) upgrade tiebreaker is huge, as is the MQM bonus. The SkyClub access is the main reason I have the card though.

    I got the Platinum card for the 100K MRs offer, and I’m not sure whether I’ll keep it past a year. I’ve been impressed with PP lounges though (particularly the MSP Escape lounge), and I’m also pleased to have SPG and Hilton Gold. SPG Gold in particular is valuable, since it allows me to earn Starpoints with DL ticket purchases. That perk is way undervalued IMO.

  5. Another benefit of AMEX Plat is the free companion fare on international – business class – flights. Usually not much of savings but everyone once in awhile you can save a few thousand with this Plat card benefit.

  6. Another benefit of Amex Plat is use of Amex Fine Resorts and Hotels. They got me a room at the Las Vegas Bellagio for $400 less than Booking.com for 5 nights. Plus I got two free breakfasts every day. Plus I got $100 spending money we used the first night at dinner. Plus we got 4 PM checkout. There were hundreds lined up to checkout at noon. Nobody when I checked out at 3:30. Big benefits.

  7. @JohnHace and others – Yep there are way more benefits and perks than I have listed in the post. You all really make my point that is if you can extract more personal value from the perks then that is a reason for YOU to hold some card. Thanks for all the great personal examples you enjoy.

  8. How do you spend 25 to 30,000 on Delta Reserve card in the first one or two months? That is a tall order. Unfortunately for me MS on Amex stopped when Simon Malls stopped taking Amex as a form of payment. There is no other card that works for me at Walmart for MO.

  9. As the best status I can attain is Silver, and I live in Atl., it has been absolutely, 100%, useless. Not even bothering to chase it this year. A fried who droppned to gold from DM said gold is also useless (in ATL.).

  10. @mbh – Disagree. Yes takes more work and understanding but not at all worthless. Now if you mean Monday morning upgrades even Diamond is not very useful from ATL.

  11. René,

    Do you have a Nook or use the nook reader software for any books? If so, you are missing 5% back on spend for Amex Platinum on Open, as well as 5% back on Fedex, Hertz, 800 flowers and HP.COM
    Home Depot GC, 10,000 points for $100 gift card.

    Lets also not forget free Gold Status at Hilton and SPG and status at car rentals, Hertz Gold, Avis Preferred and National Executive. Use of Boingo and 10 GOGO inflight sessions.

    For the last 8 years, Amex has always ended up paying me for this card, as they used to also have 5% back on some hotel stays. Since my wife died earlier this year, my BN.COM spend has been greatly reduced, so I will probably only end up with about $150 back on the 5% open, but when added with the access to the Sky Club, priority clubs and Amex Lounges, it still pays for itself.

    Gregg

  12. No, I mean any flights, any time. There are always at least 20 people ahead of me in the upgrade list. I tried flying really unpopular times to see if that would help, but it didn’t. There really are relatively few people in ATL that fly and do NOT have status with DL. I’ve read all the perks and find none of value to me (or those that are, I can get other ways).

  13. @mbh – Try #TeamBoardLast. There are many UGs to be had if you push it and work it as Silver and Gold.

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