Fed Up: Downgrading High Annual Fee American Express Cards
After the latest hike in exchange for more coupons I don’t care about, I am fed up with American Express and its useless coupon card.
Fees Increase, Again
As covered here, and virtually everywhere, American Express is again increasing its fees following Chase’s own increase for the Sapphire Reserve card. When I first started with American Express, the Platinum card was the most expensive on the market at $450. In 2017, it was raised to $550, then $695 four years later in 2021, and now four more years later, it’s at $895. It’s doubled in eight years and while all costs have risen over that period, they haven’t doubled.
Over time I acquired first a personal version of the card, then a business version, and then a separate business version for another company. The third, I will maintain as it’s genuinely an important credit tool for my business and the exceptional credit flexibility the bank offers is vital for that company.
But that’s the end of the road. I’m not biting on any credits or bonus points to stay for the first two versions I mentioned, I’m just done when it’s not a genuine and necessary component to my business. For what it’s worth, the new mirrored version is impressive.
Credits I Won’t Use
Matthew identified some new credits that the card adds to justify the new fee, but I’m just not interested. Given I have to keep one of the Platinum cards for business use, that still gets me some of the most important features like access to Centurion Lounges which really are some of the best.
I have found the Fine Hotels & Resorts Collection difficult to find value and have yet to execute a stay on the benefit – increasing it doesn’t add value to me. Uber One is included with other products, and the Uber credit rarely saves me money – rather I remember that I haven’t spent it near the end of the month, and scramble to overpay for food I have delivered or pick up myself just to use the credit. I’ve yet to stay in a Leading Hotels of the World property (though I’m not opposed) so having status in the program doesn’t help.
The entertainment credit is only helpful if I bill directly to the AMEX, and I get several of them included in other programs like T-Mobile. The $400 annual Resy credit is really $100/quarter, but it’s just more hoops to jump through. I don’t want to go out of my way to spend $75/quarter at Lululemon (that doesn’t buy much by itself.)
If there was one particular aspect that embodies what the American Express Platinum experience has become it would be the Oura credit. Oura is a wearable technology device that tracks biological data of the wearer. It starts at $349 but American Express now offers a $200 credit.
Cool.
But the credit only applies to equipment purchases which only matters because to get some of the key benefits (heart rate monitoring, sleep analysis, temperature monitoring, and a beta version of menstrual cycle prediction) is going to run you $5.99/month more. The credit can’t be applied to the subscription, an added warranty, or anything besides the equipment itself. To review, American Express has increased the annual fee to cover a credit toward a product I don’t want that only covers 40% of the cost and doesn’t include a subscription that will cost another $70/year to effectively use the device.
Where We Might See Some Change
Maybe the majority of American Express Platinum Credit Card members won’t discontinue using their cards over the fee and benefit changes. But if enough do, and if some become less engaged in the Membership Rewards program generally, we might not see a reversal of fee creep, but we might see better value for points instead. That’s one of my hopes from this.
Consumers are trading down all over the premium economy which is why Starbucks is closing hundreds of stores and laying off nearly a thousand corporate staff members. Resale value of high end cars are down significantly, Jaguar/Land Rover have an enormous supply of unsold vehicles at the moment. Chase and American Express may see pushback as Delta did last year. Capital One is still out to market with its Venture X at what seems like an underpriced $395 annual fee (no doubt it will increase next year.)
We might also see an easier path for using these coupons or those that are of more common value. It would be amazing if there wasn’t an asterisk next to nearly every benefit offered. The airline fee credit has to be selected in advance, is hard to change throughout the year, and isn’t a general credit. If you only use Uber once a year and spend $200 during your visit, you’re still only going to get the monthly allowance in value.
I understand why this exists (to promote frequent use of the partner brand and encourage regular use of the card) but it irritates users and for those who are keeping track, causes them to feel that annoyance and run that value analysis every time it’s encountered.
Conclusion
I downgraded my American Express Platinum cards because it no longer makes sense to continue to pay for coupons I don’t want or need. The areas where I find value come with strings attached, caveats, and asterisks but my annual fee does not. If American Express (and/or Chase) see members leaving or disengaged with the products, they could offer retention bonuses or enrich the cards further. But the real value would be if the banks increase the value of the points they deliver or reduce the hurdles to glean value. It may be wishful thinking, but I am voting with my dollars.
What do you think?