It might be a status symbol — but one of the priciest credit cards on the market may not be worth the hassle for a large chunk of consumers.
The American Express AXP Platinum card offers a long list of benefits, including multiple $200 credits for airfare, hotels and Uber UBER. It also offers a $20 monthly credit for subscriptions to services such as Netflix NFLX, Disney DIS and certain newspapers; a $300 annual credit toward an Equinox membership; and reimbursement for the $85 fee for TSA PreCheck, a program that helps travelers get through airport security faster.
Most Read from MarketWatch
But the Platinum card’s $695 annual fee has raised some eyebrows among a few finance influencers who say they’re not sure its perks are worth the steep charge.
“It is truly overhyped,” financial consultant Shonda Martin said in a TikTok video posted in March that has racked up more than 750,000 views. “Do not get a Platinum card unless you are in the airport 10-plus times a year.”
Instead, Martin said in the video, she prefers the Amex Gold card, which offers four times the rewards points as the Platinum card on everyday purchases. Martin did not respond to a request for comment.
In another TikTok video, a user said she’d be canceling the card after having visiting four American Express Centurion airport lounges and finding them overcrowded.
“Also, the lounge suite is not that good,” she added in the video, which was viewed more than 350,000 times.
Other finance influencers have vouched for the card’s plentiful perks.
“It’s probably my favorite card as of right now,” Humphrey Yang, a financial content creator with more than 3 million followers on TikTok, said in a video posted in December. He can make up the cost of the fee by utilizing credits toward travel, his subscriptions and his gym membership, he said.
In a statement, American Express said the Platinum card offers “$1,500 of annual value across travel, dining, wellness, retail and entertainment.”
The credits are “easy to use,” the company said, and cardholders can track which ones they’ve used in the Amex app.
On Friday, American Express announced second quarter earnings results showing it raked in more than $2 billion in card fee revenue for the first time.
That’s an important measure for the company because it indicates “people are buying into the value proposition and renewing their membership,” Chief Financial Officer Christophe Le Caillec told MarketWatch. He also emphasized the point in an earnings call with analysts.
American Express shares were down more than 3% in early Friday trading, but up more than 27% year to date.
Why the American Express Platinum card might make sense for you
Who’s right about the real worth of the card with the cachet?
It’s tough to make a decision about the Platinum card based solely on social-media snippets. The question of whether it works for you hinges on how you already spend your money and whether the card’s offered perks and credits match your existing lifestyle, according to financial experts.
The Platinum card’s $695 annual fee is currently the highest for mass-market credit cards, according to Dave Grossman, the founder of Your Best Credit Cards, a comparison site to shop card offers. The average annual fee for a credit card from a large bank is about $157, according to the Consumer Financial Protection Bureau. That’s a fraction of the fees on credit cards for the super-rich. The American Express Centurion Black card has a $10,000 initiation fee, plus a $5,000 annual fee.
By Grossman’s count, two Delta DAL SkyMiles cards — also through American Express — have the second-highest yearly fees, at $650 each. The Chase Sapphire Reserve JPM, another premium credit card, has a $550 yearly fee.
The Platinum card’s target audience is affluent travelers who love the airport-lounge experience, he said. To calculate whether it’s worth it, people should first look carefully at the card’s perks for services and stores they like and already use — or think they’ll enjoy using. Add up the value of those offers and see how it stacks up against the fee, Grossman said.
“If you use enough of these credits, you can actually be ahead on the card, despite the lofty fee,” he said.
Altogether, the Platinum card’s panoply of credits is worth more than $1,500 a year, according to the American Express website.
Who should steer clear of the American Express Platinum card
But many people don’t have the jet-setting lifestyle to make the Platinum card work, financial advisers said — and there’s a danger of people increasing their spending just to feel like they’re getting the most out of the card’s bells and whistles.
In general, high-fee travel rewards cards “can be highly beneficial for frequent travelers and high spenders who can maximize the perks,” said Steven Calio of CSG Financial, a financial advisory firm based in Dover, Del. “However, they are not suitable for everyone, particularly those with tight budgets or infrequent travel habits.”
“Most people are not vigilant enough to keep track of the rewards to ensure they are obtaining enough of them to make up for the $695 fee,” added Heath Biller of Fiduciary Financial Advisors.
“There are likely some people who already do everything the rewards are offering, so for them, it may make sense to have the card,” he said. But for the people who fall outside that category, the risk is overspending just to tap the card’s statement credits, Biller said.
That’s worth remembering at a time when Americans have racked up $1.12 trillion in credit-card debt through the first quarter of the year — and when some are still paying off the debt they racked up during last summer’s spending spree.
People who don’t regularly pay off their credit-card balance each month should steer clear of any card with a steep fee, including the Amex Platinum, said Amy Rosenow, a certified financial planner and founder of the advisory firm Fearless Financial.
“Premium credit cards should never be considered unless all credit-card bills are paid in full every month,” Rosenow wrote in an email, adding that she typically recommends cards like the Platinum to her “affluent, travel-loving clients.”
So the Platinum card may only make sense for a certain kind of traveler. But if someone isn’t interested in travel perks and points, there’s also a whole world of other rewards credit cards out there for people who can afford to indulge perks. That starts with cash-back cards. It’s easy to find cards paying back 2% cash on purchases, and shoppers shouldn’t settle for lower offers, Grossman said.
“Those cards are great for people who just don’t want to put any effort in this and don’t want to cash out for travel,” he said. Of course, he added, this person could always use the cash for travel if plans pop up.
Another factor to consider: the retention bonus
The Platinum card has its lovers and its haters. It also has the people in between, like Eric Jones.
Jones, co-founder and head of operations of the Vacationer, a website for consumers planning vacations, said the American Express Platinum card is losing appeal for him.
He pointed to an early-2023 change to the guest policy at the Centurion Lounge stating it now costs $50 per adult guest unless the cardholder is spending $75,000 yearly on eligible purchases. The complimentary guest access kicks in after that point.
There’s also the array of credits that Jones says don’t make sense for him personally, like the $100 Saks Fifth Avenue credit.
“I always find myself ‘force buying’ something random just to take advantage of the credit,” he said. “The credit then is essentially a coupon for me to get a discount on an overpriced item I usually don’t even need.”
Still, Jones can’t quit the Platinum card. Every time he thinks about leaving, Amex extends him a retention offer that pulls him back. For him, the retention bonus translated to $150 off the yearly fee two years ago, and then 25,000 points in exchange for spending $3,000 in three months this year.
People may not always know it, but across the credit-card industry, longtime customers with solid payment records can always contact their card issuer to see what sorts of retention bonuses they can give to hold onto the customer’s business.
“I always recommend asking if there is a retention offer available for you for any of these types of cards — it never hurts to ask, even if you are intending to keep it,” he said.
What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can fill out or write to us at . A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.
Most Read from MarketWatch
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
