With more competition in the premium card space, can American Express continue to make their benefits so hard for cardmembers to use?
Unnecessarily Complicated American Express Platinum Benefits
American Express was long the leader of the premium card market with eye-catching benefits that delivered real value. New entrants have made it clear that these benefits are neither exclusive nor as difficult to give to customers. Here are just some of the benefits offered by the Platinum card from American Express that the bank complicates unnecessarily:
- $200 Airline fee credit
- $200 Hotel credit
- $240 Entertainment credits
- $200 Uber credit
- $100 Saks credit/$400 Dell credit
- Lounge Access
Without going into all the other benefits that are complicated for virtually no reason, these ones are the lightning rods for many.
$200 Airline Fee Credit
On the surface, it looks like a great deal – offset the ancillary fees an airline charges so you don’t have to pay them, up to $200 every calendar year. Except it’s not that easy. If you have status with a major carrier, you’re unlikely to pay fees for checked bags, seat assignments, or even upgrades. When you do incur the charges (nearly every airline charges for wifi), you may have to call in if the charges don’t show up as AMEX expects to see them.
AMEX also makes cardmembers select their one airline at the beginning of the year or contact customer support to change it. If you usually fly on American but had to book United in a pinch, none of those fees are offset because you didn’t decide at the beginning of the year every eventuality for your travel.
For carriers like Spirit and Southwest that have traditionally lower fares, American Express can’t differentiate between the fare and the fees in some cases. This could mean you could have incredibly inexpensive flights free of charge, or it could mean that you have to contact support every time one of these charges comes in to ensure the credit is used.
Also, it’s not available for every carrier, so on the off chance you have a trip to Europe with an EasyJet leg, sorry Charlie, that isn’t an approved airline and will incur charges.
$200 Hotel Credit
This is a new benefit this year, and I really like the idea of finding new properties that I might not have tried due to my hotel loyalty points I would prefer to spend. But here come the caveats. The $200 Hotel credit only applies to hotels that are either a part of Fine Hotels & Resorts, or The Hotel Collection, and it must be booked with American Express travel; it also requires a two-night stay for The Hotel Collection, but not for Fine Hotels & Resorts.
The selection is the problem here. In Manchester, England for example this December offers just one property, the Kimpton Clocktower – The Hotel Collection. In Athens during the same trip, six properties split evenly between the two programs, in Barcelona, a few more but few recognizable properties.
Booking two nights on AMEX Travel also costs more ($458 vs $424 on Hotels.com) so while the credit offsets the higher nightly rates on a two-night stay with the initial benefit, it might not negate it in other examples and for longer stays.
That also suggests that a hotel doesn’t flow in and out of the program as we found with one hotel in Manchester – we went from two options to one as we hesitated on booking.
$240/year Entertainment Credits
Do you breathe oxygen? If you answered yes, you probably have a streaming subscription. This Entertainment credit can help wipe that away every month, but only if that entertainment outlet is:
- The New York Times
That’s right, every month you can spend $20 on these services and have that amount reimbursed. However, if you want to prepay for an annual subscription to the Times or SiriusXM – you only get the first $20 wiped even if you don’t use the rest of your credit and would be under the annual limit.
Don’t get me wrong, I subscribe to Audible and love it and that’s $15 back in my pocket. But Hulu, Disney+, and ESPN+ from my Verizon service is far more valuable to me. T-Mobile offers a free Netflix account – the only reason these are on there is because they made a deal with AMEX and discount the charges. It’s not a useful benefit to most.
The worst part is, even having a card with the benefit and finding a service for which you value enough to charge isn’t sufficient for receiving the benefit – cardmembers must first login to their account and “enroll” to receive the benefit instead of simply wiping the charge.
$200/year Uber Credits
Some of the US population lives in big cities on the coast where a car isn’t required and Uber is a way of life. Others always have a car, even a rental car when they travel. I was in the latter group and even on the odd occasion whereby I would use an Uber, the charge was routinely more than the $15/month – the limit. If I have three straight months where I use $0 of my $45 credit for that period but in the fourth month have a $60 Uber, I get $15 off because it fell outside of the calendar month.
December gets an extra $20 over the other months for those at home doing the math.
Cardmembers need to pair their Uber account with the credit so that it’s wiped off each month.
$100 Saks Credit/$400 Dell credit
Each of these two credits (Saks for personal American Express Platinum Cards, Dell for the business version) are split up between the two halves of the year. But that may not matter. If you buy a must-have computer accessory from Dell in early June, but it doesn’t ship until July, the charge will hit on the other half of the year and now you’ve used your second credit.
The annoyances with these credits are:
- Split between January-June, July-December instead of just giving the whole amount regardless of when the purchase is made,
- Can be hard to use given the buyer doesn’t know when it will ship, thus bill,
- Requires enrollment, and;
- Is for Dell rather than a more useful and technologically agnostic outlet like Best Buy. If this was Apple instead of Dell, I am sure it would get the same number of groans.
The annual includes lounge access. Centurion Lounges are popping up everywhere (but that doesn’t mean you can get into one) and Priority Pass Select opens another 1,200 lounge doors.
Starting in 2023, despite increases in the annual fee from $450 just a couple of years ago to now $695, guests are no longer allowed with cardmembers into the Centurion lounges unless they process $75,000/year on the card. In India, with less than a month’s notice – no guests of any kind are permitted.
The Priority Pass membership requires not only enrollment, but registering for a card with Priority Pass, and unlike other cards that offer the perk, it does not include restaurants which the lounge membership has added in airports with few lounge options.
Other Banks Do It Better
At nearly every turn, other premium cards offer these perks without requiring their premium customers to jump through hoops. That makes it clear that it’s not impossible or even difficult for American Express to do the same, they just believe there are opportunities to take advantage of customers who aren’t in the know.
Even I didn’t realize that enrollment was required for the entertainment credits before I had billed two months on one of our AMEX cards and I write about this stuff. Chase, as a competing credit card issuer, has made it especially easy to be lazy with benefits and get the value.
For example, any vendor that codes as “travel” which of course includes hotels, airlines, (whether tickets or fees), but even travel agencies, theme parks and parking – are wiped off the bill up to the first $300 with the Chase Sapphire Reserve. The Capital One Venture Cards allow cardholders to use points to offset any charge that is coded by credit card processing machines as “travel” as well.
Chase doesn’t make you register or enroll for the benefits you receive like the car rental damage waiver on its Sapphire products. There’s no further action required for Capital One Venture cardholders to use their existing Venture cards for entry into its new lounge at DFW. They are making it easy for customers who don’t yet have the premium card to enter as opposed to telling its premium cardmembers that they aren’t worthy of entry.
Can AMEX Remain Competitive?
I can appreciate that American Express has long been the brand to beat in the premium credit card space and that they invented the concept. However, it’s been a long time since American Express re-evaluated not just what benefits it offers, but how it offers them.
To be clear, American Express holds the most absolute value despite their higher annual fees, and despite not all benefits necessarily applying to every customer in full. There’s still more than the annual fee in value for those who have American Express Platinum Cards. Both the Chase Sapphire Reserve can make the same claim, as can the Capital One Venture X but perhaps in both cases to a lesser degree.
That said, many cardholders are growing weary of American Express treating their cardholders as if they truly are “members” admitted into their private club of SiriusXM users and $15/month Uber riders. They believe that adding a Wal-Mart+ membership free for the first year, which basically gives customers free shipping on things sold by Wal-Mart, is in some way a value add for the average cardholder.
American Express has an awful lot of competition these days and send a mixed message when one side of their mouth says “our premium lounges are so popular that we just can’t allow guests any more” to becoming the Entertainment coupon book.
I’d like to see a revamped Citi premium card, or perhaps one from Barclays or Bank of America that competes with the AMEX Platinum to really drive some better change in the industry and I don’t know if those banks will be able to resist. Chase has been very public about just how successful their premium card push has been and Capital One clearly wants to chase that as well.
American Express unnecessarily complicates benefits that could hold real value for travelers but don’t for highly correctable, customer-friendly reasons. If they don’t want to offer a benefit, then don’t, but benefits won’t add value if they are a pain to receive. It has the opposite effect, something AMEX should know by now. I know that there are terms of service and that just because terms apply to receive a benefit, doesn’t mean it’s valueless, but it shouldn’t be work for the client. And if anyone at American Express is listening: that centurion on the front of the card is supposed to be for the protection of the cardholder, not guarding the gates against your own customers.
What do you think? Does American Express make its benefits unnecessarily complicated? Do you think competition will change this?