American Express has announced major changes to its Platinum and Business Platinum cards later this year. Is this a bid to steal Chase’s thunder, or will we see a big change in two of AMEX’s most popular card products?
Big Changes Teased For American Express Platinum
AMEX shares that “major updates” are coming to both its Platinum and Platinum Business cards this autumn.
Howard Grosfield, the AMEX Group President of US Consumer Services, explains:
“More than forty years ago, we introduced the Platinum Card, and we continue to offer Platinum Cards with global servicing, unique benefits and experiences that our Card Members love. Platinum Card benefits and services resonate across generations, particularly with Millennial and Gen Z who accounted for 35% of total U.S. Consumer spending last quarter. We’re going to take these Cards to a new level, not only in what they offer in travel, dining and lifestyle benefits, but also in how they look and feel, to meet the evolving needs of our customers.”
I think the metal cards currently offered are very attractive: understated, classic, and durable. I’m not sure changing the way they look and feel makes sense, especially as more move to tap-and-pay for their purchases. I love the Apple Card, for example, but it never comes out of the desk drawer. While the need for a physical card declines as more and more businesses offer tap-and-pay, it’s nice to still hold a premium card in your hand.
We know that lounge access remains a fundamental value proposition of both the personal and business card. After Grosfield’s statement, AMEX highlights:
- The Platinum card offers more airport lounge options than any other credit card issuer on the market with access to over 1,550 lounges in more than 500 airports around the world
- AMEX is opening three new Centurion Lounges globally in the next year, bringing the total number of Centurion Lounges to 32:
- Newark (EWR)
- Salt Lake City (SLC)
- Tokyo, Japan (HND)
AMEX also highlights its Resy dining and curated hotel programs and its Fine Hotels + Resorts program (which objectively does outshine what either Capital One or Chase offer to their premium cardmembers).
Concerning the business card, AMEX says it “also plans to update the Business Platinum Card to offer Card Members more benefits they can use to help their companies grow.”
The Coupon Book Approach Is Not My Favorite, But Understandable
With few exceptions, I find that every time a major credit card issuer tinkers with its card benefits, the benefits go down (and the annual fee often goes up). I think part of this announcement is aimed at stealing some thunder from Chase, which will soon reveal details about a refreshed Sapphire Reserve card and a new Chase Sapphire business card. We don’t see specifics yet because AMEX is waiting to see what Chase is going to do.
AMEX (logically) wants to grow its revenue…these “major changes” are driven by a quest for profitability. Thus, I fear that AMEX will continue to take the “coupon book” approach, where a higher annual fee will come with additional rebates and benefits. The theory is that many will not use them and AMEX can just pocket the additional annual fee. It makes business sense: AMEX just has to strike the right balance not to turn people off and cancel the card.
Despite intentional efforts at reducing lounge crowding, AMEX lounges remain crowded, but I think whittling away the lounge benefits even further (by introducing caps on annual visits) would alienate a lot of people. Better to raise the annual fee $200 and offer a $250 Resy credit or raise it $400 and offer a $500 FHR credit.
One way that AMEX could probably squeeze $500+ more out of each member would be to allow a 35% rebate on flight redemptions on the personal card, like the Platinum card. AMEX would be foolish to eliminate the five points per dollar booking on flights via the AMEX portal.
CONCLUSION
I can’t say I’m feeling particularly optimistic about the coming card changes to American Express Platinum and Business Platinum, but AMEX sees the recent negative changes to the Capital One Venture X card and the imminent changes to the Chase Sapphire Reserve product as an opportunity to recalibrate and increase revenue. We will wait and see whether the changes will be good or bad (that will vary based on your individual sending preferences) and whether the annual fee will still be worthwhile.
Any guesses as to what changes we will see?
image: American Express
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I haven’t been to a Centurion lounge since Christmas Day. It’s basically a meaningless perk to me. I do value a lot of the coupon stuff, and SkyClub access the few times a year I fly Delta. Though with an AF increase, unless some really nice coupons are added, I seriously doubt I’ll be able to get the math to work; and Amex is probably fine with that. I don’t think I’m a very profitable member. I also think AMEX has a lot of catching up to do overseas. Europe, Brazil, and most of Asia have gone cashless, but Amex acceptance outside of hotels remains scant. It also not uncommon to encounter airlines that don’t take Amex. The Plat just isn’t a dependable card for those who do much travel outside of the US and Canada.
I have to “flip” through the coupon book a lot to find something that I will eventually use. However, I save at least $700 through the coupon book on purchases I would have spent regardless which claws back the annual fee. Getting uber cash and the hotel/airline credits via Amex travel is something that I do as well, so I get my money’s worth at the end of the day. Lounge access isn’t that important through the card for my routes as I’m a FB Ulti and LH HON regardless.