In a brewing battle of pricey credit cards, The Platinum Card® from American Express has beefed up a key feature, giving it a little more firepower as it does battle with a new card from Chase that has made credit card optimizers positively giddy.
Cardholders will now get 5 points per $1 spent on airfare under certain circumstances, up from a maximum of 2 points per dollar before. Initial response online was somewhat tepid among current and would-be cardholders, however, and American Express promised “further enhancements” were coming.Chase Sapphire Reserve℠, whose generous rewards and perks created so much buzz that The New York Times ran a story on the phenomenon and Bloomberg Businessweek magazine put it on the cover.
“Consumers’ reaction to Chase’s card demonstrated that there’s a large number of Americans who are happy to carry a premium card if the card’s ongoing rewards rates are good enough,” says Sean McQuay, credit card expert at NerdWallet. “American Express is beginning its fight to regain the crown by improving the card’s basic rewards structure, and I don’t expect this to be the last move.”
AmEx probably isn’t the only issuer taking a fresh look at premium benefits. Citi, for example, could decide to join the premium-card one-upmanship by boosting rewards and benefits on the Citi Prestige® Card, McQuay says.
“Americans will be the clear victors, with more and better credit cards to choose from,” McQuay says.
The new airfare rewards
Word that The Platinum Card® from American Express would be boosting travel rewards had dribbled out days before the official announcement. The confirmed details show that the new bonus is somewhat limited in scope:
- Consumers with The Platinum Card® from American Express receive 5 Membership Rewards points per $1 spent on airfare or hotels booked directly with airlines or through the issuer’s online travel agency, American Express Travel. That’s up from the previous rate of 2 points per dollar.
- All other travel booked through AmEx still earns 2 points per dollar.
- Other spending earns 1 point per dollar.
The Chase Sapphire Reserve℠ and the Citi Prestige® Card, by contrast, give bonus rewards on a wider array of travel expenses, as well as on dining.
The change goes into effect automatically; cardholders don’t need to take any action.
AmEx promises more
“Travel is an important part of our cardmembers’ lives, and it’s becoming even more so for a new generation who are global and drawn to the access, experiences and service that come with American Express membership,” Denise Pickett, president of U.S. consumer services for American Express, said in a statement.
Pickett alluded to more goodies to come for holders of its premium cards. “You’ll see further enhancements for Platinum and Business Platinum card members and new programs that leverage the expanded network of small business merchants who now welcome American Express,” she said.
McQuay says that the rewards boost is a nice start, but that The Platinum Card® from American Express would better compete with the Chase Sapphire Reserve℠ if it also had a higher sign-up bonus and expanded its annual airline fee credit. (It did one of those things later, raising the sign-up bonus in March 2017.)
- Chase describes its sign-up bonus this way: Earn 50K bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®.
It also gives cardholders a $300 annual credit against any travel expense.
- The AmEx card’s bonus: Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months. Terms Apply.
It provides a $200 annual credit for incidental airline fees, such as for checked bags or seat upgrades. It doesn’t apply to airfare or to other travel expenses.
In online communities of credit card optimizers, many noted that the new offering did them little good because they rarely pay for flights, instead using accumulated points or miles.
On Twitter, many comments were lukewarm, like that of @jammy_sod to the American Express account: “this is great news but please also look into matching or exceeding other benefits of Chase sapphire reserve. Thanks.”
A Twitter user identified as Jake Counselbaum wrote, “Good stuff! But I think I’m still more tempted to reach for my new Chase Sapphire Reserve.”
User “Jairo C” tweeted, “so no increase to the travel credit and no flexibility to use on ticket purchases?”
Business card gets a boost
AmEx also spruced up the business version of the card, The Enhanced Business Platinum® Card from American Express OPEN. Cardholders receive half of their points back when they redeem them through American Express Travel for airfare booked on their pre-chosen airline or for a first- or business-class ticket on any other airline. Those carrying the business version also earn 1.5 points per dollar spent on purchases of $5,000 or more. Later, in March 2017, AmEx added the ability to earn 5 points per dollar spent on flights and prepaid hotels booked on amextravel.com.