topic Re: Basic math for AMEX AF in Credit Cards

Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 14:28:05 GMT

Hi everyone. Understanding that everyone gets different value out of cards and sees returns differently based on usage... is there a basic formula somewhere or math someone has done to show min spend to offset AFs for the Amex Gold and Amex Platinum - considering none of the additional credits or perks were used (like Uber credits / monthly $10 dine credit etc)

for eg; Gold spend $x / year to offset $250 AF, not taking into account the additional credit the card offers, etc.

Wanted to check with the community before I did the work myself

Re: Basic math for AMEX AF

MudkipsRKooL — Tue, 28 Apr 2020 20:42:56 GMT

Yes I'm a no AF type guy as well. Always didn't think the Gold card was a waste of time etc... I would only factor in $0 airline and $0 dine credit. and would 1:1 (cash back) the rewards which was VERY bad so it wouldn't be worth it pass the first year. But if you factor in spending 4X on dining and 4X and doing "transfer partners for the 2:1 points" then it's worth it pass the 2nd year.

For example ignoring the travel credit and spending roughly $100/month on dining and $100/month on groceries and doing 2:1 transfer partner you would be at $762 first year and $72 the second year and onwards. Using the calculator at <Mod edit: Sorry, links to that site aren't allowed here. --UB>

Say you only spend $200 bucks on dining and $200 on groceries and you only redeem the points for amazon gift cards, you would be cash postive $4 year 2 and onwards.

But yea if you don't do the transfer partner and spend less (using it for SUB for other cards etc) you wouldn't like it. All in all Amex tries to retain you for their card exclusively unless you have a high annual salary/income, where you can apply for many cards and hit min. spends for many cards in a year.

Re: Basic math for AMEX AF

dragontears — Tue, 28 Apr 2020 14:50:17 GMT

@Anonymous wrote:
Hi everyone. Understanding that everyone gets different value out of cards and sees returns differently based on usage... is there a basic formula somewhere or math someone has done to show min spend to offset AFs for the Amex Gold and Amex Platinum - considering none of the additional credits or perks were used (like Uber credits / monthly $10 dine credit etc)

for eg; Gold spend $x / year to offset $250 AF, not taking into account the additional credit the card offers, etc.

Wanted to check with the community before I did the work myself

Short answer is no

Because the rewards are points it is completely based on what YOU value points at. If you value them at 0.5 cpp point the answer is different than if you value them at 3 cpp

Re: Basic math for AMEX AF

GmbH — Tue, 28 Apr 2020 15:00:54 GMT

These work fairly well.
https://www.thepointcalculator.com/Bank/MembershipRewardPoints/amex-points-calculators

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 15:07:49 GMT

@dragontears wrote:
@Anonymous wrote:
Hi everyone. Understanding that everyone gets different value out of cards and sees returns differently based on usage... is there a basic formula somewhere or math someone has done to show min spend to offset AFs for the Amex Gold and Amex Platinum - considering none of the additional credits or perks were used (like Uber credits / monthly $10 dine credit etc)

for eg; Gold spend $x / year to offset $250 AF, not taking into account the additional credit the card offers, etc.

Wanted to check with the community before I did the work myself
Short answer is no
Because the rewards are points it is completely based on what YOU value points at. If you value them at 0.5 cpp point the answer is different than if you value them at 3 cpp

Right, but once you decide that, it is very basic math to answer the question, which is, btw, the wrong question.

But assuming you value points at v cpp, then for gold, 4*(dining+supermarket spend) + 3*(flight spend) +(everything else) > 250000/v

where the left is spend in dollars. So if you use the card only for dining + supermarket, if you spend $6250, you would earn 25,000 points, which would equal the annual fee if you value points at 1 cent

Why it is the wrong question is breaking even should never be the goal, the question is whether this is the best you can do with cards you are likely to be able to get. So, if you value points at 1c, and most of your spend is in the "other" category, the gold makes no sense as you can easily get cards that earn more than 1c per $

This also ignores SUBs. A very good SUB can make up for a poor card for a while.

Re: Basic math for AMEX AF

Remedios — Tue, 28 Apr 2020 15:07:51 GMT

The way I understand Amex math ...

a+b=Maybe

Statement credit = Eat where we tell you

c x thought it coded as grocery = rut roh!

First Year + AF = works great!

Second year + AF= Do I downgrade or cancel

AF + cancellation = Why does it say I'm not eligible for future subs

Re: Basic math for AMEX AF

kdm31091 — Tue, 28 Apr 2020 15:15:35 GMT

@GmbH wrote:
These work fairly well.
https://www.thepointcalculator.com/Bank/MembershipRewardPoints/amex-points-calculators

Yes, this site is great. Easy to use and you can assign whatever value you want to the points and plug in your spend. You can also compare it against other cards to see what the best deal is.

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 17:01:17 GMT

With the current situation I would say both of those products are question marks. Without the being able to redeem MR for travel, wich seems to be the best value, then you would have to take a statement credit or use them for GC's to places you shop.

IF you're able to use the $120 dining credit on gold you're about halfway there already. But as said above, not being able to travel the $100 Airline and Hotel credit cannot be used.

If you're speaking strictly earning points for purchases, you could achieve it fairly quickly dining out at 4X points.

And being able to use MR's at Amazon is nice, I once redeemed 6K points for a $40 purchase. Which appears to be around 150 points per Dollar, so that seems to be one way to get CB out of your points in a crunch.

It also helps if you use Rakuten at places you shop to add a multiplyer to your point earning.

Re: Basic math for AMEX AF

kdm31091 — Tue, 28 Apr 2020 17:19:10 GMT

@Anonymous wrote:
With the current situation I would say both of those products are question marks. Without the being able to redeem MR for travel, wich seems to be the best value, then you would have to take a statement credit or use them for GC's to places you shop.

IF you're able to use the $120 dining credit on gold you're about halfway there already. But as said above, not being able to travel the $100 Airline and Hotel credit cannot be used.

If you're speaking strictly earning points for purchases, you could achieve it fairly quickly dining out at 4X points.
And being able to use MR's at Amazon is nice, I once redeemed 6K points for a $40 purchase. Which appears to be around 150 points per Dollar, so that seems to be one way to get CB out of your points in a crunch.

It also helps if you use Rakuten at places you shop to add a multiplyer to your point earning.

Right, but the thing is, redeeming the points for Amazon is (I think) 0.7cpp. So your 4x dining becomes just 2.8% which is decidely less exciting, being (a tiny bit) less than the 3% offered by many cards, plus the AF is a factor here.

I think if you aren't going to redeem for travel, your best bet is going to be gift cards. They are not all 1 cent per point, but some are. In the long run, the MR system really doesn't make much sense outside of travel redemptions because at the lower redemption rates you'd be better off with a cash back card.

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 17:37:28 GMT

True. But hopefully we're only looking for a short term offset before we can go back to traveling. For Gold cardholders who can take the dining credit, we're only looking to offset the remaining $130. And dining is the higher point earner which can be earned at any restaraunt, and not limited like their "category" cards like Grocery etc. Though I guess one should expect eating out at a gas station will earn the 4X points. lol

Unfortunately without some type of travel it seems like the Gold will not be getting much use this year, aside from the occasional Pizza delivery or other takeout establishment. So I'm hoping that I can at least earn enough to cover that $130, and if this situation contiues into next year I will likely have to close it down for a few years until we get back to some type of normalcy.

My AF hit this month so I've got another year to see how it shakes out, or if the rumored changes do anything to help.

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 18:09:51 GMT

@Remedios wrote:
The way I understand Amex math ...

a+b=Maybe
Statement credit = Eat where we tell you
c x thought it coded as grocery = rut roh!
First Year + AF = works great!
Second year + AF= Do I downgrade or cancel
AF + cancellation = Why does it say I'm not eligible for future subs

Ha! This made me chuckle.

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 18:14:38 GMT

@Anonymous wrote:
True. But hopefully we're only looking for a short term offset before we can go back to traveling. For Gold cardholders who can take the dining credit, we're only looking to offset the remaining $130. And dining is the higher point earner which can be earned at any restaraunt, and not limited like their "category" cards like Grocery etc. Though I guess one should expect eating out at a gas station will earn the 4X points. lol

Unfortunately without some type of travel it seems like the Gold will not be getting much use this year, aside from the occasional Pizza delivery or other takeout establishment. So I'm hoping that I can at least earn enough to cover that $130, and if this situation contiues into next year I will likely have to close it down for a few years until we get back to some type of normalcy.

My AF hit this month so I've got another year to see how it shakes out, or if the rumored changes do anything to help.

Yeah. Lots up in the air depending on current world affairs and what sort of travel you can do. Also, what sort of personal travel. 95% of my travel is work and it's very comfortable with all my existing statuses and perks, luckily.

I guess seeing these new perks that are being rumored around might help with this conversation. 1st week of May might have been the date I keep reading for Amex updates so I guess we just wait a week to find out.

Re: Basic math for AMEX AF

notmyrealname23 — Tue, 28 Apr 2020 18:48:12 GMT

@Anonymous wrote:
True. But hopefully we're only looking for a short term offset before we can go back to traveling. For Gold cardholders who can take the dining credit, we're only looking to offset the remaining $130. And dining is the higher point earner which can be earned at any restaraunt, and not limited like their "category" cards like Grocery etc. Though I guess one should expect eating out at a gas station will earn the 4X points. lol

Unfortunately without some type of travel it seems like the Gold will not be getting much use this year, aside from the occasional Pizza delivery or other takeout establishment. So I'm hoping that I can at least earn enough to cover that $130, and if this situation contiues into next year I will likely have to close it down for a few years until we get back to some type of normalcy.

My AF hit this month so I've got another year to see how it shakes out, or if the rumored changes do anything to help.

I already know from my AMEX Hilton (no AF) that all the grocery stores I normally shop at code for a multiplier (I'll basically nail the $1k spend SUB for that card within 2 months), so once AMEX Gold is a possibility I'm going to be on it. Even at normal grocery spend for my household it's worth a $250 AF before the $100 flight credit or the $120 "$10 of random food stuff a month" credit , and my normal travel spend separate from dining/airlines easily justifies an AMEX Green (and I can use Clear, and already enrolled, since the government already has my biometrics thanks to NEXUS and Global Entry. The LoungeBuddy credit is more "eh" but I'll probably use it at some point). The AMEX Hilton is a $0 AF interim step while I prove to AMEX they should give me the shiny.

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 18:54:35 GMT

@notmyrealname23 wrote:
@Anonymous wrote:
True. But hopefully we're only looking for a short term offset before we can go back to traveling. For Gold cardholders who can take the dining credit, we're only looking to offset the remaining $130. And dining is the higher point earner which can be earned at any restaraunt, and not limited like their "category" cards like Grocery etc. Though I guess one should expect eating out at a gas station will earn the 4X points. lol

Unfortunately without some type of travel it seems like the Gold will not be getting much use this year, aside from the occasional Pizza delivery or other takeout establishment. So I'm hoping that I can at least earn enough to cover that $130, and if this situation contiues into next year I will likely have to close it down for a few years until we get back to some type of normalcy.

My AF hit this month so I've got another year to see how it shakes out, or if the rumored changes do anything to help.
I already know from my AMEX Hilton (no AF) that all the grocery stores I normally shop at code for a multiplier (I'll basically nail the $1k spend SUB for that card within 2 months), so once AMEX Gold is a possibility I'm going to be on it. Even at normal grocery spend for my household it's worth a $250 AF before the $100 flight credit or the $120 "$10 of random food stuff a month" credit , and my normal travel spend separate from dining/airlines easily justifies an AMEX Green (and I can use Clear, and already enrolled, since the government already has my biometrics thanks to NEXUS and Global Entry. The LoungeBuddy credit is more "eh" but I'll probably use it at some point). The AMEX Hilton is a $0 AF interim step while I prove to AMEX they should give me the shiny.

Well, still depends how you redeem the MRs. You can get 3% back with no AF (maybe with caps) so 4x needs a good cpp value to be the justification

Re: Basic math for AMEX AF

Anonymous — Tue, 28 Apr 2020 18:56:28 GMT

@notmyrealname23 wrote:
@Anonymous wrote:
True. But hopefully we're only looking for a short term offset before we can go back to traveling. For Gold cardholders who can take the dining credit, we're only looking to offset the remaining $130. And dining is the higher point earner which can be earned at any restaraunt, and not limited like their "category" cards like Grocery etc. Though I guess one should expect eating out at a gas station will earn the 4X points. lol

Unfortunately without some type of travel it seems like the Gold will not be getting much use this year, aside from the occasional Pizza delivery or other takeout establishment. So I'm hoping that I can at least earn enough to cover that $130, and if this situation contiues into next year I will likely have to close it down for a few years until we get back to some type of normalcy.

My AF hit this month so I've got another year to see how it shakes out, or if the rumored changes do anything to help.
I already know from my AMEX Hilton (no AF) that all the grocery stores I normally shop at code for a multiplier (I'll basically nail the $1k spend SUB for that card within 2 months), so once AMEX Gold is a possibility I'm going to be on it. Even at normal grocery spend for my household it's worth a $250 AF before the $100 flight credit or the $120 "$10 of random food stuff a month" credit , and my normal travel spend separate from dining/airlines easily justifies an AMEX Green (and I can use Clear, and already enrolled, since the government already has my biometrics thanks to NEXUS and Global Entry. The LoungeBuddy credit is more "eh" but I'll probably use it at some point). The AMEX Hilton is a $0 AF interim step while I prove to AMEX they should give me the shiny.

In terms of proving: it's really just about what's in your profile. Proving is the long way but the instant way for them to fall in love with you is really just cleaning up your profile (if it's got stuff they don't like).

They'll never really love you unless that happens.

I was 660 / 671 Experian for about 6 months. Perfect payment on Delta Gold and PiF few times a month and they did not care...

I went full assault on my credit reports from all sides and got them cleaned up

My score increased from that to 764 - magically after a week all cards across the board were showing pre-approved.

Moral of the story; they'll never really love you until you love your CR.

Re: Basic math for AMEX AF

Brian_Earl_Spilner — Tue, 28 Apr 2020 19:11:53 GMT

1 MR = $0.60 cashed out

To offset the AF with bare minimum spend, you would have to charge $41,670

Spending only on grocery and restaurant, which is what it's designed for, requires $10,417.50

Using the Uber credits every month, multiply those totals by 0.58

Not gonna bother with airline credit because almost nobody uses it all, especially if they have a partner card that takes care of luggage.

Obviously, transferring them is the best value and dependant on who and where.

Re: Basic math for AMEX AF

notmyrealname23 — Tue, 28 Apr 2020 19:12:29 GMT

@Anonymous wrote:
. Proving is the long way but the instant way for them to fall in love with you is really just cleaning up your profile (if it's got stuff they don't like).

It is literally the long way because a) I have a Chapter 13 full discharge as paid that won't fall off until January 2021 (I can do some early expungements but that clock doesn't start until this July) and b) AMEX was involved in the Chapter 13 and only got 50 cents on the dollar (and they were owed a crooked digit five figure sum). Getting accepted back by them in Q1 for a charge card and a credit card without paying back and going through an Optima (spoiler: I was NEVER going to give them that other 50%, too many fish in the sea) was very much a "I didn't expect that" experience.

There isn't actually much I can do here except pay the bills and demonstrate I'm doing a good job of managing CLs while the clock ticks down; to be very honest I'm pretty close to a set of cards I can live with long term.

Re: Basic math for AMEX AF

notmyrealname23 — Tue, 28 Apr 2020 19:26:47 GMT

@Brian_Earl_Spilner wrote:

Not gonna bother with airline credit because almost nobody uses it all, especially if they have a partner card that takes care of luggage.

I don't check luggage if I can avoid it (and I also fly airlines where I wouldn't pay to check luggage), and also I mostly fly Southwest (no fees) or Alaska (status, would get free luggage and decent seating) or Delta (no status, but cheap tickets) on cheap tickets all the time; many many reports online that you get refunded if you use an AMEX + GC for partial payment where the AMEX component is well under $100 (or even 100% reimbursement if the AMEX component is under $100). You can't buy gift cards but that's fine.

Worst case if AMEX tightened that up I'll be buying some $15 EarlyBird checkins/WiFi on Southwest or some Delta/Alaska misc. fees (stuff like change of flight on day of flight, etc.). I don't plan on doing any stupid AMEX tricks like merchant refunding charges... travel credit if I have to change a flight is fine.

Also... don't value AMEX at .6 but I've been flying in premium cabins on awards (or know how to cash out miles at 2+ cpm) for a pretty long time.

Re: Basic math for AMEX AF

Brian_Earl_Spilner — Tue, 28 Apr 2020 19:26:54 GMT

@notmyrealname23 wrote:
@Brian_Earl_Spilner wrote:

Not gonna bother with airline credit because almost nobody uses it all, especially if they have a partner card that takes care of luggage.

I don't check luggage if I can avoid it (and I also fly airlines where I wouldn't pay to check luggage), and also I mostly fly Southwest (no fees) or Alaska (status, would get free luggage and decent seating) or Delta (no status, but cheap tickets) on cheap tickets all the time; many many reports online that you get refunded if you use an AMEX + GC for partial payment where the AMEX component is well under $100 (or even 100% reimbursement if the AMEX component is under $100). You can't buy gift cards but that's fine.

Worst case if AMEX tightened that up I'll be buying some $15 EarlyBird checkins/WiFi on Southwest or some Delta/Alaska misc. fees (stuff like change of flight on day of flight, etc.). I don't plan on doing any stupid AMEX tricks like merchant refunding charges... travel credit if I have to change a flight is fine.

That loophole has been shut down. So, for me, it's wifi and drinks

Re: Basic math for AMEX AF

Brian_Earl_Spilner — Tue, 28 Apr 2020 19:29:43 GMT

@notmyrealname23 he asked for basic amex math, not how to maximize his rewards to offset the fee. I posted the minimum spend to offset the AF at 1x, 4x, and if he used all of his dining credits.