topic Re: Amex Gold Card? Help me understand why people love this card. in Credit Cards

Amex Gold Card? Help me understand why people love this card.

risingup2day — Sun, 07 Feb 2021 04:42:32 GMT

Good evening Fico Fam!

So... as the title states, " Amex Gold card.. Why does everyone love this card?
I look at this card and not really impressed. Now maybe I'm just ignorant or just not seeing the "true" benefit of this card. Let's not mention the annual fee weighing in at a $250 dollars!

I use my Sam's club MC for gas purchases at 5% (didn't ever hit the $6k Max annual spending limit on this so not concerned) I also plan on using now at Sam's since they announced the 2% Cash back for being plus member, please tack on an additional 3% , making it now 5%CB! Thank you, Synchrony! I'll cash in! IMO this is a game changer and destroys the thought I was having of opening up a Costco membership and applying for the Costco anywhere card. Let's be honest, I think Synchrony/Sam's club just 💩 on Costco. Not too mention, the scan and go! Bye bye lines!

Sorry, I digress... I don't travel, so nothing lost there... I see the sub and think, "Nice" but it doesn't warrant a trigger pull atleast for me... but I just dont see the love affair people have with it. So please chime in and talk me down the ledge or give me the push I need to apply!!! I do want to apply because of the Rose gold card lol... I know a silly/stupid/crazy reason to apply.

Thanks for your time!

Re: Amex Gold Card? Help me understand why people love this card.

FinStar — Sun, 07 Feb 2021 05:58:00 GMT

I have the card and enjoy many of its benefits, especially the MR ecosystem. I also have Sam's Club, but the comparisons are apples to oranges. I'll let others enlighten you with their reasons as each product has its pros/cons and not all will be a fit for everyone.

One quick PSA - any discussions that deviate into the aesthetics of the recently reintroduced version of the Gold Card will end up being moved to Smorgasboard. So, please keep the discussions on topic.

Re: Amex Gold Card? Help me understand why people love this card.

risingup2day — Sun, 07 Feb 2021 05:33:21 GMT

Hello FinStar,

MR ecosystem? Can you enlighten me on this? I mean if one spends a lot in the higher categories, this would make up for the annual fee. Maybe once I get I better understanding on how this system works... I can crunch numbers to see if I can benefit more vs my current set up or maybe uncover something that I am overlooking.

Thanks!

Re: Amex Gold Card? Help me understand why people love this card.

dogmeat — Sun, 07 Feb 2021 05:41:50 GMT

For 99% of people, if you don't travel, don't get an MR-earning card. I think that is a simple rule that likely applies to you.

If you do travel, and want to play travel-with-MR, the Gold card is primarily a (non-warehouse/superstore) grocery & dining card, that requires a minimum amount of spend in those specific categories to offset the annual fee, over a lower-earning card. It's just math.

If you don't travel, don't dine out, and don't shop for non-warehouse/superstore groceries, there is practically no reason for you to consider this card. The more you do (and $pend on) those things, the more appealing the card becomes.

Re: Amex Gold Card? Help me understand why people love this card.

Gunnerboy — Sun, 07 Feb 2021 05:55:00 GMT

Someone please correct me if my calculations/assumptions are off.

OP, its not that difficult to get positive-expected-value out of this card, due to the 4x dining/grocery rewards setup. Going by the website upgradedpoints.com, the current Gold Card SUB of 60,000 points (valued at 2.2 cents per point) is worth $1,320 when redeemed thru a travel-partner. That's more than five-times the value of the $250 AF.

$250 = 11,364 MR points.

For the second year, offsetting the $250 AF can be achieved by spending $2,841 on 4x earning transactions (11,364pts) for the entire year.

Re: Amex Gold Card? Help me understand why people love this card.

Remedios — Sun, 07 Feb 2021 05:58:16 GMT

@Gunnerboy wrote:
Someone please correct me if my calculations/assumptions are off.

OP, its not that difficult to get positive-expected-value out of this card, due to the 4x dining/grocery rewards setup. Going by the website upgradedpoints.com, the current Gold Card SUB of 60,000 points (valued at 2.2 cents per point) is worth $1,320 when redeemed thru a travel-partner. That's more than five-times the value of the $250 AF.

$250 = 11,364 MR points.

For the second year, offsetting the $250 AF can be achieved by spending $2,841 on 4x earning transactions (11,364pts) for the entire year.

Your assumption is off, but only because OP already stated they don't travel, any travel redemption can be taken out of the equation.

Re: Amex Gold Card? Help me understand why people love this card.

risingup2day — Sun, 07 Feb 2021 06:04:57 GMT

So end result is;

because I don't travel and only shop at groceries store for smaller items, eating out is an option but based off my usage, I would not really benefit from this card. I appreciate the feedback from all.

Re: Amex Gold Card? Help me understand why people love this card.

K-in-Boston — Sun, 07 Feb 2021 07:46:07 GMT

Without any travel whatsoever, the card can be very difficult to justify. For those that do and can make use of the Membership Rewards ecosystem, it can be one of the absolute best cards on the market. A common topic that comes up here is "If you could only have 3 cards..." and this one always gets a spot for me.

If one can utilize the $10 monthly dining credit and the new $10 monthly Uber/UberEats credit, the net annual fee is only $10. Add in the $100 travel credit (going away February 2022), and the net annual fee is -$90 for those that can use all of the credits. That does not even factor is the many Amex Offers that can be taken advantage of for further savings.

As a non-traveler, that remaining $10 may still be difficult to justify over another card. Earning 4x on groceries and dining would be 2.4% cash back if redeemed as statement credit, 2.8% cash back if redeemed at checkout at Amazon, Best Buy, Walmart, etc., and up to 4% if redeemed for a limited selection of gift cards (most will be closer to the previous two values, but some cards such as Home Depot are often 1 cent per point making it 4% back effectively). Factoring in a healthy Welcome Offer, even these non-travel redemptions can still make the card lucrative for a while, but would likely not make sense long term.

As for why many of us love the card, the annual fee is either negligible or less than zero after credits are considered and the ability to rack up lots of points is fantastic. Since I also have the Business Platinum card from Amex (which gives a rebate on points used for all business/first class tickets and all tickets regardless of cabin on your chosen airline when used to purchase airfare in Amex Travel), my worst case scenario is that I am earning 6.16% back on fairly substantial grocery and dining spend when redeemed for airfare through the Amex Travel portal. Moving these points to frequent flyer accounts can make them net 8% or potentially even much more.

Re: Amex Gold Card? Help me understand why people love this card.

kdm31091 — Sun, 07 Feb 2021 15:35:09 GMT

@Gunnerboy wrote:

For the second year, offsetting the $250 AF can be achieved by spending $2,841 on 4x earning transactions (11,364pts) for the entire year.

Problem with this type of math is that it assumes you would otherwise earn no rewards on the spend. You need to compare it to no fee options available to figure out the real breakeven point.

Re: Amex Gold Card? Help me understand why people love this card.

Taurus22 — Sun, 07 Feb 2021 15:52:36 GMT

I somewhat agree with the OP's perspective on this and have pondered this myself for a while. While I understand that there are poeple out there that do A LOT of travelling and, likewise, a lot of dining that may accompany that.....most people justify the card by math, stating that the AF is "offset" by the amount of spend they put on the card.

But for most people like myself, the entire point of cashback cards is to get as close to a true 4%, 5% etc. return on what we spend, or more if possible. But I'm also considering that people "like myself" would also be those with a modest income (ex. $75k and below) and simply don't have that type of spend. If you spend enough to simply offest the AF and maybe gain a little on top, then realistically maybe you're achieving a gross cashback return of let's say (and I'm pulling a random # here for example) maybe 6-7%. But after "offsetting" the AF your true cashback retun might be about 2-3% after the fact. And again, that is for "more than average" spend, so the average consumer wouldn't really benefit. Seems that these cards with $250+ AF are targetted more for those who travel much, much more than average and for those with much higher incomes.

For the average consumer I don't see how this card could ever beat a mix of 3- 5% cashback cards, the math just isn't there for most of us, and the AF defeats the purpose of the cashback gains.

Re: Amex Gold Card? Help me understand why people love this card.

Aim_High — Sun, 07 Feb 2021 16:04:15 GMT

Great answers upthread and I especially thought @dogmeat and @K-in-Boston's responses were spot-on.

In general cards with high AF don't make sense for a lot of people. You may be one of those people. For others, they can be worthwhile based on your lifestyle, spending, and ability to use all the features and benefits of the card.

Cards that earn points and miles like the Gold card will normally give you much better redemption value for travel. And if you don't travel, a cash back only system is probably much more simple and appropriate. Cash value of most travel card points is poor, especially combined with the AFs.

For people that carry it and use it wisely, the Gold card is not a $250 hole-in-your pocket. As with any of these cards, being able to use the credits against the AF organically with your normal spending is a key part of making the card carry its' weight. Some high-AF cards won't ever give you very good credits back against the AF but the Gold card isn't one of them. As outlined by @K-in-Boston, the credits can make the AF almost negligible (if not even negative - cash in your pocket) if well used. The second part of optimizing value is that ability to get higher returns when redeeming MRs for travel.

Everybody eats, whether at home or at restaurants. With the card paying 4x MRs on both dining out and groceries (at non-discount and non-warehouse stores), and with MRs value for travel at somewhere between 1 and 2 ccp, depending on redemption, you're potentially earning somewhere between 4% and 8% for travel. Compared to most cash back cards that may pay effective rates of 3% to 4% on those categories, the Gold starts to pull ahead pretty quickly with enough spending, even with an AF. The Gold can outearn the AMEX Blue Cash Preferred card's 6% on groceries since BCP has a $95 AF that is not offset with any credits like are available on the Gold. Before you add in the value of selected streaming services which also pay at 6%, the BCP's earning rate drops to a maximum of 4.4% if you spend exactly $6K on groceries after accounting for the AF. Meanwhile, the Gold can outearn that rate easily plus the cap on grocery spending is a much more useful $25K. The $6K on BCP works out to only $115 in weekly grocery spending which is far below what many households spend. But your ability to get that value again depends on whether you'll be able to redeem points for travel instead of cash.

The Gold card also comes with some other good benefits than can increase perceived value of the card:

Extended Warranty protection (Add 1 year to manufacturer warranties of 5 years or less; Maximum of $10K per purchase and up to $50K per year.)
Purchase Protection (Covers purchases that are accidentally damaged, stolen, or lost for up to 90 days.)
Travel protections and perks (lost baggage, trip delay, secondary rental car CDW, Global Assist Hotline, and more.)

Re: Amex Gold Card? Help me understand why people love this card.

CreditCrusader — Sun, 07 Feb 2021 16:11:04 GMT

Let us also not forget the AMEX prestige factor, which eludes me but others find appealing.

Perhaps the enduring reality is this: Not all credit cards are for everyone. Which ones you opt for (credit worthiness assumed) is really just a matter of matching features with benefits. That sounds over-simplistic, but it's true.

Re: Amex Gold Card? Help me understand why people love this card.

Getty59 — Sun, 07 Feb 2021 16:16:48 GMT

@Taurus22 wrote:
I somewhat agree with the OP's perspective on this and have pondered this myself for a while. While I understand that there are poeple out there that do A LOT of travelling and, likewise, a lot of dining that may accompany that.....most people justify the card by math, stating that the AF is "offset" by the amount of spend they put on the card.
But for most people like myself, the entire point of cashback cards is to get as close to a true 4%, 5% etc. return on what we spend, or more if possible. But I'm also considering that people "like myself" would also be those with a modest income (ex. $75k and below) and simply don't have that type of spend. If you spend enough to simply offest the AF and maybe gain a little on top, then realistically maybe you're achieving a gross cashback return of let's say (and I'm pulling a random # here for example) maybe 6-7%. But after "offsetting" the AF your true cashback retun might be about 2-3% after the fact. And again, that is for "more than average" spend, so the average consumer wouldn't really benefit. Seems that these cards with $250+ AF are targetted more for those who travel much, much more than average and for those with much higher incomes.

For the average consumer I don't see how this card could ever beat a mix of 3- 5% cashback cards, the math just isn't there for most of us, and the AF defeats the purpose of the cashback gains.

Re: Amex Gold Card? Help me understand why people love this card.

Anonymous — Sun, 07 Feb 2021 17:50:56 GMT

@CreditCrusader wrote:

Let us also not forget the AMEX prestige factor, which eludes me but others find appealing.

Perhaps the enduring reality is this: Not all credit cards are for everyone. Which ones you opt for (credit worthiness assumed) is really just a matter of matching features with benefits. That sounds over-simplistic, but it's true.

I agree, that was my first reaction. There is no reason to assume any particular card should be a fit for your needs, until you do an analysis based on your spends and needs vs what that card offers.

I understand that if a card appears very popular, then you might question if you are missing anything (and you might be, hence the need for the analysis!) but the card might be popular among those with very different needs and spends from you.

Lastly, forums like this sometimes get caught up in Flavor of the Month stuff. Sometimes (I would nominate AOD as an example) the card is a good choice for the majority of people, othertimes ([insert your example here]) not so much.

And with the mentioned "prestige" factor, a lot of people new to the game get attracted to Amex MR card and apply. With the charge cards being fairly easy to get, we then see messages about how do you redeem these things! If not travelling, or cashing out with the CS Plat, getting good value is hard.

Re: Amex Gold Card? Help me understand why people love this card.

SouthJamaica — Sun, 07 Feb 2021 17:57:19 GMT

@risingup2day wrote:
Good evening Fico Fam!

So... as the title states, " Amex Gold card.. Why does everyone love this card?
I look at this card and not really impressed. Now maybe I'm just ignorant or just not seeing the "true" benefit of this card. Let's not mention the annual fee weighing in at a $250 dollars!

I use my Sam's club MC for gas purchases at 5% (didn't ever hit the $6k Max annual spending limit on this so not concerned) I also plan on using now at Sam's since they announced the 2% Cash back for being plus member, please tack on an additional 3% , making it now 5%CB! Thank you, Synchrony! I'll cash in! IMO this is a game changer and destroys the thought I was having of opening up a Costco membership and applying for the Costco anywhere card. Let's be honest, I think Synchrony/Sam's club just 💩 on Costco. Not too mention, the scan and go! Bye bye lines!

Sorry, I digress... I don't travel, so nothing lost there... I see the sub and think, "Nice" but it doesn't warrant a trigger pull atleast for me... but I just dont see the love affair people have with it. So please chime in and talk me down the ledge or give me the push I need to apply!!! I do want to apply because of the Rose gold card lol... I know a silly/stupid/crazy reason to apply.

Thanks for your time!

I used to have the card and then ditched it.

I found myself constantly struggling to offset the $250 annual fee. (E.g., eating at Shake Shack even though I didn't want to; ordering through Grub Hub until I found out they were siphoning off 25% of the meal price from the restaurants; etc.)

That, combined with the uncertainty of not knowing one's credit limit, caused me to close it. (I had a $3000 charge of a veterinarian's bill flat out DECLINED because I hadn't spent that much on the card before).

Re: Amex Gold Card? Help me understand why people love this card.

dogmeat — Sun, 07 Feb 2021 21:16:26 GMT

For the average consumer I don't see how this card could ever beat a mix of 3- 5% cashback cards, the math just isn't there for most of us, and the AF defeats the purpose of the cashback gains.

Is $11600/yr average or what most people spend in those categories? I don't know, but it doesn't seem like a crazy big number to me, especially for a family of 3+.

At @K-in-Boston's MR redemption rate for flights (1.54c/MR), he barely beats a 4% CB card at $11600 in annual category spend on the Gold, net annual fee. For every dollar of category spend (or redemption rate) above that, the spread over a CB card improves.

For this to work, @K must redeem at least 46,400 MR (points earned on spend, above) annually for travel at the redemption rate above (a $-value of ~$715), or redeem fewer points at a better rate. Points convert to "$-value" at the time of redemption, so if you're not redeeming at least once a year, the "annual" fee in the table above goes up accordingly.

This ignores all credits/offers/benefits/prestige associated with the Gold intentionally for simplicity. Based on my definition of "a lot" in this context, not a lot of annual spend or travel is required. A fair amount of spend, and one or two flights a year.

Re: Amex Gold Card? Help me understand why people love this card.

K-in-Boston — Sun, 07 Feb 2021 21:45:31 GMT

@dogmeat wrote:
For the average consumer I don't see how this card could ever beat a mix of 3- 5% cashback cards, the math just isn't there for most of us, and the AF defeats the purpose of the cashback gains.
Is $11600/yr average or what most people spend in those categories? I don't know, but it doesn't seem like a crazy big number to me, especially for a family of 3+.

At @K-in-Boston's MR redemption rate for flights (1.54c/MR), he barely beats a 4% CB card at $11600 in annual category spend on the Gold, net annual fee. For every dollar of category spend (or redemption rate) above that, the spread over a CB card improves.

For this to work, @K must redeem at least 46,400 MR (points earned on spend, above) annually for travel at the redemption rate above (a $-value of ~$715 -- or redeem fewer points at a better rate). Points convert to "$-value" at the time of redemption, so if you're not redeeming at least once a year, the "annual" fee in the table above goes up accordingly.

This ignores all credits/offers/benefits/prestige associated with the Gold intentionally for simplicity. Based on my definition of "a lot" in this context, not a lot of annual spend or travel is required. A fair amount of spend, and one or two flights a year.

While I understand what you're saying here, there are a few things to consider. After the credits and Amex Offers, the net annual fee for me on Gold is below zero - while you mentioned that was ignored, it's relevant in my case. When redeeming the points, I am also accruing frequent flyer miles which for me adds an additional minimum of 0.72% back for every dollar spent on restaurants and groceries on the card, bringing me up to 6.88% back on that spend when redeemed for travel.

Also the 1.54 cpp worst case redemption is based on one rebate to simplify things. As the rebate is actually an endless loop (those points that come back will again result in a rebate when used), the actual value of redeeming for airfare through Amex Travel this way repeatedly ends up being 2.17¢ cpp, which now that I think about it, I probably should start using that figure since it's really more accurate. Just doing 4 rebates for example on $1000 of airfare the first time with 100,000 MRs... I get back 35000 MRs, then when I use those 35000 I get back 12250, then when I use those 12250 I get back 4288, then when I use those 4288 I get back 1500. It continues on for many more iterations but the value isn't changed much past 4 because we're talking hundreds, tens, or single MRs. But if we take this more accurate figure of 2.17 and multiply it by 4x earnings on restaurants and grocery, that's 8.67% back (there are some decimals rounded on both). Now add the frequent flyer miles earned above and I'm at 9.39% net back for every dollar of grocery and restaurant spend.

I am seriously kicking myself for not getting Business Platinum earlier. 😂

Re: Amex Gold Card? Help me understand why people love this card.

CaptJOB — Sun, 07 Feb 2021 21:56:41 GMT

I'll throw in the extreme example of how MRs can do things cash back can't(as mentioned before though this requires that you like travelling and are willing to put in the work on finding the best redeemable points program for a trip).

If you spend $37,500 in bonus category spend on the Gold card you'll get 150k MRs which can be transferred to ANA for a roundtrip first class flight to Japan that usually costs around $15,000. No cash back card will ever give you that kind of return. Like I said, an extreme example but it's one of the reasons regular people like getting into MRs. I've personally redeemed 220k Virgin points for two of these tickets and I can say it was worth it.

Re: Amex Gold Card? Help me understand why people love this card.

notmyrealname23 — Mon, 08 Feb 2021 00:34:28 GMT

@CaptJOB wrote:
I'll throw in the extreme example of how MRs can do things cash back can't(as mentioned before though this requires that you like travelling and are willing to put in the work on finding the best redeemable points program for a trip).

If you spend $37,500 in bonus category spend on the Gold card you'll get 150k MRs which can be transferred to ANA for a roundtrip first class flight to Japan that usually costs around $15,000. No cash back card will ever give you that kind of return. Like I said, an extreme example but it's one of the reasons regular people like getting into MRs. I've personally redeemed 220k Virgin points for two of these tickets and I can say it was worth it.

Yeah, this is the easy explanation. I'm going to finance a 6 week round the world trip with credit card point and miles in 2022 that would be some large five digit number were I doing this with cash. There's no way getting 5% back at Sam's Club would make this possible.

I totally get why someone who a) doesn't travel and b) has good 2-5% no annual fee cashback options isn't interested in slicing off anywhere from $150-550 off the top for annual fees (even if there are potential kickbacks from Uber, or whatever). If that describes you, AMEX's MR system isn't for you.

But for me, AMEX Green and Gold are something like 5-8% cashback cards in categories I spend good money in. That plus AMEX offers plus SUBs plus the AMEX hotel cards are going to yield a lot of results by the time I take that trip in summer 2022.

Re: Amex Gold Card? Help me understand why people love this card.

jdbkiang — Mon, 08 Feb 2021 00:55:04 GMT

There are also a small subset of people who use BBP/Gold/Schwab Plat for cashback purposes.

2.5% up to 50K in spend

5% for groceries+restaurants

6.25% on flights and hotels

I wouldn't ever do this, personally, as I do travel, but if people can offset the AF's with the benefits, they certainly can use their fancy metal cards for cashback.