topic Re: Amex gold card worth it? in Credit Cards

Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 03:48:16 GMT

I love dining out that it is probably the majority of my credit card spending. I have the chase freedom flex which gives 3% cash back on dining. I always PIF every month. My credit history is 6.5 years old with always PIF, never have paid any interest on credit cards, and no derogatory or late payments ever.

I have 6 hard inquiries on my experian report within the last year and 12 within the last 2 years (mortgage rate shopping), 761 fico 8 with experian, 6 new accounts in the last year (5 credit cards and 1 mortgage). Last HP and new account was about 4 months ago.

I use door dash and grub hub on a regular basis. The gold card has a $250 annual fee but offers up to $240 in credits that I would easily use without any effort which would effectively make the annual fee $10 for me.

I read it gets 4x points on dining and grocery stores. Does that mean 4% cash back? What are my redemption options and which redemption options give the most rewards?

I used the Amex pre qualification tool and I am pre approved/qualified for the gold card.

Would this card be more rewarding for me than my freedom flex that I currently use for dining?

Re: Amex gold card worth it?

Slabenstein — Thu, 15 Apr 2021 04:21:52 GMT

4x MR doesn't mean 4% cashback. I believe MR are worth 0.6 cpp when redeemed for statement credit, so if you use them in that way 4x MR would be about 2.4% cb. There are a lot of other ways to use them that come out at 1 cpp or more, but, to my knowledge, these are mostly travel-related. The MR pros on this board should be able to give you a more informative answer and let you know what the highest-value redemption options are. However, since you say you'd be able to recoup the Gold's AF, whether you'd get a better return on your dining spend from that card or your CFF would depend on how you could redeem the MR and whether that would get you an effective rewards rate of >3% for 4x MR. My own somewhat sketchy knowledge is due to the fact that our lifestyle wouldn't give us much opportunity to spend MR on anything other than statement credit, so MR-earning cards wouldn't be a good choice for us.

Re: Amex gold card worth it?

TampaBAY86 — Thu, 15 Apr 2021 12:04:01 GMT

OP, what kind of rewards are you interested in? Do you want to stick with just cash back, or are you interested in learning a rewards system?

Re: Amex gold card worth it?

FormerCollegeDJ — Thu, 15 Apr 2021 12:56:52 GMT

I think the answer @Slabenstein provided was pretty good (and as @TampaBAY86 noted, the real question is how do you like to use "rewards" - cash back, travel, gift cards, etc.). I'm not an expert regarding American Express Membership Rewards, but to my knowledge Amex MR points provide the greatest value when you transfer them to one of Amex's many airline partners for premium (i.e. first or business class) tickets on high cost flights, particularly international flights or places like Hawaii.

I want to note that if you value cash back and want to boost your dining rewards rate in a low cost or cost efficient manner, you should check out the US Bank Altitude Go Visa, a no annual fee card that offers 4% cash back on dining (and 2% cash back on a few other categories, plus offers an annual $15 streaming credit). It also offers a $200 sign up bonus with $1000 in spend over the first three months. There are two negatives with the card relative to the Chase Freedom Flex:

1) To my knowledge you can only get "cash back" as a statement credit (i.e. no direct deposit or check mailed to you) unless you have US Bank savings and/or checking accounts.

2) US Bank is sensitive to credit card approvals and typically does not approve cards to anyone regardless of credit score unless they have no more than one credit card approval in the last 12 months. From what I've read, other loan requests may also count towards the only one loan approval in the last 12 months rule.

In your case, #2 above would limit your ability to immediately apply for the US Bank Altitude Go, but it could be a worthwhile card for you down the line.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 15:52:07 GMT

I prefer cash back but i have read you can get 1 cent per point value if you redeem for certain give cards. That would be easy for me to do so considering that I would make full use of the $240 in credits you can get which would basically be a $10 annual fee for 4% cash back on dining and groceries. Do you think applying for or opening this card would spook my other accounts and cause them to get closed like how people on this site have had that happen?

Re: Amex gold card worth it?

FormerCollegeDJ — Thu, 15 Apr 2021 15:59:59 GMT

@rgd51 wrote:
I prefer cash back but i have read you can get 1 cent per point value if you redeem for certain give cards. That would be easy for me to do so considering that I would make full use of the $240 in credits you can get which would basically be a $10 annual fee for 4% cash back on dining and groceries. Do you think applying for or opening this card would spook my other accounts and cause them to get closed like how people on this site have had that happen?

I say do a little more research on the Amex Membership Rewards redemption options to better understand the point values for various kinds of redemptions and if you like what you see, go for it.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 16:03:04 GMT

Could getting this card spook my other lenders?

Re: Amex gold card worth it?

K-in-Boston — Thu, 15 Apr 2021 16:39:43 GMT

Others have given you some great answers. The easiest way to lay it out is that you would get 0.6 cents per point for statement credit, 0.7 cents per point when using points during checkout at select retailers (Amazon, Best Buy, Walmart, PayPal, maybe others), up to 1.0 cent per point for gift cards (electronic Home Depot certificates and some others are usually 1 cent but most are substantially lower), at least 1.0 cents when redeeming for travel in the Amex Travel portal, and typically much more than 1.0 cents when transferring points to an airline (or hotel, as long as the redemption makes sense) loyalty program.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 16:48:26 GMT

Yeah but would this spook my other lenders and cause them to close my accounts? I definitely can make use of the gift cards that do 1 cent per point which would make this a 4% cash back card on groceries and dining with an effective $10 annual fee. To me that is more value than the no AF altitude go card because that one only gives 2% back on groceries.

I am not a huge traveler but my girlfriend and I like to take frequent road trips and stay in reasonably priced hotels during said trips.

Re: Amex gold card worth it?

K-in-Boston — Thu, 15 Apr 2021 16:59:12 GMT

Worst case then you could always just book rooms with Amex Travel and be assured that you are getting at least 1 cent per point (or 4% back for restaurant and grocery purchases) if the gift cards don't work out for you. There are also frequently great Amex Offers that can pay off well also.

You mentioned reasonably priced hotels, so perhaps moving to a Marriott or Hilton account may stretch the points further. (I can get a lot more from Marriott for example (just redeemed a stay for 2.67 cents per point) but I am selective about when and where I use mine.)

As for spooking other lenders, that's really profile dependent and depends on who your lenders are. Some like Barclaycard and Chase may be a bit more prone to taking AA if a lot of new credit is acquired. With a clean and well-aged profile, the likelihood of that goes down. You did mention getting quite a few cards in the past year, so that could be seen as aggressive credit-seeking. Really up to you and your knowledge of your profile to make that risk assessment of whether 1 more could be the one that causes another lender to take a closer look.

Re: Amex gold card worth it?

TheBoondocks — Thu, 15 Apr 2021 16:58:09 GMT

@rgd51 wrote:
Yeah but would this spook my other lenders and cause them to close my accounts? I definitely can make use of the gift cards that do 1 cent per point which would make this a 4% cash back card on groceries and dining with an effective $10 annual fee. To me that is more value than the no AF altitude go card because that one only gives 2% back on groceries.

I am not a huge traveler but my girlfriend and I like to take frequent road trips and stay in reasonably priced hotels during said trips.

If you're going to get the gas card by fort knox, I heard they closed account due to new accounts but if you new accounts are over 2 years old, i dont see a reason for them to close it.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 17:04:14 GMT

My other cards are with chase, cap one, and target. If chase closed my flex i wouldn't be losing out that much since the dining rewards are lower than the gold car meaning I'd really just lose the 5% rotating categories. My cap one QS was opened about 4 months ago and that is the card i use for non category spend.

Is booking travel and rooms through Amex more expensive than booking with hotels directly?

Re: Amex gold card worth it?

TampaBAY86 — Thu, 15 Apr 2021 17:20:09 GMT

@rgd51 wrote:
My other cards are with chase, cap one, and target. If chase closed my flex i wouldn't be losing out that much since the dining rewards are lower than the gold car meaning I'd really just lose the 5% rotating categories. My cap one QS was opened about 4 months ago and that is the card i use for non category spend.

Is booking travel and rooms through Amex more expensive than booking with hotels directly?

In my experience, it varies widely. Sometimes best with point transfer, sometimes best through the portal and sometimes best with cash. You will likely need to look at dates, time of year, etc. when you want to take the trip.

As a follow up to what @K-in-Boston said before, do not count on gift cards getting a good value. I just checked and right now, and for me, there are around 6 of the 30ish available that are 1cpp. All of the others are significatly worse value.

For me, I find value in the card. I use the credits for Uber eats and Grubhub each month (lost out on most of the airfare credit last year, for obvious reasons) to keep the AF low. Even with what I consider my meager spending on the card, I have already earned over $50 and a few thousand MRs in Amex offers YTD. As a side note, I also have Rakuten set up for MRs for much of my online spending.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 17:26:52 GMT

Which gift cards provide 1 cent per point value? I know you said 6 of them currently do. I notice a lot of the travel partners are for 1st class plane tickets

Re: Amex gold card worth it?

TampaBAY86 — Thu, 15 Apr 2021 17:50:35 GMT

@rgd51 wrote:
Which gift cards provide 1 cent per point value? I know you said 6 of them currently do. I notice a lot of the travel partners are for 1st class plane tickets

Yes, transferring to airlines you will probably need to do higher fare classes for the best value. @K-in-Boston is an expert on Delta and can probably provide more information on that.

As for hotels, there are regularly promos for transfers. Right now I see both Marriott (1000 MR = 1400 Bonvoy) and Hilton (1000 MR = 2800 HH, normally 1000 MR = 2000 HH because of valuation).

To answer your gift card question, here are a few examples short of clicking through all of them again.

1cpp: 1800flowers, Gap Inc Brands, Darden Restaurants, Williams Sonoma Brands

.85 cpp are Apple, Bloomin Brands, Cheesecake Factory, Panera Bread, Macy's

.7cpp has Target, Starbucks, Hilton and Marriott

Amex gift cards are .5cpp (5000 MR for $25)

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 17:55:28 GMT

As long as I can get 1 cent per point then the card will be worth it to me. Do they typically always have enough credits that you can nearly offset the entire fee? I know it is a charge card so would I get hit with a new account for opening it? I have the sinclair charge card and it is hidden and doesn't report to the credit bureaus.

Re: Amex gold card worth it?

TampaBAY86 — Thu, 15 Apr 2021 18:11:28 GMT

@rgd51 wrote:
As long as I can get 1 cent per point then the card will be worth it to me. Do they typically always have enough credits that you can nearly offset the entire fee? I know it is a charge card so would I get hit with a new account for opening it? I have the sinclair charge card and it is hidden and doesn't report to the credit bureaus.

The credits for new applicants I believe total $240 provided you use the $10 each for Uber/Uber Eats and Grubhub monthly. I have had the card for a few years now, so I have the airfare promo as well, but that is going away at the end of this year.

You will likely get a HP for the application and it will report as a revolvor on the CRAs. It will not be counted as part of your utilization though.

Re: Amex gold card worth it?

K-in-Boston — Thu, 15 Apr 2021 18:25:26 GMT

The card will report as a credit card with 1 month terms, not revolving. Utilization is not factored in on modern credit scoring algorithms. The $120 dining (which includes Grubhub) and Uber credits are permanent. The $100 airline credit as mentioned is going away this year and will not be offered to new applicants now.

Will comment on travel in a bit.

Re: Amex gold card worth it?

rgd51 — Thu, 15 Apr 2021 18:37:43 GMT

I do lots of spend on dining out and groceries each month. Do you think it is likely chase would close my flex due to me opening another account? Is Amex pre approving me for the card make it likely I will be approved for it? Would my other lenders be less likely to take adverse action if a charge card rather than a credit card is opened?

Re: Amex gold card worth it?

coldfusion — Thu, 15 Apr 2021 18:42:02 GMT

@rgd51 wrote:
I do lots of spend on dining out and groceries each month. Do you think it is likely chase would close my flex due to me opening another account? Is Amex pre approving me for the card make it likely I will be approved for it? Would my other lenders be less likely to take adverse action if a charge card rather than a credit card is opened?

No. They don't typically get concerned about a single card being opened soon afterward.

Yes. Not 100% but approval is likely.

No.