Basic math for AMEX AF

[Anonymous]

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

[MudkipsRKooL]

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.

[dragontears]

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@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

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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

[GmbH]

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

[Anonymous]

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@dragontears wrote:

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@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

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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

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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.

[Remedios]

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 

[kdm31091]

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@GmbH wrote:

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

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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.

[Anonymous]

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. 

[kdm31091]

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@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. 

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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.

[Anonymous]

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.