American Express – Are Elite Credit Cards Worth It?
Elite credit cards tend to have a “fancy” look and feel, but they also come with more than their share of benefits. In fact, the most exclusive credit cards often come with perks like airport lounge access, annual travel credits and elite status with rental car and hotel brands. Some also come with insanely generous bonus offers worth $1,000 or more while giving consumers the chance to earn tons of points or miles for each dollar they spend.
As always, there’s a catch. Elite credit cards charge pricey annual fees, and those fees can be hard to justify if you rarely take advantage of the cardholder benefits. Still, most elite credit cards can be well worth the cost for the right consumer. You just need to decide which elite benefits you want access to, as well as the type of rewards you want to earn.
Reasons to pick up an elite credit card
Exclusive travel perks
For the most part, elite credit cards are geared to consumers who travel or plan to travel in the near future. This is based on the exclusive perks elite cards tend to offer, including hotel status, airport lounge membership, credits for checked baggage and in-flight meals, travel concierge service and more.
Take the Platinum Card® from American Express, for example, which is currently offering 75,000 American Express Membership Rewards points when you spend just $5,000 within six months of account opening. This elite credit card does have a $550 annual fee, but you get benefits like automatic Gold Elite and Gold status with the Marriott Bonvoy and Hilton Honors programs, respectively. You also get a $200 airline fee credit each year with a select airline, up to $200 in Uber credits ($15 per month, plus an extra $20 in December), Priority Pass airport lounge membership, entry into Centurion lounges and Delta Sky Clubs when you fly with Delta and a fee credit for Global Entry or TSA Precheck every four years. You’ll also get access to the American Express Platinum concierge, which can help you arrange transportation, book restaurant reservations, get tickets to events and more.
When you look at the value of these benefits, it’s easy to see why someone who travels often would sign up. After all, Priority Pass airport lounge membership retails for $429 on its own, and you also get a slew of other travel perks worth hundreds.
Big welcome offers
Also, keep first-year rewards in mind since, as we mentioned, the Platinum Card from American Express is offering an initial welcome bonus of 75,000 points. Since points in the American Express Membership Rewards program are worth approximately 2 cents each when redeemed with partners for premium travel, this bonus could easily be worth $1,500.
Access to special events
For example, with the Chase Sapphire Reserve®, you can qualify for Sapphire Dining experiences, such as takeout from Michelin-rated eateries and virtual culinary experiences. Of course, the Chase Sapphire Reserve® also offers plenty of elite benefits in exchange for its $550 annual fee. As a cardholder, you’ll get a $300 annual travel credit, Priority Pass airport lounge membership, elite rental car benefits, a credit for Global Entry or TSA Precheck membership and the most elaborate suite of travel insurance benefits of any travel credit card on the market today.
Some elite credit cards also aim to help you look more established and successful. For example, the Mastercard® Black Card™ promises the heftiest card weight among all metal credit cards. According to the advertising materials, the Mastercard Black Card weighs 22 grams compared to just 18 grams with the Amex Platinum and 13 grams with the Chase Sapphire Reserve. Meanwhile, the Mastercard Black Card also comes with elite perks in exchange for its $495 annual fee—a 24/7 luxury travel concierge, a 2 percent redemption rate for airfare and Priority Pass airport lounge access, to name a few.
Downsides of elite credit cards
Significant annual fees
The biggest disadvantage of elite credit cards is the cost required to carry one. Most elite credit cards charge annual fees of $450 per year or more, with several popular options collecting annual fees over $500. In the world of ultrarare exclusive credit cards, you’ll even find options like the Centurion Card from American Express, which reportedly features a $10,000 initiation fee and a $5,000 annual fee.
Fine print on perks
Also, note that, in some cases, elite credit card perks can be difficult to use. For example, the $200 airline fee credit that comes with the Amex Platinum is only good for one airline you select ahead of time and only for “incidental” travel expenses, like checked luggage and in-flight meals. Further, the $200 in Uber credits this card offers are doled out on a monthly basis, and unused credits from one month do not roll over to the next.
Higher APRs and fewer intro rates
Finally, elite credit cards tend to charge high APRs and they rarely ever offer introductory rates for purchases or balance transfers. This makes them a poor option if you need to carry a balance from time to time.
How to pick an elite credit card
If you’re thinking of getting an elite credit card despite the high annual fee, you’ll be better off if you take the time to compare the top credit cards on the market today. These tips can help you narrow down your options.
Determine which elite perks you could use the most
As you compare exclusive credit cards with lots of benefits, ask yourself which perks you could actually use. If you travel often, then airline credits and airport lounge access could be worth pursuing. If you want access to a travel concierge service or travel insurance benefits, then compare elite cards that offer the best options in this realm.
Decide on the type of rewards you want to earn
Most elite credit cards let you earn flexible travel points you can use in more than one way. Take a close look at Citi ThankYou Rewards, Amex Membership Rewards and Chase Ultimate Rewards to see how you can redeem your points and which airline and hotel partners they can transfer to.
Look for benefits that align with existing travel plans
Maybe you already have existing travel plans for the next year, such as an extended stay with a specific hotel brand or several different trips that require a rental car. In that case, you should look for rewards credit cards that have related perks like automatic hotel or rental car elite status.
Compare welcome bonuses among the top cards
Finally, make sure you take a look at elite cards and compare their initial welcome bonus offers. Even if you have to pay a high annual fee, the first-year bonus can more than make up for it—if you can meet the minimum spending requirement through regular, organic spending.
Alternatives to elite credit cards
Elite credit cards can seem like a good deal at first, but it’s possible you just can’t stomach paying $450 or more for a credit card each year. In that case, you’ll be happy to know there are plenty of travel credit cards with reasonable annual fees—or no annual fee.
Take the time to compare all the best credit cards on the market today, including general rewards credit cards and cash back credit cards. It’s definitely possible to score a huge sign-up bonus and earn plenty of ongoing rewards without paying for the privilege—and without forgoing the benefits you really want.
Tag: American Express