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We need to talk. A recent trend has left me re-think whether I should stay loyal to Amex credit cards. May be have just a couple of them and trim down my stack. Why? Because it has been a slow moving train wreck of credit card devaluations. I call it Amex’s one-two punch.

One one hand, increase annual fees (by well over 100% in certain cases). On the other hand, add credits that are really difficult to use and structure them in a way that’s really difficult to track for the average person.

Credit Card Devaluations – What defines loyalty?

In previous posts, I’ve written about what defines loyalty. Your loyalty is defined based on the following parameters:

  • The brand is your primary choice for a purchase category
  • The brand enjoys higher share of wallet and top of mind awareness as you start thinking about making a purchase
  • You expect short and long term rebates/returns in exchange of being a loyal customer. In return, you continue to give the brand primary preference while making a transaction.

Amex’s Devaluations

We’ve seen the word coupon book being thrown around off late. While I shrugged it off first, it’s now become a complete annoyance. Let me explain how it messes up loyalty and has made me think about trimming the number of Amex credit cards that I have.

Confusing Credits

So what exactly is this coupon book stuff? Why is it annoying? I find it annoying because it is forcing me to choose Brand X over Brand Y. Previously, I used to choose category A over category B.

Let’s take the example of the Amex Gold card. The card is marketed a a go to card for dining and travel. I love both travel and dining. However, the Amex Gold card just doesn’t make sense to me any more since I have to purchase one of these brands.

Participating partners are Grubhub (including Seamless), The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar, and select Shake Shack locations

The Platinum Card makes things even worse. It has a monthly credit (Uber, Walmart), bi-annual credit (Saks) and annual credits (airline, FHR and more). A card that’s marketed as a premium travel and lifestyle card has a Walmart credit. Go figure!

Then there’s the Business Platinum card with a bi-annual Dell credit, quarterly Indeed credit and annual airline fee credit and Adobe credit. The value proposition is muddled with multiple brands and time frames.

Tail wagging the dog

Now you may say, “but Ashish! I found something worth buying on the Saks website.” I’d say, “Good for you”. But that’s exactly what my pinned tweet says. It’s the tail wagging the dog. You’re altering your brand preference and then justifying why it was a good deal. A simple category bonus or rebate makes things easy for the consumer.

Let’s take the example of the travel credit on the Chase Sapphire Reserve card. It’s once a year, it works on all travel purchases and it’s easy to use. You don’t have to jump through hoops or prefer one airline or hotel over another.

Amex doesn’t let you do that any more. While it keeps increasing annual fees and adds restrictions on welcome bonuses, it keeps devaluing the core value proposition while chasing breakage. I’ve been a loyal customer for 14 years, but hey, look at this chart. I considering seriously trimming this down.

Card Name Year I first opened the card Annual Fee when I opened the card Annual Fee Now Percentage Increase in annual fee between then and now
Amex Platinum Card 2014 $450 $695 55%
Business Platinum Card 2017 $450 $695 55%
Hilton Aspire Card 2018 $450 $550 23%
Blue Business Plus 2018 $0 $0 0%
Hilton Business Card 2019 $95 $195 105%
Business Gold Card 2019 $295 $375 27%

What does your chart look like?

It can be done

American Express has already demonstrated that they can do simple credits by category instead of merchant. It’s not something outlandish or unusual. It’s just the way Amex is choosing to move forward. As a loyal customer, I’m planning on reacting accordingly to the changes.

  • Amex offers a simple $50 airline credit each quarter with the Hilton Aspire card that works on flights with any airline in the world
  • Amex offers a simple $25 dining credit each month with the Marriott Bonvoy Brilliant card that works for dining purchases worldwide

The Pundit’s Mantra

If you have more than one Amex credit card, then I’d suggest you also make a chart like the one above and ask yourself the following questions.

  • I earn credits or rebates for purchasing Amex’s partner brands. In how many cases have I switched the brand simply to use the credit?
  • How many of these brands are overpriced? Am I spending more under the illusion that the ‘credit’ makes the purchase look notionally cheaper?
  • Are the annual fees and credits getting way too complex where I’m not able to use all of them and leaving money on the table?

If your answers to these questions are yes, then for you, jus like I am, this may be the time to re-consider your loyalty. At the moment, when an Amex card comes up for renewal, I’m finding it increasing difficult to say yes. Obviously, I can understand that Amex has their own business reasons to do what they’re doing, but I’m looking out for myself and looking to fine tune my travel credit card strategy accordingly.

Never thought I would say this, but Amex’s tactics have meant that the Blue Business Plus is now my favorite Amex card! No confusing credits, no annual fee, no BS and you can also transfer your points! Also, there’s always a chance that other issuers follow Amex’s playbook and “enhance” their products in a similar way. That’s what worries me, the potential of a race to the bottom.

How are Amex’s tactics influencing your travel credit card strategy? Tell us in the comments section.

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