The American Express Gold Card is one of the most valuable transferrable point-earning cards on the market. In fact, I ranked it #1 among Amex Membership Rewards (MR) Points-earning cards for earning opportunities. This is because it earns 4x MR points per dollar on Dining worldwide and at Grocery Stores stateside. However, the Gold Card is far from perfect and is not for everybody. This post presents five reasons why you should not get the American Express Gold Card.
High Annual Fee
The most basic argument against the American Express Gold Card is its $250 annual fee. This fee is not waived for the first year and is very high relative to other mid-tier cards. American Express itself has two other mid-tier cards with lower annual fees: the Everyday Preferred Card ($95) and the Green Card ($150). Those who are interesting in an American Express MR-earning card might be better off with either of these options.
Furthermore, many of Amex’s competitors also have mid-tier cards that offer similar earning opportunities and perks. Two of the best are the Chase Sapphire Preferred and the Citi Premier. Both cards have $95 annual fees, which is roughly 60% less than that of the Gold Card.
Nonetheless, $250 is a lot for what you are getting (or not getting) with the Gold Card. This will become more apparent when looking at the other reasons.
There Are Better Sign-Up Bonuses Elsewhere
The only knock against the Gold Card for earning opportunities is its sign-up bonus. In fact, the Gold Card offers just 35,000 MR points for $4,000 minimum spend within the first three months. 35,000 points for a card with a $250 annual fee is paltry. And the $4,000 minimum spend only makes it worse.
American Express cannibalized themselves by making the Green Card’s public bonus worth 30,000 points. And the minimum spend for that bonus is $2,000, which is half of that of the Gold Card. Thus, the Green Card has a bonus that’s easier to obtain for more people. I would rather sacrifice 5,000 MR points to save $2,000 with the Green Card.
Moreover, the Gold Card is dead last compared to competitors in terms of sign-up bonus value. Citi offers a 60,000-point bonuses for their mid-tier card while Chase offers 80,000 points for theirs. Both competing cards have lower annual fee and the same $4,000 minimum spend as the Gold Card. Why can’t American Express compete with Chase and Citi by increasing their sign-up bonuses?
Limiting Airline Incidental Credit
The American Express Gold Card comes with a $100 annual airline incidental credit. Unfortunately, this credit is infamously limiting and hard to use. It’s a relic from a time when the travel card market was less competitive for issuers and rewarding for consumers.
This credit is the same one that comes with the American Express Platinum Card. But its only $100 instead of $200. This credit is not a general travel credit like the one that comes with the Chase Sapphire Reserve. Instead, the credit is limited to certain uses such as checked bags and in-flight expenses. Amex should make this card (and the Platinum Card) more attractive by broadening this credit to make it a general travel credit. This way, they can compete better with the Chase Sapphire Reserve and Citi Prestige.
Limiting Dining Credits
Furthermore, the Gold Card comes with $120 in dining credits each year. But they have very limited use for many people because they are only useful at six certain restaurants. This is unfortunate because not everyone likes or lives nearby those restaurants.
But that’s not all. American Express split the credits into 12 monthly credits worth $10 apiece. Receiving such a small amount each month only makes the credits useful for tipping. I would consider using the credits for one alcoholic beverage per month at the Cheesecake Factory. The lone drink plus a tip for the bartender will likely total to $10, depending on what I order. However, I would still be paying for food, desserts, or other menu items out of pocket.
American Express should at least offer one $120 annual credit so that it will be more useful to more people. Amex should also make this credit available for any dining purchase instead of just specific restaurants. Not many other cards have a credit like that, and Amex could have a first-mover advantage with the Gold Card. They are so close to being competitive with perks, but they need to make some tweaks.
American Express is their own credit card network and issuer. That means they get to decide which merchants code as what. This is important because category coding determines how many MR points you will receive for a given purchase.
Unfortunately, American Express has multiple categories for various grocery stores and restaurants that might not fit Amex’s definition of either. For example, a smaller grocery store will code as “Merchandise & Supplies – Groceries” with American Express. But it will code as “Grocery Stores” with Visa. However, Amex will reward you the full 4x points for “Supermarket” purchases. But not all grocery stores code as “Supermarkets”. Using the Gold Card at this merchant will net you just one point per dollar simply because of American Express’ coding system.
Coding issues are common among all American Express Cards. However, the Gold Card is hit particularly hard because of its 4x bonus categories.
Finding a merchant’s category code is easy for American Express and MasterCard. Just click on this link which leads you to a PDF with the codes. Each card network (as well as the IRS) posts their own code lists.
The American Express Gold Card is by no means perfect. It’s not for every traveler as well. And the five reasons presented above are why you should not get the Gold Card. Many people love the Gold Card because of its earning structure. But a card’s earning structure is only one part of the larger picture.