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 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.
Coding Issues
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.
Final Draw
The American Express Gold Card is by no means perfect. It’s not for every traveler as well. And the four 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.
Sorry, but I think you are going overboard on coding. For example, 7-11s code as a grocery for the Amex charges I’ve done on the Gold card so they earn 4x points. The restaurant credit is very useful. It’s good on Seamless/Grubhub and I just pick up my order at a restaurant I would have used anyway. Admittedly, that strategy doesn’t work if you live in a rural area, but let’s face it a card with a 4x multiplier on restaurants is targeting urban/suburban dwellers.
Hi Arlington Traveler, Thanks for reading PYCR! The coding is a very “your mileage may vary” situation, depending on the merchants you purchase from and/or where you live. I respectfully disagree that I went overboard about this reason. But coding can be a huge problem for some cardholders, but not all. The dining credit is also a “your mileage may vary” situation. But few people are likely to get use out of it because the monthly amount is so little. That’s why I suggested making it an annual credit (like the airline incidental credit) and expanding it to be a… Read more »
My point is the coding can cut both ways. For example, the on site cafeteria @ my employer did not code as a restaurant for the CSP bonus category, but it does on the Amex Gold. As for maximizing the credit, I think Chase’s changes to the CSR show the move is towards gamification of credits. The CSR was too good to be true before the change, because for essentially $50 more a year than the CSP you got 50% more points on the category bonuses, better insurance coverage and Priority Pass. The move is towards credits and benefits which… Read more »
Hmmm, this showed up on my BoardingArea RSS feed after a year. Well things have changed. The Amex Gold offers up to a 60k bonus for new cardholders. In addition, since this post was written Amex Gold will be dropping the $100 very hard to use travel credit effective the end of this year. In its place is a very easy to use $10 a month Uber credit which can be used on UberEats. If you have the Amex Platinum which comes with a $15 a month Uber credit (except in December when its $25), you can use the two… Read more »
Hi Arlington Traveler,
Thanks for reading again! You’re right in that things have changed since this post was originally written last year before the pandemic began. However, it needed to be updated for 2021. That’s why you saw it at the top of your BA RSS feed today. Regardless, this post is meant to show a contrarian point of view towards the Gold Card. Most cardholders will disagree with this post, but that’s fine.
Best Regards,
Anthony
How did this article from a year ago wind up back on top at BoardingArea? I could understand if it had been updated to reflect today’s conditions, but it doesn’t seem that this has happened.
Churning this back up will mislead casual readers who may not learn any other way about the updates to the card, including, as far as I can tell, the nearly universal SUB of 60K MR.
And FWIW, I disagree with your conclusions, I’ve had the Gold card for nearly 3 years now and love the benefits. Completely worth it to me.
Hi Chick B,
Thanks for reading! The intent of this post is not mislead casual readers into doing anything. Rather, its to show a contrarian point of view about a popular charge card. I often recommend the Amex Gold Card in other posts. But no credit or charge card is perfect or for all travelers. Most Gold cardholders will disagree with this post and that’s fine and understandable.
Best Regards,
Anthony
Completely disagree with the reasons provided although I am not renewing my card for different reasons. The sign up bonus routinely can be found for 50K MR using incognito mode (setting safari for instance to private so cookies aren’t used). 50K MR is solid. The $10 monthly dining credits includes grubhub. For people in rural areas it may be a problem but if you live in NYC or a major city or town it is no problem. The $10 credit reduces what I would spend anyway. Don’t people order Chinese food or pizza at least once a month? Amex regularly… Read more »
A slice of cheesecake at Cheesecake Factory is less than $10. If you don’t want a slice of cheesecake every month, you can just buy a $10 GC and it triggers the benefit. Save up that for a few months and you’ve got a nice lunch or dinner.
Hi Kevin,
Thanks for reading PYCR! In Southern California, a slice of original cheesecake from the Cheesecake Factory is $7.95 + tax, which is about $8.50. You’re just over $10 if you include a good tip. Other slices are above $8. Plus, the Cheesecake Factory isn’t everywhere, so not everyone is able to use the dining credit there.
You could technically get multiple gift cards and save them. But Amex might stop that option at any given point based on their recent history.
Best Regards,
Anthony
The 4X bonus category for supermarkets alone makes this card worth it for my family and more than makes up for the annual fee difference with any other card. We spend a lot on groceries (and restaurants), but don’t put 30+ charges per month on any card (wrt Amex EveryDay Pr).
I also have managed to use both the dining credit for GrubHub and the airline credit for Economy Plus seats and inflight cocktails on the two United flights per year that I am required to take for work (otherwise I am done with United).
Definitely a keeper for me.
Hi JohnnyBoy,
Thanks for reading PYCR! The Amex Gold is very popular for parents / families with huge grocery budgets because of the 4x category. The breakeven point for the 4x categories is $3,150 per year assuming a 2.0 cent per point valuation for MR points. And for many, that’s the top reason why you SHOULD get the Gold Card.
Best Regards,
Anthony
@JohnnyBoy this is exactly why I’m canceling my Amex Preferred Rewards and sticking with the American Express Gold. One point, I have to tell you I like about Amex, is they are very aggressive with retention bonuses. I’m 4 for 4 on my last four calls! They seem to want customers who are not churning and are rewarding them with high earnings multipliers and retention bonuses.