The disturbing recent trend with American Express cards

There’s a lot to like about American Express cards. Many of them offer rewarding sign-up bonuses, useful perks and lucrative spend categories. This, along with retention and referral bonuses, makes is pretty to easy to earn a lot of valuable miles and points with these cards.

However, I’m seeing a trend off late that represents a net negative change for us consumers. The most recent changes Amex made to their Delta cards was yet another signal in that direction.

Delta Card Portfolio Refresh

The most recent change was announced yesterday. If you look carefully, it follows the recent trend. Increase annual fees on “premium” cards by offering “exciting” benefits.

• The annual fee on the Gold Cards is increasing from $95 to $99, a 4.2% increase
• Annual fee on the Platinum cards is increasing from $195 to $250, a 28.2% increase
• The annual fee on the Reserve cards is increasing from $450 to $550, a 22.2% increase

Now, you may argue that these changes have been replaced by a few positive changes. These include new spend categories, lounge access and upgrades. However, you really have to wonder how valuable those 2x Delta SkyMiles on a co-branded Delta card would be when you can earn 4x on dining with the Amex Gold Card.

Given that you can transfer your Membership Rewards points to Delta SkyMiles at a 1:1 ratio, I don’t really see the incentive beyond the sign-up bonus. The strongest case after these refresh would only be for the Reserve cards, if you intend to stick to Delta and also generate a lot of spend to earn status.

Amex Gold Annual Fee Increase

I’ve written before about how I’m a free agent when it comes to airlines. However, I’ve been a long-time cardholder of Amex’s two flagship products, the American Express Platinum and the Amex Gold. I signed up for the ‘Premier Rewards Gold Card’ back in the day when the annual fee was $95.

Now the annual fee is $250. It has a $100 airline credit and a $120 dining credit, spread across $10 per month. Like most changes to Amex’s cards, these credits are tied to specific airlines and specific dining options. In simple terms Amex’s counting you on spending with their partners.

Amex Platinum Annual Fee Increase

The Platinum Card annual fee increases are even more frustrating. If you hold the personal version, you now have to spend at Saks Fifth Avenue and ride with Uber to justify the annual fee increase. If you have the business version, you only have one year of WeWork membership. Oh yes, there’s a $200 Dell credit too! But wait, it’s in two chunks of $100 each. Again, I find this benefit pretty useless since I’m not a part of that ecosystem.

Also, for the benefits discussed above, here’s the key part. You can always work things out and say how you use the credit to ensure that you recoup most of the annual fee that you pay. However, consider this thing. You’re drastically altering your consumer behavior, just to get a ‘credit’. When you’re forced to drastically change your consumer behavior, credit cards with annual fees of $550 and $595 are no longer no-brainers.

Ask yourself this question. How is the annual fee increase justified if you never spent a dime with Grubhub, Uber, WeWork or Dell prior to getting the Platinum card?

Airline Fee Credits and Gift Cards

This was the latest domino to fall. The gift card workaround on the amex airline fee credit is also dead now. You will have to select and fly a particular airline now in order to use those credits.

The Pundit’s Mantra

I must admit that Amex still continues to be one of my favorite card issuers. However, the recent increases in annual fees to many American Express cards has left me a bit flustered. For cards that I’ve held loyally for many years, I’m not willing to change my spending pattern in order to justify Amex’s annual fee increases.

Where does this leave loyal customers like us who’ve renewed high annual fee cards over the years? Amex has been pretty generous with retention bonuses. However, if they keep increasing annual fees without adding substantial benefits, it won’t be long before more consumers start seeing through their marketing gimmicks, when they accompany every annual fee increase with the phrase “exciting new benefits”.

In a nutshell, American Express cards are adding new benefits, but they’re making it both expensive and difficult to use for consumers.

What do you think about Amex’s annual fee increases across the board over the last couple of years? Is it making you re-evaluate your loyalty with them? Let us know in the comments section.

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