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Now, you may argue that these changes have been replaced by a few positive changes.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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I have cancelled my card. “Exciting New Benefits” is certainly not worth annual fee increase when I fly out of a hub dominated by United. Biggest draw was Skyclub access with the card but now you must also have a boarding pass on Delta for that day to use the card for club access. That is a deal breaker for me. Too bad because Delta’s clubs are far superior to United’s clubs.
I’m sort of in the same boat. There’s no Delta SkyClub at my home airport. The primary lounge is an airspace lounge, which I have access due to the Amex Platinum Card. I agree with you though that Delta’s SkyClubs are a lot superior in quality to United’s.
As someone who was considering returning to the Reserve card, this “refresh” has made the decision easy to NOT to. Removing the one key benefit from the Reserve card (Sky Club Access) makes this card overpriced and unnecessary (especially since I’m in a non-Centurion lounge city: DC).
Overall, have become less and less enamored with Delta/Amex offerings and finding much more value in Chase cards these days.
It has been the trend with Amex off late. They’ve been increasing annual fees across the board. However, the benefits haven’t caught up pace to justify the increase.
I am AMEX Gold, have been since 1991, I do like the 5x rewards on airfare and groceries, they do add up quickly. I do not like the bump in fee, as I will not offset with eating. Uber, I will use…what is this ‘retention ‘ bonus you speak of? After 28 years, I should be rolling in them.
Yes, Amex is pretty generous with retention bonuses when you call in. Here it is: https://travelupdate.com/how-to-get-a-great-credit-card-retention-offer/
Is anyone else having this problem with the chip on AMEX Platinum’s metal cards: they don’t work on credit card terminals!! Typically the chip must be rejected three (3) times before one is allowed to swipe the magnetic stripe. Cashiers are almost always patient, as they are fully aware of the problem. I have called American Express more than once on this, and they are more than happy to send a replacement card…with a chip that doesn’t work also! How can a major corporation have such poor quality control??!?!!
I have an Amex blue cash card and a small business card, had them for years, haven’t ever paid an annual fee for them.
The American Express Platinum card annual fee is $550 not $250. Was that a typo on your part?
Hi Ali, the Amex Platinum (Personal) has a $550 annual fee, whereas the Platinum Delta Amex Cards will have a fee of $250 starting Jan 30, 2020.
I agree with a lot of what your are saying but for the AMEX Gold card there really was a huge improvement in the earnings potential that you failed to mention. 4 x on dining, etc. PLUS the airline credit and dining credit outweigh the increase in cost IMHO.
Yes, the 4x categories are great, especially dining and grocery. I’m annoyed by the workarounds to get the dining credit. I pay for dining with that card anyway. Now, I have to make sure I spend with Grubhub or the Cheesecake Factory. 😛