Is the New Amex Gold Card Worth the $250 Annual Fee?
Last week, American Express updated the benefits of the Premier Rewards Gold card and relaunched it as the Amex Gold Card. The card comes with an exciting new set of perks that make it an attractive option for those who spend a lot on dining out at US restaurants and at the grocery store. Further, it is currently offering a welcome bonus of 25,000 Membership Rewards points after spending $2,000 in the first 3 months of card membership. Click Here to learn more about Amex Gold Card.
Part of the updated suite of benefits included an annual fee hike from $195 to $250. Is the updated Amex Gold card worth the $250 annual fee? I have been asked that question a lot over the last week, so I wanted to get to the bottom of it.
New Benefits of the Amex Gold Card
In my opinion, American Express knocked it out of the park with the updates on the Amex Gold Card. The value proposition it offers has me questioning my points and miles earning strategy. See below for all of the updated benefits on the Amex Gold Card.
- Now earns 4x points at US Restaurants (Previously 2x)
- 4x points at US Supermarkets on up to $25k per calendar year (Previously 2x)
- A new $120 annual dining credit which is split up monthly for charges at GrubHub, Seamless, The Cheesecake Factory, Ruth’s Chris Steakhouse & Participating Shake Shack locations.
- New Card Members who apply for the Gold Card through January 9th, 2019 will get 20% back in statement credits on dining purchases at U.S. restaurants, up to $100 during the first three months of Card Membership.
- Annual Fee is now $250 and is not waived for the first year. This is increased from the $195 annual fee on the Premier Rewards Gold card.
- Click Here to learn more about Amex Gold Card.
Is the Amex Gold Card Worth the Annual Fee?
This article was inspired by a great post written by Greg Davis-Kean last week who writes The Frequent Miler. Greg broke this down into an easy to understand worksheet format which I think is very helpful.
I wanted to do a similar exercise to show that while I won’t be eligible to earn the welcome bonus on this card (since I previously had the Premier Rewards Gold Card), I can still get a ton of value out of it.
I decided to open the card because of how I value the credits and the Membership Rewards points that it earns. There are 4 main benefits from the revamped card that made the offer too good to pass up. I will break them down below.
$120 Annual Dining Credit
One of the newly added benefits to the Amex Gold Card is a $120 annual dining credit. The credits are split up in $10 monthly increments for charges at GrubHub, Seamless, The Cheesecake Factory, Ruth’s Chris Steakhouse & Participating Shake Shack locations.
I value this benefit at face value as both GrubHub and Seamless offer food delivery service where I live. Ordering lunch or dinner once a month from either of these services will not be an issue, and I won’t have to change my spending patterns to take advantage of the $120 credit.
Total Benefit Value: $120
$100 Annual Airline Incidental Fee Credit
Each calendar year, the Amex Gold card will provide you with a $100 credit to be used for things like checked bag fees, lounge access, etc. One of the nice things about this credit is that it works to buy gift cards for many airlines. You can buy $100 worth of gift cards for Delta and be reimbursed for the full amount. This is the route I always take with these Amex airline credits. Since I often fly Delta, I have no problem using them.
While I don’t quite value this benefit at face value (as I would rather have the cash), I would easily pay $80 for $100 in Delta gift cards.
Thrifty Tip #1: The Frequent Miler has a great post on What Still Works for the Amex Fee Reimbursements. As you can see, there are options.
Thrifty Tip #2: Since this is a calendar year benefit, if you were to open the card now, you could take advantage of it before the end of 2018, and again after January 1st, 2019. Effectively getting $200 in credits before paying your 2nd annual fee.
Total Benefit Value: $80
4x Membership Rewards at US Restaurants
One of my favorite new benefits of the Amex Gold Card is that it earns 4x Membership Rewards points at US restaurants. This is a category I spend a decent amount of money on each year, so it has a lot of appeal to me.
I value Membership Rewards points somewhere between 1.7 and 1.9 cents each. Not only can you transfer them to a number of partner airlines, you can often do so with a transfer bonus as was recently the case with Virgin Atlantic transfers.
For the sake of this analysis, we will value Membership Rewards points conservatively at 1 cent each, as you should always be able to get at least that amount for them. I will also assume for the sake of this analysis that my wife and I spend on average $100 a week at US restaurants.
- Weekly restaurant spend: $100
- X 52 Weeks in a year = $5,200
- X 4 Membership Rewards Points = 20,800
- X .01 (Membership Rewards Point Valuation) = $208
Total Benefit Value: $208
4x Membership Rewards at US Grocery Stores
Another new benefit of the Amex Gold Card is that it earns 4x Membership Rewards points at US Grocery Stores (up to $25,000 annually). Again, my wife and I spend a decent amount on groceries, so the 4x multiplier is very appealing to me.
As mentioned above, we will value Membership Rewards points at 1 cent each for this analysis, as you should always be able to get at least that amount for them. I will also assume for the sake of this analysis that my wife and I spend on average $125 a week at US grocery stores.
- Weekly grocery store spend: $125
- X 52 Weeks in a year = $6,500
- X 4 Membership Rewards Points = 26,000
- X .01 (Membership Rewards Point Valuation) = $260
Total Benefit Value: $260
Is the new Amex Gold Card annual fee worth $250? For me, the answer is yes, though that will be different for everybody. Even though I am not eligible to earn the welcome bonus, there is still huge value in holding this card. From my analysis above, I estimate that I can squeeze $418 of value out of the card each year. That is $168 more than the $250 annual fee. As long as that number is larger than the annual fee, I will continue to keep this card in my wallet.
The Amex Gold card is currently offering a welcome bonus of 25,000 Membership Rewards points after spending $2,000 in the first 3 months of card membership. Plus you will receive 20% back as a statement credit at US restaurants within the first three months, up to $100.
If you are eligible for the new welcome bonus, the value of the card for the first year is even better. Using the same valuations from my analysis above, you will see that you can squeeze over $750 in value out of the card for the first year.
Thrifty Tip #3: Click Here to learn more about Amex Gold Card.
Thrifty Tip #4: Not sure if you are eligible to earn the Amex Gold card welcome offer bonus? See our post on the new Amex welcome offer eligibility tool. Each American Express welcome offer bonus can be earned once per lifetime.
We always encourage our readers to do the math before ruling out cards with larger annual fees. Often times, you can squeeze more value out of cards than you are paying for the annual fee. I think Amex has done a great job with the update to the Gold Card. While the Amex Gold card annual fee is $250, I estimate I can come out ahead by $168 each year I keep it open. If you are eligible for the welcome offer bonus, that number gets even better for the first year.
As we often say, when banks compete for a share of our wallets in the form of improved credit card benefits & rewards it is a win for the consumer. Click Here to learn more about Amex Gold Card.
Lead Photo courtesy of American Express
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