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TPG reader Mike writes in with an interesting scenario that is of particular interest to me and I’m sure many of you as we calculate whether it’s worth it to retain our Amex Platinum cards:
Background: Last May, I took advantage of the Amex Platinum sign-up bonus and the Delta/Membership Rewards transfer promotion. It left me with a lot more Skymiles, a fair amount of leftover Membership Rewards points, and bumped me up to Delta Platinum Medallion. The two main benefits I get from the Amex Plat are the lounge access and the $200 airline reimbursement.
Current offers: Delta is currently running a Skyclub promo which waives the $50 initiation fee for new members and also awards 1500 MQMs or two free months of membership. Since I’m a Delta Platinum Medallion, SkyClub membership is discounted to $300. Additionally, Amex is offering a sign-up bonus of 15,000 Membership Rewards points for their Premier Rewards Gold Card, with the annual fee of $175 waived for the first year. The Premier Rewards Gold card is better at earning points for day-to-day spending.
What I’d (ideally) like to do: 1) Get the Premier Rewards Gold card to take advantage of the sign-on promo and use it for everyday spending to earn more MR points; 2) Buy a Delta SC membership at my discounted price, before Jan 1, to take advantage of the current promo; 3) Cancel my Amex Plat after Jan 1, only after using the $200 airline reimbursement to buy Delta gift cards; 4) Assuming I don’t renew my SC membership, get the Amex Plat back for 2013. Doing this would save me around $150 next year and allow me continuity with lounge access.
1) I’m assuming that the $200 airline reimbursement for the Amex Plat resets on the calendar year, not the cardholder’s anniversary. Is this true?
2) If I were to call Amex to simply downgrade my Plat card to PR Gold card, instead of applying fresh for the PR Gold card, would I still be eligible for the bonus points and waiving of the annual fee for the first year? (Or, more generally, how generous are CC companies to customers who want to downgrade/upgrade cards to take advantage of offers?)
3) If I were to cancel my Amex Plat early in 2012, how long should I wait to reapply? (Or, more generally, how long should one wait to reapply for the same card, especially if there is/was some sort of sign-on promotion involved?)
Okay, here are my answers to your three main questions:
1) The $200 in yearly airline reimbursements is based on the calendar year. So on January 1 every cardholder gets a new $200 credit. So a brand new Amex Platinum cardholder would get $200 in credit now and then a new $200 in January. That’s $400 in rebates that can be used to buy airline gift cards, lounge membership or pay for baggage fees/food/etc. That benefit alone pretty much pays for the initial $450 annual fee. Plus, if you ever cancel your Platinum card, you will get a prorated refund of your annual fee. For more info, check out my full review of the Platinum Card.
2) When you downgrade/upgrade cards they often do not give you sign-up bonuses, so I always recommend applying for the bonus you want (like the current 15,000 point sign-up, which while it’s not amazing, it’s still worth roughly $300 to me and the $175 annual fee is waived for the first year. There’s also a Business Rewards Gold card that has a 50,000 point sign-up bonus and waived annual fee with $10k spend within 5 months. You can apply for this card with your social security number and as a sole proprietor and then canceling/downgrading your existing card. Note: many targeted bonuses are only good for upgrading your account, so in that scenario I recommend upgrading.
Once you get the Premier Rewards, just cancel your Platinum card. You will still retain your “Cardmember Since” status with American Express because you still kept a charge account with them active – you just changed around the product, which people do all the time.
3) There is no set rule with American Express in terms of when you can get a card bonus again. I know many people who have gotten several Starwood cards over the years and gotten the highest current sign-up bonus each time. Amex may even start sending you targeted offers to go back to the Platinum card, so I’d bet that you could get it again in 2013 with whatever sign-up bonus they are offering at that time. And who knows – by then they may have a newer, better product (or you could get a hybrid product like the Mercedes-Benz Platinum which offers most of the same benefits and has special Mercedes perks and a current sign-up bonus of 50,000)!
So there you have it. In general, getting the Premier Rewards Gold card is a smart move because it has much better earning potential- with 3 points per dollar on airfare, 2 points per dollar on gas and groceries and 1 point per dollar on everything else. Just remember it does have foreign transaction fees, so never use it abroad!