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Taking advantage of top offers on travel rewards credit cards can be a great way to boost your account balances and unlock valuable redemptions. However, navigating the sea of available products can be overwhelming, especially for someone new to the points and miles hobby. TPG Senior Points & Miles Contributor Nick Ewen is here to help, with a look at the top Amex cards for a variety of different users.
Today I’ll kick off a new series where we examine each major credit card issuer to help you choose the best card for your wallet. My first subject: American Express.
Before I get into the specific products, I want to share my overall approach for this analysis. I started by selecting what I believe to be the best personal American Express credit cards out there (check out my post on Amex business credit cards for non-personal options). Then, I divided those cards up into three different categories:
- Those that earn transferable points
- Those that earn points or miles in a specific program
- Those that earn a fixed return
Then, within each category, I broke down the individual perks of each card using the following criteria:
- Sign-up bonus
- Earning rate(s)
- Annual fee
Finally I tried to provide some context around each card and to whom it might appeal based on a variety of factors, including spending habits, travel patterns and desired rewards. As always, you likely have your own criteria for making these decisions, so feel free to adjust my analysis to fit your own unique situation!
Remember too that American Express recently tightened up its sign-up bonus policies, so if you have had any of these products before, you likely aren’t eligible to earn the sign-up bonus again.
Every traveler should have a card that earns transferable points to shield yourself from devaluations and give you flexibility when it comes time to redeem, and American Express’ transferable currency is Membership Rewards points. The program partners with 17 different airlines including Delta, Singapore and British Airways (though the latter just devalued its transfer ratio as of October 1st). You also have the option to transfer your points to four hotel chains: Hilton, SPG, Choice and Best Western. You can use your points to book flights or hotels directly through Amex Travel, but transferring them to a partner and then redeeming them typically results in the best redemption value.
There are a few popular credit and charge cards that allow you to earn Membership Rewards points:
Sign-up bonus: Earn 40,000 points after you spend $3,000 in the first three months of opening your account. However, be sure to check the CardMatch Tool to see if you’ve been targeted for a higher bonus of up to 100,000 Membership Rewards points (last seen on July 22, 2015).
Earning rate(s): 5 times the points for flights booked through Amex Travel and 1 point per dollar everywhere else
Benefits: You’ll enjoy access to over 800 airline lounges through Priority Pass along with Delta SkyClubs and American Express Centurion Lounges. You can also receive a $200 airline fee credit annually to cover incidentals like checked bag fees, change fees and in-flight purchases. The card also waives foreign transaction fees and comes with complimentary SPG Gold status and (as of last week) complimentary Hilton HHonors Gold status.
Annual fee: $450
Analysis: This card may not be the best option if you’re new to the hobby, and it doesn’t make much sense for a very infrequent, casual traveler. While the points are quite valuable (1.9 cents apiece based on TPG’s most recent valuations), the everyday earning rates leave a lot to be desired. That being said, American Express has started opening up more Centurion Lounges (most recently in Seattle, with another slated for Houston in 2016) that make regular airline clubs look pedestrian in comparison, and the airline fee credit can be used for gift cards in small denominations.
For more information, check out TPG’s post on why the Amex Platinum is worth the $450 annual fee.
Sign-up bonus: 25,000 Membership Rewards points after you use your new card to make $2,000 in purchases in your first three months.
Earning rate(s): 3 points per dollar spent for flights booked directly with an airline; 2 points per dollar spent at US gas stations, US restaurants and US supermarkets; and 1 point per dollar everywhere else.
Benefits: The card recently updated its benefits to remove foreign transaction fees and also added a new $100 airline fee credit to cover incidentals. You can also get a $75 hotel credit on qualifying charges when you use your card to book a stay of two nights or longer through The Hotel Collection.
Annual fee: $195 (waived for the first year)
Analysis: This card has long been popular for regular travelers, as earning 3 Membership Rewards points per dollar spent on airfare represents a solid 5.7% return on your spending. Even though the annual fee was increased as part of this year’s changes, you can easily make up for that increase with the airline fee credit, and the card finally has removed foreign transaction fees, saving you 2.7% on every purchase you make abroad.
Sign-up bonus: 15,000 Membership Rewards points after you use your new card to make $1,000 in purchases within the first three months.
Earning rate(s): 3 points per dollar spent at US supermarkets (up to $6,000 per year), 2 points per dollar spent at US gas stations and 1 point per dollar spent everywhere else. If you make 30 or more purchases in a billing period, you’ll earn 50% more points on those purchases.
Annual fee: $95
Analysis: This is a great card that gets you into the Membership Rewards program without breaking the bank with a high annual fee. It’s also great if you don’t travel that frequently, as you don’t get the significant perks of the Amex Platinum or Premier Rewards Gold but still have some solid category bonuses for everyday spending. If you do use it as your primary card, you should definitely make a point of hitting 30 transactions a month to earn the 50% bonus, though be sure you know the timeline for how American Express awards these points.
For more information, check out my post One Year of Earning and Burning with the Amex EveryDay Preferred.
Sign-up bonus: 10,000 Membership Rewards points after you use your new card to make $1,000 in purchases within the first 3 months.
Earning rate(s): 2 points per dollar spent at US supermarkets (up to $6,000 per year) and 1 point per dollar everywhere else.
Annual fee: $0
Analysis: If you’re looking for a card without an annual fee that still allows you to participate in the Membership Rewards program, this card is a terrific option. I love that it still gives you a category bonus at supermarkets; many fee-free cards offer a flat earning rate across all merchants. It may take a while to get to a valuable redemption like Lufthansa first class, but it’s a good way to start!
In addition to cards that earn Membership Rewards points, American Express issues several credit cards that are specific for a particular airline or hotel chain. The big advantage with these cards is that they often carry benefits with the individual chain. However, you’re locked into earning points or miles in that specific program, leaving you at the mercy of the airline or hotel chain when it comes to devaluations that can wipe significant value from your accounts.
Sign-up bonus: 25,000 bonus Starpoints after you use your new card to make $3,000 in purchases within the first three months.
Earning rate(s): 2 points per dollar spent at Starwood properties and 1 point per dollar spent everywhere else.
Benefits: Like the Premier Rewards Gold, the SPG Amex recently added a variety of new benefits like no foreign transaction fees and complimentary, unlimited Boingo Wi-Fi at more than 1,000,000 hotspots worldwide. You’ll also enjoy free premium internet access during your stays, and if you spend $30,000 in a calendar year, you’ll be automatically upgraded to SPG Gold.
Annual fee: $95 (waived for the first year)
Analysis: This card is a favorite among points and miles enthusiasts, and TPG even recommends it as a great option for your everyday non-bonus spending. Starpoints regular top his monthly point valuation series, clocking in at 2.5 cents apiece in the most recent version. You can use these points for luxurious hotel stays but also have the option to transfer them to one of 34 airline partners with 5,000 bonus miles for every 20,000 points transferred.
For more information, check out my post on One Year of Earning and Burning with the SPG Amex.
Sign-up bonus: Earn 30,000 bonus miles after you make $1,000 in purchases on your card within your first three months, plus a $50 statement credit after you make a Delta purchase with your new card within the first three months.
Earning rate(s): 2 miles per dollar spent on Delta purchases and 1 mile per dollar spent everywhere else.
Benefits: Enjoy your first checked bag free and priority (Zone 1) boarding on all Delta flights. You’ll also enjoy a 20% discount on in-flight purchases and will pay no foreign transaction fees.
Annual fee: $95 (waived for the first year)
Analysis: This card is a terrific option for those of you in Delta hubs (or if you regularly fly to a Delta hub). The free checked bag benefit will save you $50 on a round-trip flight, and priority boarding can help ensure that you snag space in the overhead bin. Even though Delta has significantly devalued its program over the last few years, there are still some solid redemptions using SkyMiles.
In addition to the Gold SkyMiles Card, you could also consider the Platinum Delta SkyMiles Credit Card or the Delta Reserve Credit Card. In addition to sign-up bonus and in-flight benefits, these cards also give you the opportunity to earn Medallion Qualification Miles and provide several other benefits. For complete information, check out Choosing the Right Delta American Express.
Sign-up bonus: Earn 60,000 points after you spend $3,000 in purchases on the card within your first three months of cardmembership.
Earning rate(s): 12 points per dollar spent at Hilton properties; 6 points per dollar spent at US restaurants, supermarkets and gas stations; and 3 points per dollar everywhere else.
Benefits: The card comes with automatic Gold Status, and you’ll be upgraded to Diamond status when you spend $40,000 in a calendar year. You’ll also enjoy Priority Pass membership (a $99 value), though you’ll need to pay $27 per lounge visit.
Annual fee: $75
Analysis: This is a terrific option for anyone interested in staying in a Hilton property, as Gold status carries a ton of value, including the fifth night free on award stays (only available to elite members) and free breakfast. Having this card also opens up four-night AXON awards, which may still be a good value in certain cases.
There’s also the no-annual-fee Hilton HHonors Card from American Express, which has a sign-up bonus of 40,000 points after you spend $750 in purchases on the card within your first three months of card membership. For more information on these two products, be sure to check out my post on figuring out which Hilton HHonors credit card is best for you.
The third (and final) category is fixed-value cards. These products offer either cash back or a currency that can only be redeemed for a set amount. Even though they don’t offer opportunities to maximize your rewards, they do offer a consistent return and simple earning and redemption structures. Here’s an overview of some American Express cards that fit into this category.
Blue Cash Preferred Card from American Express
Sign-up bonus: Get $150 back after you spend $1,000 in purchases on your new card in your first three months.
Earning rate(s): 6% cash back at US supermarkets (up to $6,000 per year), 3% cash back at US gas stations and select US department stores, and 1% back everywhere else.
Annual fee: $75
Analysis: This card may be a good option for those of you who are looking to just put cash back into your wallet. A 6% bonus category is among the highest you’ll find with cash-back cards, though I wish the bonus extended to merchants other than supermarkets. There’s also the regular Blue Cash Everyday Card from American Express, which carries no annual fee but offers a lower sign-up bonus ($100) and lower bonus categories (3% and 2% instead of 6% and 3%). In order to make the Preferred Card worth the $75 annual fee, you’d need to spend the following in the first year:
- At least $833.33 on groceries
- At least $2,500 on gas and department store purchases
- Some combination of the two that would earn you $25 extra cash back
In subsequent years, those amounts jump to $2,500 for groceries and $7,500 for gas/department store purchases, so be sure to crunch the numbers and make sure that your spending patterns justify incurring the annual fee.
Sign-up bonus: None
Earning rate(s): 1 point per dollar spent on all purchases
Annual fee: None
Analysis: This last card works similarly to the Barclaycard Arrival Plus World Elite MasterCard, as the points you earn can be redeemed to cover any travel cost. You can redeem points in increments of 7,500 points to cover $100 of these expenses (so you’re getting a constant 1.33% return on purchases), and you actually have up to six billing cycles from the date of the transaction in which to redeem them. While the return isn’t nearly as high as you’ll get with the Arrival Plus, you also don’t have an annual fee.
As you can see, American Express has a plethora of available credit cards that offer numerous benefits along with varied earning and redemption options. The most important decision to make when looking at a credit card is what type of rewards you want to earn. Then you can consider each individual product to see which one carries the perks and points that’ll work best with your individual situation.
What are your thoughts on these American Express cards?
Starwood Preferred Guest® Credit Card from American Express
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||15.49%-19.49% Variable||$0 introductory annual fee for the first year, then $95.||0%||Excellent Credit|