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There are few things more important in the world of points and miles than choosing a solid combination of travel rewards credit cards to carry in your wallet. This is especially important if you aren’t a road warrior who can rack up huge amounts of airline miles and hotel points through actual travel. By strategically selecting cards with lucrative earning structures, you can easily unlock valuable redemptions. In fact, if you’re brand new to this hobby, you could open a single new card and earn a massive number of points in a single year.
Today, I’ll update an earlier entry in my series that considers just how rewarding a card can be in the first year. In previous posts, I’ve looked at cards like the Chase Sapphire Reserve, the SPG American Express, the Southwest Premier Card, the Amex Platinum and the Alaska Visa Card. In this guide, I’ll look at the recently updated American Express® Gold Card and evaluate just what you can get from a year’s worth of spending.
Welcome Bonus and Benefits
As noted above, this card recently underwent a significant overhaul and is currently offering a welcome bonus of 25,000 Membership Rewards points after you spend $2,000 on eligible purchases with your new card within the first three months. You can also receive 20% back as a statement credit at US restaurants within the first three months of card membership when you apply by Jan. 9, 2019 (up to $100 back). The points alone are worth $475 based on TPG’s most recent valuations thanks to the array of valuable ways to redeem Membership Rewards points, especially through transfers to partners like British Airways and Etihad. However, you may be able to receive a higher bonus of 50,000 points through a referral from a friend or family member.
In addition to this welcome offer, you’ll now earn 4x points per dollar spent at US restaurants and 4x points per dollar spent on up to $25,000 in yearly purchases at US supermarkets (then 1x). The new version has kept the 3x earning rate on flights purchased directly with airlines from the old iteration, and you’ll earn 1 point per dollar spent on all other purchases.
Even though the updated card carries a higher ($250) annual fee, there are many other benefits that can add significant value:
- $100 annual airline fee credit (works the same as that of The Platinum Card® from American Express)
- $120 annual dining credit ($10 per month) at select restaurants
- Access to The Hotel Collection
For a full list of perks, be sure to check out Benji Stawski’s post on Maximizing the Amex Gold Card.
So if you open the Amex Gold, earn the welcome bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis I used consumer-expenditure data from the Bureau of Labor Statistics for the most recent year available (2016) to estimate what an “average” household would spend (and thus earn) on the card in one year.
In doing so, I made the following assumptions:
- You earn the 50,000-point welcome bonus via a referral link.
- All of the “Food away from home” is purchased at restaurants in the US and thus eligible for 4x points, and you earn the full $100 statement credit in the first three months.
- Only the “Other lodging” category under “Shelter” can easily be paid with a credit card (since you’ll pay a fee for paying most mortgage and rent payments with credit cards).
- The “Vehicle purchases” category under “Transportation” can’t be paid with a credit card, but all other transportation expenses can.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- All other expenses (including “Entertainment” and “Education”) can be paid with a credit card.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of card membership translate to Membership Rewards points:
|Food at home||$4,049||4 points/$||16,196|
|Food away from home||$3,054||4 point/$||12,216|
|Alcoholic beverages||$484||1 point/$||484|
|Housing (other lodging)||$798||1 point/$||798|
|Utilities, fuels and public services||$3,884||1 point/$||3,884|
|Household operations||$1,384||1 point/$||1,384|
|Housekeeping supplies||$660||1 point/$||660|
|Household furnishings and equipment||$1,829||1 point/$||1,829|
|Apparel and services||$1,803||1 point/$||1,803|
|Transportation (gasoline)||$1,909||1 point/$||1,909|
|Other vehicle expenses||$2,884||1 point/$||2,884|
|Public and other transportation||$623||1 point/$||623|
|All other expenses||$6,363||1 point/$||6,363|
As you can see, the “average” American consumer would earn over 105,000 Membership Rewards points in the first year of using the Amex Gold Card. Not too shabby!
What does this get you?
Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the Membership Rewards program has a variety of valuable redemptions, most of which involve transferring to the program’s partners.
Here’s a sample of what you can get from one year of using the Amex Gold:
1. Up to Four Round-Trip Economy Tickets to Hawaii
If you want to use your points and miles to visit the Aloha State, you’re not alone. With the high demand, award seats can be challenging to find. However, you have a couple of options through the Membership Rewards program, and my personal favorite is for West Coast residents. By transferring points to British Airways, you can take advantage of the carrier’s distance-based award chart to book tickets from several gateways to Hawaii for just 25,000 Avios per person, including Los Angeles (LAX) and Phoenix (PHX) on American or San Diego (SAN), Oakland (OAK), Portland (PDX) and Seattle (SEA) on Alaska. With this haul of points, you can take your family of four to the islands and still have over 5,000 points leftover. This could be even more lucrative if you can take advantage of a transfer bonus to Avios; with a 40% bonus offer (like the one that runs through Nov. 15, 2018), you’re just short of six round-trip tickets!
For those readers on the East Coast, you also have options to redeem this haul of points for flights to Hawaii:
- Transferring to Flying Blue, the loyalty program of Air France and KLM: Since both of these carriers are a part of Sky Team, you can redeem Flying Blue miles on Delta flights, though the program has recently complicated things significantly. Based on the new calculator, a round-trip economy award ticket from the US to Hawaii will run you 35,000 miles.
- Transferring to Singapore’s KrisFlyer: As Singapore is a member of the Star Alliance, you can redeem KrisFlyer miles on United-operated flights to Hawaii. These awards will set you back 35,000 miles per passenger
In either of these cases, as long as you can find award availability, a year’s worth of points from the Amex Gold card will get you and two friends or family members to Hawaii and back.
2. Round-Trip Business-Class Ticket to Tokyo
Another terrific redemption opportunity comes through transferring your points to Virgin Atlantic’s Flying Club program. Even though the carrier doesn’t belong to an alliance, it does have some great partners for redemptions. One of the best options is redeeming your miles on ANA flights. By transferring 90,000 – 95,000 Membership Rewards points to Flying Club, you can book a round-trip business-class flight from any of ANA’s North American gateways to Tokyo, including Chicago-O’Hare (ORD), Los Angeles (LAX), New York-JFK, Seattle (SEA), San Francisco (SFO) and San Jose (SJC). In fact, if you can take advantage of a transfer bonus (we’ve recently seen these from both Amex and Citi), you could even score a round-trip first-class ticket on these routes. Those awards normally cost 110,000 – 120,000 Flying Club miles but would require significantly fewer Membership Rewards points when you factor in a bonus.
ANA has some very luxurious premium-class cabins along with some quirkier options in its fleet. The carrier is also set to take delivery of its first A380 in 2019, which will provide another nice upgrade. Regardless of the type of plane you fly, being able to book a round-trip first or business-class ticket from the US to Tokyo with a single year’s worth of credit card points is a phenomenal deal.
3. One-Way Business-Class Ticket from Europe or the US to Singapore
Singapore Airlines is well known for having some of the best premium-class cabins out there, so if you’re looking to get to Asia in style, consider transferring your Amex points to the carrier’s KrisFlyer program. With a year’s worth of Membership Rewards points from the Amex Gold card, you’d have enough points for a one-way business-class award ticket from Europe or the US to Singapore. On most of these flights, that’ll get you 12+ hours of bliss in the sky.
Here are the award rates from these gateways to Singapore:
- Europe: 85,000 KrisFlyer miles
- West Coast (Los Angeles and San Francisco): 88,000 miles
- Houston (IAH): 92,000 miles
- East Coast (New York-JFK): 92,000 miles
Note that these same award prices apply if you continue on from Singapore to several other Southeast Asian countries, including Malaysia, Indonesia and Thailand. Bear in mind that the carrier did devalue its award chart in March 2017, though one positive change is that you no longer need to pay fuel surcharges on these flights. In addition, these premium classes are typically only available for awards through the KrisFlyer program, though we’ve occasionally seen these pop up for partner programs as well.
4. Round-Trip Business-Class Flight From the US to Europe
A final redemption option comes via the Etihad Guest program. Like Virgin Atlantic, the carrier doesn’t belong to an alliance, instead using partnerships with various airlines to provide valuable redemption options for its members. One such partner is American Airlines. If you’re looking to get you Europe in comfort, consider transferring your Membership Rewards points to Etihad, since a round-trip business-class flight from the US is just 100,000 miles (American’s AAdvantage program would charge 115,000 miles for the same flights). While availability is spotty and Etihad’s booking process hasn’t always been easy, the program did improve the partner award ticketing process somewhat recently, making it easier to get solid value for your Amex transfers.
Membership Rewards points typically appear near the top of TPG’s monthly valuations, and a large part of this value comes from transferring points to the program’s partners and then redeeming them for premium class award tickets. The updated American Express® Gold Card provides a great way to earn a large number of these points though lucrative bonus categories and a solid welcome bonus for new cardholders. As you can see, if you open the Amex Gold card now and use it exclusively for a year, you’ll unlock a wide variety of redemption opportunities.
Keep in mind too that the above calculation may be even a bit too conservative:
- The calculation assumes that you’re the average consumer. If you typically spend more in a year, then your earnings will be even higher.
- The calculation assumes that you don’t take advantage of any Amex Offers during the year. I (personally) have earned over 40,000 extra points in the last year alone through my Membership Rewards-accruing cards, so your earning potential can be even higher.
- The calculation assumes that you only open one card. There are many others that will earn you bonus Membership Rewards points in certain categories, including The Blue Business℠ Plus Credit Card from American Express and the Amex EveryDay® Credit Card from American Express. These cards (and others like them) can be used right alongside the Amex Gold card to boost your balances even higher.
Regardless of where you fall on these three items, I hope this analysis has demonstrated how rewarding a single new card can be, even in just the first year.
How would you redeem one year of Membership Rewards points from the Amex Gold?
With some great bonus categories, the American Express Gold Card has a lot going for it. The card offers 4x points at US restaurants, at US supermarkets (up to $25,000; then 1x), and 3x points on flights booked directly with airlines or through amextravel.com. It is currently offering a welcome bonus of 25,000 bonus points after you spend $2,000 in the first three months.
- Get the American Express® Gold Card in Limited Edition Rose Gold, only available until 1/9/2019.
- Receive 20% back as a statement credit at U.S. Restaurants within the first 3 months, up to $100 back. Offer available to new Card Members who apply by 1/9/2019.
- Plus, earn 25,000 Membership Rewards® Points after you spend $2,000 on eligible purchases with your new card within the first 3 months.
- Earn 4X Membership Rewards® points at U.S. restaurants. Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X).
- Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
- Earn up to $10 in statement credits monthly when you pay with The Gold Card at Grubhub, Seamless, The Cheesecake Factory, Shake Shack, and Ruth’s Chris Steak House. This is an annual savings of up to $120. Enrollment required.
- $100 Airline Fee Credit: up to $100 in statement credits per calendar year for incidental fees at one selected qualifying airline.
- No Foreign Transaction Fees.
- Annual Fee is $250.
- Terms Apply.
- See Rates & Fees