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Whenever a friend or family member expresses an interest in the points and miles hobby, the first thing I always suggest is to choose a solid travel rewards credit card. If you aren’t racking up huge account balances through travel, your everyday spending habits play a massive role in earning and redeeming points and miles. If you focus on a single card, this can be incredibly lucrative, especially in the first year. Today I’ll continue my earlier series that looks at this very thing.
In previous posts, I’ve looked at cards like the Chase Sapphire Reserve, the SPG American Express, the Southwest Premier Card, the Amex EveryDay Preferred Card and the Alaska Visa Card. Today I’ll add another popular card to this list as I evaluate how rewarding the Platinum Card from American Express can be in just your first year of cardmembership.
Sign-Up Bonus and Benefits
The card is currently offering a sign-up bonus of 60,000 Membership Rewards points after you use your new card to make $5,000 in purchases in your first three months. This bonus is worth $1,140 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. The card also now offers 5x points on airfare purchased directly with airlines and 5x points on hotels booked through Amex Travel, incredibly lucrative earning rates.
Even though the card carries a recently increased $550 annual fee, there are many other benefits that can add significant value:
- $200 annual airline fee credit
- Priority Pass Select membership (now with up to 2 guests)
- Access to Sky Clubs (when flying Delta) and Centurion Lounges
- $200 Uber credit every year
- Complimentary Hilton Gold and SPG Gold status (the latter of which gets you Marriott Gold status as well)
- Access to Fine Hotels & Resorts
- Up to a $100 application fee credit for Global Entry/TSA PreCheck
For a full list of perks, be sure to check out Eric Rosen’s post on Is the Amex Platinum Worth the Annual Fee?
So if you open the Amex Platinum, earn the sign-up 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 Platinum Card in one year.
In doing so, I made the following assumptions:
- 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.
- 50% of the “Healthcare” category consists of premiums via payroll deductions and thus can’t be paid with a credit card.
- 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 cardmembership translate to Membership Rewards points:
|Food at home||$4,049||1 point/$||4,049|
|Food away from home||$3,154||1 point/$||3,154|
|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 92,000 Membership Rewards points in the first year of using the Platinum Card from American Express. 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 Platinum:
1. Three Round-Trip Economy Tickets to Hawaii
Planning a trip using points and miles to the Aloha State isn’t always the easiest goal in this hobby. However, you have a couple of options at your disposal through the Membership Rewards program. 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. You’d even wind up with over 17,000 Membership Rewards points left over, though if you’re fortunate enough to have a transfer bonus when you’re ready to pull the trigger, you could wind up with four or even five of these awards.
For those readers on the East Coast, you also have options to redeem this haul of points for three tickets to Hawaii by transferring to Flying Blue, the loyalty program of Air France and KLM. Since the carriers are a part of Sky Team, you can redeem Flying Blue miles on Delta flights, and a round-trip economy award ticket from anywhere in the US to Hawaii will run you just 30,000 miles. Once again, a year’s worth of points from the Amex Platinum will get you and two friends/family members to Hawaii and back.
2. Round-Trip Business-Class Ticket from the West Coast to Tokyo
Another terrific redemption opportunity comes via transferring your Membership Rewards points to Virgin Atlantic’s Flying Club and then redeeming those miles on ANA flights. 90,000 points will get you from any of ANA’s West Coast gateways to Tokyo, including Seattle (SEA), San Francisco (SFO), San Jose (SJC) or Los Angeles (LAX). In fact, if you can take advantage of the current 30% transfer bonus, you could even score a round-trip first class ticket on these routes. Those awards normally cost 110,000 Flying Club miles but would only require 85,000 Membership Rewards points when you factor in the current 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 rightly has one of the best reputations in the world when it comes to premium classes, so if you’re looking to ride to Asia in style, consider transferring your Membership Rewards points to the carrier’s KrisFlyer program. One-way business-class award tickets from Europe or the US to Singapore all fit within the numbers above. Generally speaking, that’s 12+ hours of bliss in the sky.
Here’s what you’ll pay from these gateways:
- Europe: 85,000 KrisFlyer miles
- West Coast (Los Angeles and San Francisco): 88,000 miles
- Houston: 92,000 miles
- East Coast (New York-JFK): 92,000 miles
Note that these same award prices apply if you connect in Singapore to several other Southeast Asian countries, including Malaysia, Indonesia and Thailand. Unfortunately, the carrier did devalue its award chart earlier this year, though you no longer need to pay fuel surcharges on these flights. Keep in mind too that Singapore only releases premium-class award inventory to its own members, so there’s typically no way to book these awards through a partner.
The Membership Rewards program carries a ton of value, so it’s no surprise that it regularly earns a high spot on TPG’s monthly valuations. The Platinum Card from American Express is one popular card that may not have the most lucrative earning rates but still has a valuable collection of benefits for cardholders. If you open the Amex Platinum 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 24,150 extra points in the last 6 months alone on the card, 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 Platinum to boost your balances even higher.
Regardless of where you fall on these three items, I hope you can see how a single travel rewards credit card can be incredibly rewarding, especially in the first year.
How would you redeem one year of Membership Rewards points from the Amex Platinum?
The American Express Platinum card has some of the best perks out there: cardholders enjoy the best domestic lounge access (Delta SkyClubs, Centurion Lounges, and Priority Pass), a $200 annual airline fee credit as well as up to $200 in Uber credits, and mid-tier elite status at SPG, Marriott, and Hilton. Combined with the 60,000 point welcome offer -- worth $1,140 based on TPG's valuations -- this card is a no-brainer for frequent travelers. Here are 5 reasons you should consider this card, as well as how you can figure out if the $550 annual fee makes sense for you.
- Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
- Up to $200 for Uber rides annually. Credit and Uber VIP status available to Basic Card Member only.
- 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
- 5X Membership Rewards® points on eligible hotels booked on amextravel.com.
- As a Platinum Card Member, you can enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
- Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
- $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
- Terms Apply.
- See Rates & Fees