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One of the biggest bits of credit card news in recent times was the introduction of the Chase Sapphire Reserve in 2016, a new addition to the premium travel rewards card segment of the market. Many of you probably agreed with our assertion that American Express and Citi needed to step up their game to make their premium cards more competitive. Fortunately, it didn’t take long for this to happen, as just a couple of months after the Sapphire Reserve launched, The Platinum Card from American Express announced that it will offer an unlimited 5x Membership Rewards points on airfare purchases made directly with the airline. This 5x earning rate was then expanded to include prepaid hotels booked through Amex Travel. Today I’ll take a look at when the Amex Platinum is now a better option to carry in your wallet.
To come to this decision, I’ll take a look at this from a mathematical perspective (much like my break-even analysis on the Sapphire Reserve compared to the Chase Sapphire Preferred Card). Both the Reserve card and the Amex Platinum carry annual fees, but these can be cut by utilizing the travel credits they provide. For this analysis, I’ll assume that you maximize both the $200 airline fee credit on the Amex Platinum and the $300 travel credit on the Sapphire Reserve. This means that the Amex Platinum “costs” an additional $200 per year, so we’ll first look at how much you need to spend on airfare to cover this added fee.
In TPG’s most recent valuations, he pegs Ultimate Rewards points at 2.2 cents apiece, while Membership Rewards points come in just a bit behind, at 2.0 cents apiece. That means you’d earn the following on eligible airfare purchases when you use one of these two cards:
- Sapphire Reserve: 3 points x 2.1 cents = 6.3 cents
- Amex Platinum: 5 points x 1.9 cents = 9.5 cents
In other words, every dollar you spend on airfare using the Amex Platinum would give you an additional 3.2 cents of value. From there, the calculation is straightforward to identify how much you need to spend to cover the additional $200 annual fee:
$200 ÷ $0.032 = $6,250
Here’s how that works out in terms of points:
$6,250 x 5 points = 31,250 Membership Rewards points (worth $593.75)
$6,250 x 3 points = 18,750 Ultimate Rewards points (worth $393.75)
As you can see, at this level of spending, the additional Membership Rewards points you’d earn on airfare are worth about $200. If you typically spend more than that in a year, you’ll come out ahead by using the Amex Platinum.
However, chances are quite high that you’ll be using these cards for other purchases outside of airfare. As a result, you need to consider your spending levels across other categories to really calculate if this new bonus on the Platinum Card makes it a better option than the Chase Sapphire Reserve. Here’s a quick summary of the earning rates on each card:
Airfare: 5x Membership Rewards points booked directly with airlines or with Amex Travel
Hotels: 5x Membership Rewards points on prepaid bookings made through Amex Travel
All other purchases: 1x Membership Rewards points
Travel purchases: 3x Ultimate Rewards points
Dining purchases: 3x Ultimate Rewards points
All other purchases: 1x Ultimate Rewards points
For example, let’s say that you typically spend $200 per month on airfare, $100 per month on prepaid hotels, $300 per month on other travel purchases, $300 per month on dining and $500 per month everywhere else. Here’s how those spending patterns would earn points on each card:
Airfare: $200 x 12 months x 5 points per dollar = 12,000 points
Prepaid hotels: $100 x 12 x 5 = 6,000 points
Other travel: $300 x 12 x 1 = 3,600 points
Dining: $300 x 12 x 1 = 3,600 points
Other: $500 x 12 x 1 = 6,000 points
Total earnings: 31,200 points, worth $592.80.
Airfare: $200 x 12 months x 3 points per dollar = 7,200 points
Prepaid hotels: $100 x 12 x 3 = 3,600 points
Other travel: $300 x 12 x 3 = 10,800 points
Dining: $300 x 12 x 3 = 10,800 points
Other: $500 x 12 x 1 = 6,000 points
Total Earnings: 38,400 points, worth $806.40.
In this case, you’re getting an additional $213.60 of value by using the Sapphire Reserve for these purchases.
As you can see, this can get quite complicated with these different categories of purchases and valuations of the points you’re earning. To help with the calculations, I created a spreadsheet for you to use. Simply input your valuations of Ultimate Rewards points and Membership Rewards points (if you don’t agree with TPG’s valuations, which are already in the spreadsheet) along with how much you typically spend in a month in each category and Excel will identify which card is best for you.
Here’s the link to access the file: Sapphire Reserve and Amex Platinum break-even spreadsheet.
Of course, this analysis is limited in that it’s only looking at the earning rates on these two cards. There are many other benefits that could push you toward one card or the other, most of which are much hard to quantify or only apply to the first year of cardmembership. Here are some of the key perks that may factor into your decision:
- Sign-up bonus: Currently, the Sapphire Reserve is offering 50,000 bonus points after you spend $4,000 on purchases in the first three months of account opening, while the Amex Platinum is offering 60,000 bonus points after you use your new card to make $5,000 in purchases in your first three months. The Amex Platinum’s is clearly the superior offer, but remember that this only helps in the first year of cardmembership, and the Amex Platinum has offered 100,000-point bonuses in the past, most frequently targeted through the CardMatch tool.
- Uber credits: Amex Platinum cardholders now receive $200 in Uber credits each year ($15 per month through November and an elevated $35 in December). This is even valid on UberEats, so if you regularly utilize these services, it’s a great way to further mitigate the annual fee differences. Just be sure to add your Amex Platinum as a payment method in the Uber app to unlock these credits.
- Lounge access: Have a credit card with lounge access is a great way to minimize the stress of traveling, and both cards offer access to Priority Pass lounges (and both now include guest privileges). However, the Amex Platinum will also get you into Delta Sky Clubs when traveling on Delta (no guests), Airspace Lounges (two guests) and Centurion Lounges (two guests or immediate family). If you regularly travel to or through an airport with these lounges but no Priority Pass lounges, this could push you toward the Amex Platinum.
- Hotel status: This is another category where the Amex Platinum really shines, offering complimentary Hilton Honors Gold status and SPG Gold status (which for now actually gets you Marriott Gold status when you link your SPG and Marriott Rewards accounts). If you regularly visit these properties, this can be a nice way to make your stays a bit more rewarding.
- Car rental coverage: This perk swings in the favor of the Sapphire Reserve, since it offers primary car rental coverage (the Amex Platinum’s coverage is secondary, though you can pay a flat rate per rental to “upgrade” to primary coverage when you enroll in Amex’s premium car rental protection program). While you certainly hope you’ll never need to use this benefit, it provides nice peace of mind in case your rental car is damaged or stolen.
These are just some of the valuable perks offered on each card, so be sure to factor these into your decision making process as well. For a more comprehensive overview of these benefits, be sure to read my post on the Battle of the Premium Travel Rewards Cards.
It’s great that American Express responded to the release of the Chase Sapphire Reserve Card by improving the benefits on The Platinum Card from American Express. However, unless you spend a lot of money on airfare (and prepaid hotel bookings) in a year, the Sapphire Reserve is probably still the better bet for most travelers out there. That being said, some of the other benefits on the Amex Platinum could make it a great addition to your wallet, even if the earning rates still leave a bit to be desired. Here’s hoping that there are even more enhancements up issuers’ sleeves!
This cash back card has a focus on dining and entertainment where you can earn unlimited 4% cash back in those spending categories. You can also earn 2% cash back at grocery stores and 1% cash back on all other purchases.
- Earn a one-time $500 cash bonus after you spend $3000 on purchases within the first 3 months from account opening
- Earn unlimited 4% cash back on dining and entertainment, 2% at grocery stores and 1% on all other purchases
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won't expire for the life of the account and there's no limit to how much you can earn
- No foreign transaction fees
- Access to premium experiences in dining, entertainment and more
- $0 intro annual fee for the first year, $95 after that