Introduction to American Express Platinum Card
The Good, the Bad, the Wealthy.
Consensus studies show that almost 200 million Americans have at least one credit card. The studies also show that 5% have charge cards. Charge cards are cards that require the balance be paid in full every month and they don’t have financing capabilities.
People use credit cards for many reasons. If you have bad credit, a credit card can help improve your score if you keep up-to-date on the payments and pay a high-interest rate. Other people use their credit cards to rake in the rewards – many credit cards offer frequent flier miles as an incentive.
Others keep their credit cards stowed away for emergencies. Credit and charge cards can also be used to flaunt your statue and wealth. These luxury cards are usually given colorful nicknames, such as black card, sapphire or platinum.
The American Express Platinum card is a charge card with an extremely steep annual fee, immense airline awards and a flash of wealth. Here are the advantages and disadvantages of the charge card:
60,000 Bonus Points if you spend $5,000 in the first 3 months
The most generous sign-on bonus across all card companies, cardholders of the American Express Platinum Card are offered 60,000 bonus points after they spend $5,000 in the first 3 months of owning the card. These points can be redeemed as direct redemptions with companies affiliated with AMEX, such as Amazon or Uber.
However, a better way to maximize your reward points is by redeeming them with airlines included in AMEX partner programs. You could potentially get two round-trip tickets to Hawaii or Europe, depending on the airline.
Up to $200 in credits for annual air travel expenses (baggage fees, etc.)
Every year, you will be allowed to choose one specific airline to receive credits on that airline up to $200 for “incidentals.” These credits can only be used for that airline, but you are able to change to a different airline each new year. The credits can go toward things like baggage fees or in-flight refreshments, but not toward airline tickets.
Up to $200 in Annual Uber credit
Uber is one of the program partners with American Express. Uber offers $15 in credits every month and up to a $35 credit in December to American Express Platinum cardholders. The new requirement is having your AMEX card linked to your Uber account.
The credits also work with Uber’s new food delivery service UberEats.
Airport lounge access – 1000 airports worldwide
Nothing makes traveling via airplane worse than having to wait out long flight delays in an uncomfortable, plastic chair in the terminal. If you’re tired of fighting for that one outlet to plug in your laptop or tired of the person sleeping in the chair next to you snoring and drooling, an airport lounge sounds like a dream.
American Express has two flagship lounges — The Centurion Lounge and the International American Lounge. With the AMEX Platinum card, you will have access to both lounges in any available airport, as well as other partners in the lounge network.
You will also receive a complimentary Priority Pass Select membership and $100 credit toward Global Entry. Without the perk of owning an American Express Platinum card, a Priority Pass Select membership would cost you about $400. If you’re a frequent traveler, this is quite the benefit for you.
Global Entry allows you expedited clearance into the United States when traveling internationally. Successfully passing a background check, approval from the United States government and completing a formal application are all required for a Global Entry perk, but if you travel overseas often, it will reduce your wait time at Customs.
Hotel rewards — free enrollment in Hilton’s Hilton Honors Rewards in Gold-level
The usual cost of enrolling in the gold level of Hilton’s Hilton Honors Rewards is $2,880 per year! This free perk allows you to earn more points on paid hotel stays.
Additionally, you will have access to benefits and upgrades at 750-plus Fine Hotels & Resorts properties around the world, complimentarily.
You will also receive discounts on airline companion tickets and free access to a premium global assist hotline. The American Express Platinum has premium perks for those who love to travel and do so frequently.
No foreign transaction fee
Another benefit for frequent travelers. If you use your American credit cards in other countries, there is often a foreign transaction fee attached. Not with the American Express Platinum. There aren’t any additional fees for foreign transactions.
We’ve covered the positives, what about the negatives?
$550 annual fee – not waived the first year
Many premium credit cards with wealthy cardholder waive the first year’s annual fee. Not for the American Express Platinum. Perhaps they are trying to weed out who can really afford the card.
No financing capabilities – charge card only, not credit
There is a difference between charge cards like the American Express Platinum card and your run-of-the-mill credit cards. For one thing, the AMEX card requires that the full balance of the card be paid every month. Charge cards don’t let the cardholders carry a balance of credit.
If you miss a payment, you will be dinged in several ways:
$38 late fee if the balance isn’t paid IN FULL every month
In addition to an annual fee of over $550, you will be charged a fee of $38 if you don’t pay your balance in full every month. Given that you’re required to spend $5,000 in the first 3 months to get the 60,000 bonus points, you should be prepared for your monthly balance to be $1,500 or more per month!
No new purchases until the balance is paid
Another consequence of not paying your balance in full every month is you can’t make any new purchases until your balance is paid.
Another disadvantage related to no new purchases until you’ve paid the balance is that your charge limit varies monthly based on a number of factors and you aren’t usually privy to the limit. Meaning, you could inadvertently go over your limit and have your card declined in embarrassing situations or travel emergencies.
Up to 5 points per $1 spent
For a card with such a huge annual fee, you would think cardholders would get more than 5 points per $1 spent. And that return is only good for travel that is booked through the American Express travel website. Other non-travel purchases are only rewarded 1 point per $1 spent.
Given that the main purpose of the card is for travel, it does make sense that the most lucrative perks go toward travel credits. However, some of the rules involving the travel are a bit cumbersome – credits only apply to one specific airline and air travel has to be booked through a nepotist travel agency.
History of the American Express Platinum Charge Card
The American Express Company was founded in 1850. It was originally started as a mail express business via railroad in Upstate New York. A few years later, the company expanded to selling money orders to compete with the US. Post Office.
The company launched their traveler’s cheques in the 1890s. The U.S. Government became concerned that American Express had the monopoly on the railroad express services and the government commandeered the railroads for World War I activities, such as moving troops and equipment.
This resulted in all contracts between the express companies and railroads to be null and void. A new consolidated railroad company formed after the war was over with American Express owning 40% of the company. The company started focusing on financial services, in addition to their continued express mail service.
The first charge card was released in the late 1950s and charge cards are now what the American Express company is most known for, hence the card being abbreviated to AMEX. It is a symbol of status and wealth.
First released in 1984 as an exclusive, invitation-only travel card, the original annual fee was $250, less than half of what it is now. While consumers can openly apply for the card now, it used to be only for American Express cardholders of at least 2 years with perfect payment history.
In 2017, the American Express company redesigned the card with its current benefits for a new generation. Aside from the increased perks, the card had a new, sleek metal look to it.
Worth Its Weight in Platinum for Jetsetters
The pendulum of the perks available with this card swings mostly toward the wealthy or people who travel frequently overseas for work or leisure.
To even qualify for this card, you need to have excellent credit and a high income to ensure that you can meet your responsibility of paying your entire balance by the end of the month.
If you’re neither rich or in good standing credit-wise, you have a very slim or nonexistent chance of qualifying.
If you plan to use your American Express Platinum for business purposes, the company actually has a separate card with the same perks called American Express Platinum Business. That might be a more reasonable card, if you can apply purchases toward tax write-offs.
Overall, if you travel across the globe for your work, the American Express Platinum card would be more than worth the $550 annual fee, especially if you’re regularly stuck in airport terminals and would prefer an upgrade to the lounges.
David is a financial expert who graduated from the University of Fordham (Master in Finance) in 2001. He has 10+ years of experience in private equity and wealth management. With strong expertise in senior-level financial planning, personal financial analysis, and mortgages, David knows his way around personal finance. Before working at CCR he used to be a financial analyst at McKinsey.
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