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The credit card world has been in turmoil recently with rumors that the annual fees for one of the most popular travel rewards credit cards, the Platinum CardÂ® from American Express, have risen sharply. Today, you have to pay a fee of $ 550 a year to hold the card – and if the rumors are correct, that number is set to climb to $ 695.
There are other cards that are expensive, for example the $ 550 Chase Sapphire Reserve and some co-branded airline and hotel cards. And, in many cases, people can find enough value in their perks to justify their detention, even if non-essential travel is highly on hold.
But a fee of almost $ 700 sounds like a whole other ball game.
âWe don’t comment on rumors or speculations about our products or our business,â replied an Amex spokesperson when we asked if the fee hike was real. But credit card experts and enthusiasts have been discussing it online for days. This was a hot topic of discussion in a Clubhouse discussion on credit cards we hosted here at NextAdvisor with our sister post, The Points Guy, this week (both sites are owned by Red Ventures).
While nothing has been confirmed yet, it still begs the question: Would you, and should you, pay $ 695 for a credit card?
Before applying for a card, think about your goal: what do you want to do with the benefits it offers? This is especially true for cards with annual fees.
The Amex Platinum currently carries an annual fee of $ 550, certainly not a bargain by any stretch of the imagination. It is, however, offset by perks such as a $ 200 Airline Fee Credit, $ 100 Saks Fifth Avenue Credit, $ 100 TSA PreCheck / Global Entry Credit, and $ 200 per year in Uber. Cash. If you use all of these perks, you’ve already extracted more value from the card than it costs to keep it.
Several sites that follow credit card news have reported that the unconfirmed and suspected $ 695 charge will lead to new benefits such as a $ 300 Equinox credit, $ 240 entertainment credit (for services such as streaming and internet), a $ 200 prepaid resort credit, and even a $ 100 Resy restaurant reservation service credit. If that’s true, and if you’re using up all of those credits – which is a big if – then a more expensive Amex Platinum might work for you.
âI think it really depends on the exact nature of those benefits, like if they’re broken down by month or if they’re really hard to use – that’s going to be essential,â said Chris Dong, credit card reporter at The Guy points. during the Clubhouse chat.
Chris would bend over to keep the card, even with the fees increasing. But Madison Blancaflor, travel editor at The Points Guy, thinks differently: âIf you live in New York, DC, Boston, Los Angeles, or any other big city, you might be able to justify it. But for the vast majority of cardholders, that’s just a ridiculous price for what you get. I don’t think most people will be able to use all of these benefits. In fact, the current fee of $ 550, not to mention the even higher fee, was already enough to discourage her from applying.
Of course, the Amex Platinum isn’t the only Travel Rewards premium credit card on the market. Its direct competitor, the Chase Sapphire Reserve, also has an annual fee of $ 550 and offers solid perks: $ 300 travel credit, $ 100 TSA PreCheck / Global Entry credit, and even $ 60 in DoorDash credits (up to ‘in 2021). And with travel taking a back seat to public safety over the past year, the Reserve has introduced unrelated travel perks that have made it a good premium credit card to hold onto while travel is interrupted.
Both of these premium cards certainly have some perks that help offset the cost of the fees, although there’s no doubt that they come at a steep price. And while it can be difficult to decide between Amex Platinum and Chase Sapphire Reserve cards, it’s important to consider your spending and lifestyle. The âbestâ card is the one that best suits your preferences and helps you reach your financial goals.
In fact, this is true regardless of the cost of the annual membership fee. Whether the price of the Amex Platinum card stays at $ 550 or increases to $ 695, we always recommend that you take a hard look at the perks and perks offered by a card to determine if it is right for you.
Speaking from personal experience, I know that I will have to seriously consider renewing my Amex Platinum card if the price goes up. While I know I would continue to use Uber, Airline, and Saks credits – and would take advantage of Hotel and Resy credits if they did materialize – the $ 300 Equinox Credit would be a tough pill to swallow. I do not have, and do not plan to have, an Equinox subscription, so this benefit would not help offset the high annual card fees.
This illustrates the thought process we would encourage current and potential cardholders to follow when making the decision to keep one of their credit cards, charge or not.
Either way, if you’re in the market for a new travel credit card, there are some great options out there with fees that don’t get you noticed. For example, there has never been a better time to sign up for the $ 95 Chase Sapphire Preferred. It is currently offering a very large sign-up bonus of 80,000 Chase Ultimate Rewards points after spending $ 4,000 in the first 3 months. That’s enough points for two people to travel for free on a flight across the United States, twice.
So while you might scoff at the fees for some premium travel cards – and based on our Clubhouse chat, you wouldn’t be alone – you don’t have to cancel travel cards entirely.
Whatever your spending habits and budget, there are many free and paid credit cards on the market that can help you reach your financial goals. And, once it’s safe to do it again, even to see the world for free.