Why do people use AMEX w/ annual fees?

The chase sapphire reserve card is very popular and it has a 550 annual fee.

I have the British Airways Amex. Pretend Covid doesn't exist as I explain why I have the card.

I use the card for every single purchase that I can (groceries, petrol, clothing, housewears, etc). I pay it off in full every month. I do not incur any interest fees.

By the end of the year I have earned a boatload of Avios (BA speak for "air miles") and a free companion ticket anywhere in the world. When travel was regular I would use this every year for a business class trip somewhere in the world for my partner and me. It was well worth the annual fee. Plus card membership gives me pretty significant discounts, extra points, or freebies at many places I shop anyway. For me, it pays for itself.

You actually get a lot of bennies with the Platinum Amex: all sorts of discounts at merchants, free travel insurance, and at one point they were crediting $25 a month to PayPal or Venmo or some such. Plus you get to use the Centurion lounges at major airports which are often pretty fantabulous.

I suspect it's a prestige thing. I last went into my bank when the ATM swallowed my card. I just wanted them to get it back for me, but instead one of the 'helpful' assistants got out her iPad to look up my account and started trying to offer me new products or 'upgrade' my account.

I just wanted my card back, but she was all "You're eligible for our Plus card (or whatever it was), our customers all love the design of it!" and she alluded that others would also be impressed by it. If customers believe that, I can partly see why they might go for it.

Those metal cards are becoming popular too and a bank in my country (Monzo) does them. I spotted lots of people on Twitter posting pics of their metal cards and showing off. I don't get it, but some people attach prestige to even the most basic of items.

I just read through the benefits and it does look like there are many, but it also looks too random for me to capably track. Like, upgrades at Hilton hotels, cash back monthly on Peacock and NY Times subscriptions, $10 per month or something to spend on Uber, etc. I guess these sorts of benefits are good for people with a lot of brand loyalty, but I don't like limiting my options to only Hilton hotels, etc. And I still don't use Uber if I can avoid it.

Ah, well. Good for you if you use it and like it, but it's probably not for me.

Also, even though I pay off my balances every month, I'm offended by the notion of a variable 16-25 percent APR. That just seems insulting, and especially for something that bills itself as a luxury. It used to be that that level of interest was only offered by guys who'd break your knees if you didn't repay them on time.

R5 I'm thinking 99.9% of people who have a platinum AMEX don't carry balances, evah.

Has Amex for years but the rewards were note well suited to me. But you can use rewards points to pay off the annual fee.

Moved to Capital One recently and it’s a much better value.

I travel (or used to) a lot and I always book top hotels via their TravelAmex site because they upgrade you, give you $100 and get breakfast. It is a great deal if you travel a lot.

Yeah if you travel a lot, use Uber, use the the $200 airline credit, charge your streaming services to it (new benefit since the pandemic), cash out your points and pay in full each month the yearly charge is a wash. (Carrying a balance on an AmEx has always been inadvisable. It’s a charge card, not a credit card)

And you don’t have to just stay at Hiltons. The complimentary Hilton gold status is one benefit, but as R8 stated on the site they have lots of special deals including the fine hotels and resort packages.

The cash back on the Chase Sapphire though is more generous.

Another benefit of Amex: if you are ever overbilled, incorrectly billed, have your card info stolen, etc. they are great at getting your money back for you, few questions asked.

And they pay for your Global Entry membership and will help arrange medical treatment if you get sick overseas.

Agreed the customer service is outstanding.

Like the others, I capitalize on the benefits - and never, ever carry a balance on my Amex or my American Airlines miles CC. Debt is how the man keeps you down.

I don't use the points for free travel, as I have a shit ton of miles from my AA card and from work travel (pre-pandemic I fly about 150k miles a year, minimum). I use it the points for gift cards for myself and family. Every few years I get my partner's mom a new wallet and fill it with gift cards so she can take herself on a few shopping sprees.

I probably can't make you understand, but my husband and I are AmEx loyalists. It's mostly about service and ease. There is no spending limit, we are forced to pay it off each month, every dispute has been painless and decided in our favor, they are experts at fraud detection and again, make it effortless to resolve. Their fraud people have phoned or texted me within minutes of a wrongful use. I don't even think we've ever even looked at our points, so I'm going to do that right now. Also, maybe one of us will upgrade to Gold or Platinum. It may be worth our while. We use it for household expenses, restaurants, and flights. When we need credit, we use a credit card.

OP I love Brian Kelly, The Points Guy. He is gay gay gay --- out out out --- and smart as fuck. Everything I know about credit cards, I learned from his site.

I have learned to let the credit card match your lifestyle (in terms of your spending habits and plans, not your attitude).

I have also learned to really charge everything because there is no reason not to. I used to be the person who reached into my Birkin to pull out some loose bill for a small Rite Aid purchase: no more. All of that adds up and I want points instead.

I have also learned that credit cards are a moving target, they are warring with each other over capturing consumers so it is best to stay aware of changes and offers. I have four credit cards. They all have various temporary, smaller offers but as far as Points:

1-I have an Amazon branded Visa is for all things Amazon only, including streaming. You get extra points for Amazon purchase that turn into extra amazon dollars. Sometimes I let them accumulate and just have them pay for my Amazon purchases for a few months. No fee card.

2-I have a Chase business card solely for eligible business expenses (everything from Staples to a printer I work with). No fee.

3-I have another Chase card which I use for almost everything - it has a great travel points program, which is the reason you do it. They give extra points for your travel expenses (which to them includes Uber and Lyft.) They always have an intro of anywhere from 60,000 to 100,000 point upon joining. 50,000 points is worth about $750 in travel. I have had a huge number of points accumulate since Covid. I'm holding out for a big ass vacation. At this point my points could pay for two first class tickets to Hawaii and most of a 5-star hotel. It has fees, which if you charge a lot is insignificant because of the points you get.

4-I recently received a great offer from Amex Platinum. Tons of points up front and 10x points for 6 months on grocery and gas. This is pretty epic and I have now moved my gas and grocery purchases from #3 above to this. There is a fee.

I have learned a shit-ton about this stuff in the last few years, was completely disinterested before. I have also "trained" lol my husband to do the same with his additional cards (particularly #3 and #4). This stuff works best if you are disciplined about it.

[quote]1-I have an Amazon branded Visa is for all things Amazon only, including streaming. You get extra points for Amazon purchase that turn into extra amazon dollars. Sometimes I let them accumulate and just have them pay for my Amazon purchases for a few months. No fee card.

Not smart NEVER use points/dollars you accumulate on a card to make purchases. Then you lose out on the 5% (or whatever) cash back on those purchases. Get a statement credit or cash instead.

Many AmEx cards have no annual fees. I have three: Optima, Charles Schwab, and Blue Cash Everyday.

AS others have said, you have to look at the benefits and see if they justify the fee. If you travel a lot and have either a sizable expense account (that lets you use your own credit card) or a relatively large income (at least 6 figures), these high fee cards can work for you. For most people, they probably are a needless extravagance.

I have the Hilton Amex which pays for itself in terms of what I need and the fee is about the same as other "affinity" credit cards like my United Airlines Chase card which, again, serves my purpose.

Fees are for suckers.

The travel benefits are great for Amex Platinum. You get automatic membership in the higher tier of loyalty programs at car rental and hotel chains... For instance, you become National Car Rent Emerald Executive Club which gives you the automatic right to reserve a midsize car for any rip but then have your choice of cars from the "Executive Aisle" at the facility. Most recently I rented a mid-size and ended up with a very nice loaded SUV.

You get uber credit every month. You get airline change fee credits of $200/year (much more valuable before covid). You get access to their fine hotel/resorts program. For travel to Atlanta last week I got an upgrade to a suite and free breakfast (which would have cost literally 65 bucks at this very nice hotel.

They were giving you logo in-flight internet for a while but I think that perk has gone away?

Whatever it ends up costing in terms of annual fee, seemed to be worth it for the benefits.... even if it wasn't a dollar for dollar value, you cannot buy Hilton Gold or access to Delta's Sky club but you get these automatically.

That being said, if you don't pay your bill in full every month and/or you don't travel a lot, this is not the card for you.

R2- When I built my house, I used my AMEX card for buying materials and paying for services whenever possible. (I was my own GC) I put all of my entertaining, groceries and travel cost on it and I pay it off monthly incurring no costs. I currently have 1.2 million miles for upgrades and tickets when I start the serious travel again. I understand that people often have unexpected expenses come up and they use a charge card to pay it off over several months. But, thats the easiest way to get in financial trouble. The 'loan' rate you're paying is the worst possible.

If you can't pay something off at the end of the month, you really should assume you can't afford it.

Amex is a charge card with services essentially- there are equivalents among the credit card companies. It’s worth it to me because they are much more responsive to lost cards, fraud, etc, much more. I don’t run balances at this stage of my life and I appreciate the services, like the Travel Service.

You have to decide what’s best for you. Charge card discipline might be a good way for some to control their spending. I have a VISA Sapphire but only use it when I cannot use the A/E. It’s also a charge card, not a credit card.

I love the idea of a new wallet and multiple gift cards. That's really nice!

Just curious... any of you folks at Flyertalk (where they have detailed credit card discussions)?

I'm not a power user like some of you. I'd rather pay my expenses as I go rather than have to pay $1000 a month or whatever to AmEx at the end of every month. I guess it's a holdover from being poor and never knowing how much would be in the bank at payment due time. I keep a Delta AmEx simply for the airline perks like one free checked bag per trip. It pays the $100 annual fee after a couple of trips (in normal times).

R19 I'm not getting what the problem is with accumulating 600,000 in points over three years (about $550 a year / $1,650 in fees total for 3 years) which can be converted into about $9,000 in travel. It all depends on how much you are spending.

R15 It works fine for the Amazon Chase Visa which I use strictly for amazon and amazon prime--its 5 times points for every dollar of Amazon purchase. If I used a random credit card for Amazon purchases, I would get fewer points per dollar for the Amazon purchases.

r22 Only certain AmEx cards are "charge cards" (i.e., you have to pay off the balance at the end of the month.) They have MANY regular credit cards.

r27 You seem to be missing the point. You should NEVER use your rewards to buy things because you lose the 5% cash back you'd get if you bought them with the card. Make ALL of your Amazon purchases with the Chase Amazon card. Convert the rewards to cash or a statement credit. I'm not sure why this is a difficult concept to grasp. I'm not talking about using a different credit card.

If you have to ask…. 💳

[quote]I love the idea of a new wallet and multiple gift cards. That's really nice!

I've come to hate gift cards, because I lose out on any benefit I'd get from using my cash-back/rewards credit card for making purchases on a gift card. I get 5% back at places like Amazon and Target; a gift card doesn't give me any benefits. Even my worst credit card gives me 2% back on everything (Citi Double Cash MC).

R29 Melissa Ann: take a Klonopin and calm the fuck down. You sound like a sweet, calm, and generous person—perhaps a schoolteacher or caregiver?—so we may be having a jargon issue here. As i so generously outlined earlier, it does make sense but only for the Amazon purchases.

This specific card give you the same back whether you are using it directly toward Amazon purchases or for cash-back. Since I make a lot of Amazon purchases and since there is no difference, I use it directly for Amazon purchases.

"How to redeem points: When you’re ready to redeem the points you’ve earned with the Amazon Prime Visa, there are a number of different tracks you can take. No matter what you do, you’ll receive a flat value of one cent each for your redemptions. The easiest method is simply redeeming your rewards for Amazon purchases. There is no minimum amount of points required, and you can use them for all or part of your purchase. If you’d prefer cash back, you can deposit your rewards straight to your account. You can also redeem for gift cards with a minimum of 2,500 points."

Everything else I charge "depending on the type of purchase" is charged to another card.

I agree it's still a prestige thing coupled w/generous member benefits (e.g., free access to many airport lounges), as well as company-issued AMEX cards for employees who traveled extensively. I rarely used mine and opted for personal cards to accrue miles/credits since paid entire balance monthly

[quote]I've come to hate gift cards, because I lose out on any benefit I'd get from using my cash-back/rewards credit card for making purchases on a gift card.

R31 So you would rather pay for something in order to receive a pittance in return than use a gift card and PAY NOTHING.

Yikes.

Class warfare: Credit Card Edition! (or should I demonstrate a class and write "addition" instead of "edition?")

Bottom line: paying your full balance monthly is the way to go and the way it used to be. Of course, that is easier said than done. Realistically, the US economy has been positively elevated by credit card (and other) debt since the 1980s when everything changed and credit card offers went to everyone.

Having no fee cards and paying your balance monthly is the way to go if you don't want to get into debt. I remember the days when I knew I was charging a vacation I could not afford but I had a plan to pay down the credit card after four months, and I did. But since the 1990s everything we see tells us our home and ourselves and our activities need to be a certain way and the banks are happy to oblige.

Debt is a horror that is hard to get out of. Once you cross a threshold, you just keep accumulating debt because the "what difference does it make?" syndrome sets in.

As far as fee cards and points, they serve those who can afford them and utilize the perks. Like everything else, credit cards with fees are generally designed to benefit those who least need the benefits.

As far as Amex, lest we forget it used to compete with Diner's Club, albeit with a travel slant. Hence Amex's dusty old language about "membership" because of course American Express is not and never was a bank. American Express is finally getting in on the act and competing with bank cards. Their big issue remains the cut they take from merchants, which used to be (and I assume still is) higher than the bank cards, hence many merchants don't accept it.

R35 The real Class Warfare is being able to pay for more service up front or for better quality (ie service.) Bargains and cheap and points and thinking you're getting something for nothing is the American Way. Merchants who take American Express also get the same service (not waiting on hold, employees who speak English, excellent fraud detection) as cardholders. I'm not rich, but I'm old, and those values are still important to me.

If you use the cards wisely, the benefits far outweigh the fees. I'm baffled by people who pay with debit cards. Why not let someone pay you to spend your money?

I like the travel benefits with Amex platinum. They have a number of luxury hotels in each city where if you stay two nights the third is free. Also you get $100 credit to spend at the hotel, usually an upgraded room and a good credit for breakfast at the hotel restaurant or room service each day. Add in the travel perks centurion lounge, $200 annual refunds on incidental airline fees, Uber credits and it easily pays for itself.

Having been poor and being comfortable now, I absolutely agree with the above that the financial benefits are aimed at the people who least need them. Being poor is so expensive; interest charges, fines, no ability to in bulk or advance. The more money you make the more people want to give you free things.

^ absolutely true

The fee for my AMEX is refunded to me yearly by my brokerage house. One of the perks for keeping $$ with them.