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Amex upgrading Gold customers to Preferred Rewards Gold – a good deal?

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Reader Kim got in touch to ask my advice on a letter she received from American Express.  She has a Gold card  – the old style one, no longer available to new customer.  This is different from the ‘Preferred Rewards Gold‘ which has been the card they have been pushing for the last couple of years.

Amex is forcibly upgrading all Gold card holders to Preferred Rewards Gold from 1 October.  Kim wanted to know if this was a good deal or not.  Frankly, I was not impressed.

Fundamentally, you should not be paying an on-going annual fee for a credit card unless the benefits are easily worth the fee.  And the Amex Preferred Rewards Gold does not deliver. 

What are you getting?  OK, 2 Membership Rewards points per £1 on travel and foreign spend is good, but only 1 on most other purchases.  2 airport lounge passes is worth taking but hardly worth a fortune, especially as you can’t use them in Heathrow Terminal 5.  And the insurance offered is not a replacement for full travel insurance and seems very similar to what is offered by other credit cards.

Let’s compare the Preferred Rewards Gold to the BMI Amex.  If Kim cancels her Gold, she will save £125 a year on fees.  The BMI Amex has no fee, offers a 20,000 mile sign-up bonus (convertible to 20,000 Avios) and pays 1.5 miles per £1.  This is 50% more than the Preferred Rewards Gold on most spending, albeit less – but not much less – on travel and foreign spend.  The Preferred Rewards Gold card does offer a 7,500 point bonus if you spend £15,000 on it per year, but this is not an easy target.

Kim could also consider the £85 fee version of the BMI Amex.  This comes with an extra 4,000 miles for signing up, and earns 2 miles per £1 on all spending, instead of 1.5 miles per £1.  If you are spending £10,000+ a year on the card then this version may be better for you.

Assuming that Kim is using her Membership Rewards points for Avios, I would recommend cancelling – although she will need to empty out her Membership Rewards balance first.  If she is using her MR points to convert to a different partner which does not have its own UK credit card (eg Singapore Airlines) then it is a different question.

Despite the comments above, I DO strongly recommend the Amex Preferred Rewards Gold to new cardholders.  There is no fee for the first year, and you get 20,000 Membership Rewards points.  But Kim is in a totally different position, with no bonus and no fee waiver.

Want to earn more points from credit cards? – January 2021 update

If you are looking to apply for a new credit or charge card, here are our January 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here.

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these:

American Express Business Gold card

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history.  By recommending credit cards on this site, I am – technically – acting as a credit broker.  Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.

Comments (1)

  • Regarding the Preferred Rewards Gold card, not that it is not actually “2 Membership Rewards points per £1 on travel and foreign spend”.

    Rather it is 1 extra MR point on:
    – Travel
    – Foreign Spend
    – Supermarkets / Petrol (in the first year)

    And these stack!

    Hence, if you do spend a lot on foreign travel (i.e. hotels while abroad or foreign booked travel) or supermarkets/petrol abroad then you are effectivly getting 3 MR per £1.

    Which (if convered direct to Avios) is twice what you get on the free BMI card, possibly more as you can hold in Memebership Rewards points for any conversion bonus to come along (or to top up any other scheme).

    If you are willing to put a value of 1p on a MR point, then you are effectivly covering your 3% fee on the card, and the possiblity for true positive earning comes when a good conversion bonus appears. [If you have no immediate need.]

    Indeed, as long as the foreign spend is travel or supermarkets (or petrol) I always put it through my Pref. Rew. Gold card rather than my no-forieng fees Visa Debit,

    Both I consider to initially be zero cost (+3MR but 3% fee vs nothing), but the potential to earn with a conversion bonus later.
    [Need to offset the fact that the 3% outlay at time of purchase could be earning interest/return somewhere else, but I still do it.] Or if the spend including fee can be reclaimed on expenses, etc.

    For people who spend a lot abroad, either travel or supermarkets and petrol, it can be worth having.

    But I do completely agree that Amex annual fees have got out of hand, especially for a card type that has lower levels of acceptance by merchants and sometimes higher usage surcharges for customers.