I get quite a few emails from holders of the American Express Preferred Rewards Gold credit card asking what they should do after their first year.
With the recent changes to the American Express sign-up rules, which mean that you can no longer cancel your Gold card and reapply six months later (you now need to wait 24 months to get a fresh sign-up bonus), it is worth thinking about whether holding the card long term is a better approach.
This article was amended on 16th April to reflect the change to the sign-up bonus.
What are the benefits of signing up for Amex Gold?
The package you get for the first year of holding this card is excellent. You can’t deny that. Among the benefits are:
You don’t pay a fee for your first year
You receive 10,000 American Express Membership Rewards points after you spend £3,000 in your first three months. These convert into 10000 Avios, 10000 Virgin / Emirates / Etihad / Flying Blue etc miles, 20000 Hilton Honors points, 15000 Marriott Bonvoy points, 30000 Radisson Rewards points or many other things.
You get two free passes to get into selected airport lounges – the directory is here
In order to qualify for the sign up bonus, you cannot have held any personal American Express cards in the past 24 months. Cards issued by MBNA or Lloyds Bank do not count.
I am legally obliged to tell you that the representative APR is 57.6% variable, including the annual fee (free in year 1), based on a notional £1,200 credit limit. The interest rate on purchases is 22.9% APR variable.
After the first year, you need to make a decision about whether to keep the card or not.
Many people baulk at the idea of paying the £140 fee, especially if they are not used to paying fees for credit or charge cards. Whilst the easy answer to those readers who contact me would be ‘cancel’, it is worth looking objectively at the ongoing package – especially if you are not the sort of person who likes to churn his or her card portfolio regularly.
Good reasons to keep Amex Gold beyond Year 1
Reason 1: the annual bonus of 10,000 Membership Rewards points
If you spend £15,000 on the card in your membership year, you will receive a bonus of 10,000 Membership Rewards points about four weeks after you renew. In the most extreme case (ie you spend exactly £15,000 per year) this makes your earning rate on the card 1.6 Membership Rewards points per £1, made up of 15,000 base points and the 10,000 bonus points. This is an impressive earning rate – in fact, it would be the best earning rate of ANY travel rewards credit card.
Even if you are determined to cancel the card, it would be madness – if you had spent £15,000 – not to wait a month until the bonus arrives. You will get a pro-rata refund of the 2nd year fee when you cancel, which will only be about £12 by that point.
Reason 2: two more free Lounge Club airport lounge passes
You receive another two airport lounge passes when you renew. These are worth around £40. It would be odd to cancel your card at renewal if you knew you were travelling in the next month or so and could use the Lounge Club cards. Roll your Amex Gold over – you still have the option of cancelling later after your lounge visit.
Reason 3: you don’t need to empty your Membership Rewards points account
You keep your Membership Rewards points alive. If you cancel your Amex Gold, you will need to transfer your Membership Rewards points out. This gets rid of the main benefit of Membership Rewards points – flexibility. Keeping your Gold card means you can keep your Membership Rewards points account open and so keep all of your options for the points open. (One option to get around this is to open a FREE Amex Rewards Credit Card instead – I explain why in this article.)
Reason 4: you retain access to the Amex Gold hotel programme
You retain access to the other, often forgotten, Amex Gold benefits. The most interesting is ‘The Hotel Collection’ programme – details here. This gives you an upgrade and up to $100 equivalent credit when booking a 2+ night stay at participating upscale hotels. Chains taking part include Radisson Blu, Omni, Kimpton, Hilton, Sofitel and many more. There is also a 10% Amex Gold Hertz discount, although I admit this can probably be matched by other deals you can access.
Reason 5: if you have no other Amex, you retain access to Amex’s valuable cashback deals
If Preferred Rewards Gold is your only American Express card, you retain access to the wide range of Amex cashback deals which are permanently available. Even if you do have other Amex cards, you can double up on deals which interest you if you have multiple cards available.
There are other smaller benefits too:
You retain access to the refer-a-friend programme which earns you 6,000 Membership Rewards points for each new American Express cardholder you sign up. You will receive the referral bonus even if the person you refer does not qualify for a sign-up bonus.
If you spend a lot on flights, the ‘double points on all airline spend’ benefit will add up. You don’t need to book via Amex Travel to get this, it is automatic for spending on all airlines.
There are other ways of accessing some of the benefits above, of course. The Amex Rewards Credit Card will keep your Membership Rewards points alive. I also accept that, if you don’t spend £15,000 per year to trigger the 10,000 bonus points, the maths probably doesn’t work unless you use ‘The Hotel Collection’ programme and the airport lounge passes.
If you do spend £15,000 to trigger the annual 10,000 Membership Rewards point bonus, however, there ARE merits for keeping your Amex Gold card open long term.
(Want to earn more miles and points from credit cards? Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)