Five reasons to keep your Amex Gold card after the free first year

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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 

Full details of the card, and the application form, are on the American Express website 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.

Amex Gold 350

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’ programmedetails 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.)

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Comments

  1. Hi. I am in my second year holding a hold card but didn’t use the lounge passes last year. Do I only get 2 free passes this year or do last years roll forward too so that I have 4 now? Thanks in advance !

  2. Qwerty Bertie says:

    In terms of holding long-term, it would be good to consider it in comparison to the green card. Assume for the sake of argument that the holder only earns at the 1x rate, and put to one side the other supposed benefits of the gold card*, then with green you break even on £6k spend, but on gold you break even on £14k spend or, if hitting the £15k anniversary target, make about 11k MR profit taking in to account a small allowance for the rounding down effect mentioned earlier in this thread.

    *Which seem very weak to me.

    • Qwerty Bertie says:

      Now go a step further, and you can see that for those with more modest spending power and who don’t have a sign up bonus option due to recent changes, or who are against churning as a matter of principle/won’t wait for one, and who aren’t swayed by the frills of gold or green, then a clear winner emerges in terms of the best long term card for fee to MR ratio: the ARCC.

      • Not sure the ARCC card is a long term keeper but as you suggest it may be dependent on your spending behavior. Another consideration is how long you like to keep your MR points banked in Amex. Personally not happy running large balances.

        • Qwerty Bertie says:

          I’ve only been around a year and a bit, as a travel points collector; I’ve been aware of recent devaluations in some airline and hotel programmes, plus Tesco, but I’ve not yet experienced any devaluation of MR. Has it happened much in the experience of those who’ve been doing this for several years or even decades?

        • Peter K says:

          Over the past 6 years no devaluation in MR in that you get the same in those hotel/airline programs as before. The programs themselves however have devalued thus MR have also become less valuable.

        • I haven’t being doing this long either Qwerty so not sure about the devaluation side. However when I took my first amex card out I didn’t realize they like to test you first to see if you are good for the money. I put a couple of grand through the first few days and they blocked the card pending review. The review went badly in that the operator had prejudged me as probable fraud and addressed me accordingly. Long and short I paid the balance off over the phone and without notice they cancelled the card including the bonus I just achieved. I didn’t chase it as it’s more valuable as a reminder not to keep high balances of anything anywhere.

        • I am FAR happier running an MR balance than an airline balance.

        • Doug M says:

          Having an MR balance obviously offers flexibility, and that has value. But they in effect devalue every time the things you convert them to devalue.

        • Doug M says:

          @Qwerty – Points are great, and you can get real value sometimes, often something like an unavoidable short notice need to travel, prices crazy, but there’s an Avios option. What you can’t do is assume that having 250K Avios will get you a pair of long haul flights when you want. But, having said all this cash in most situations offers a lot more choice.
          Maybe it doesn’t work for you, but BAEC is excellent for European options and taxes are £35 or £50 for Club. The value of Club on short haul is a very personal thing, largely worthless to me as I get a lot of what it offers from BAEC status.

        • Genghis says:

          @Qwerty as already mentioned, having reasonable points balances are useful for when flights / hotels are pricy for cash. But not too many so as to avoid significant devaluations. Earn and burn.

      • Shoestring says:

        SSC. Stash & Save the Cash, Qwerty – without a reasonable stash you can’t take advantage of the opps when they come up – or immediate flight needs, perhaps at peak.

  3. OT- BA Amex(free) and BA PP are now treated as 2 standalone cards for the purpose of companion voucher!

    My new PP card arrived today – cumulative spend on my blue card was NOT transferred over and starts at zero again towards my 241 voucher. This even has a different limit to my existing card and both cards are added to my online profile at the same time

    Huge blow for people who does the £10k upgrade trick….not that i do it, but it does take away lot of flexibility to be able to use blue card to defer triggering the voucher and extend the expiry as late as possible

    • Louise says:

      Interesting development!

    • Did you apply online for the BAPP or did you ring them up to upgrade? My understanding of this trick is that you need to ring them up rather than applying online as that would be treated as a new application

      • I applied online rather than phoned up- but that didnt make any difference in the past.

        The only thing that was odd this time is that I wasnt asked to provide any details on existing cards. Hopefully mine is an exception rather than the rule

    • WHAAAAAAAAAAAATTTTTTTT?????!!!!!!!!!!!

    • David H says:

      This is major if true. Would welcome comment from Rob / others

      • That sounds more like a mistake to me. Amex, very often, fails to recognise existing cards and this is what would happen here if they didn’t spot the current one.

    • Nick_C says:

      Is the start year for your membership correct on the new card? You should call Amex, in Brighton, and talk to them about this.

      • Ok thanks all, I’ve called up Amex to sort this out. They’ve now cancelled my new PP card and upgraded my Blue card instead to make my cumulative spend still carries over.

        For the moment – nothing has changed! Sorry for the false alarm

  4. Ricatti says:

    140GBP annual fee on Gold = fee on AMEX Platinum in USA minus benefits (200USD airline credit, 200USD Uber credit, 100USD shopping credit at Saks).

    So by holding a Gold card you are really stuck with an inferior product and local optimum.

    P.S. Collection of offers to the US consumer is outstanding.

    • Julian says:

      And the fee on the UK issued Platinum is way too expensive for a single person, although not for a married couple with two kids like Rob and his family………………….

      • We don’t always take families with us. A single traveler could easily get value from a Platinum card if they took a few short hops in economy to mainland Europe every month. One of those cards where the more you use it the more reasonable the fee becomes.

        • Doug M says:

          More you use the benefits the more value you get. It’s a poor card to spend on.

      • Nick_C says:

        I personally found the Gold benefits (more MRs on travel) better than the Plat ones.

        • Doug M says:

          Yes but that’s spend, not a benefit. Platinum has unlimited access to a wide range of lounges versus two visits on gold. There’s a host of other benefits that make Platinum better than gold. But gold is a better card to direct spending to as airline/foreign spend is better rewarded.

    • Totally different market though – much bigger interchange fees in USA to cover cost of benefits. Look at the amazing Hilton card they have!

    • If shops were paying 3%+ here to accept Amex cards, the offers would be outstanding too.

      • Nick_C says:

        Aren’t they? I used to do some work for a small retailer in Central London. They were paying 5% on Amex, and 2.9% on MC/Visa. I stopped Amex and it didn’t make any difference to sales. (I also found a much better deal on MC/Visa)

        • We pay 0.5 or 0.6 on visa or MasterCard and less than 1% on Amex. Debits are 0.3 or just above.

    • Ricatti says:

      @All So here is the strategy for a high-ish spender:

      Keep AMEX Plat for the benefits and especially family travel insurance, and re-apply for Gold card to be used for spending (annual bonus) / particularly travel spending (extra MR).

  5. Julian says:

    Rob,

    The renewal is only 0.6666 membership points per pound spent and not 1.6 as you state (which would actually have been 1.5 and not 1.6 if you did your sum that wrong way round). Some difference I think.

    You appear to have done your sums the wrong way round unfortunately………………………….

    The BAPP would be the best card for me (when Lloyds finally revokes my Amex card with them, which is still valid but I note has an expiry date of 08/19 that it may perhaps not survive), except that I generally travel solo. I don’t know why Amex can’t also let you get two one way flights for the price of one instead of requiring you to take a Companion with you on a return flight……….

    • Peter K says:

      I don’t get your maths sorry Julian.
      £15000 didn’t in a year. 25000 points earned (inc bonus). That is not 0.66667.
      Rob was pointing out what you would have earned in year one from the card.

      • Julian says:

        Actually the fee in year two is £140 and 10,000 Avios received so the cost is actually 1.4p per Avios earned and as its no longer possible to burn and churn this doesn’t seem like a very good deal.

        However obviously the 10,000 membership rewards in year two is designed as some kind of nod towards Amex’s poorer Avios earning rate of only 1 Avios per pound spent compared to 1.5 Avios per pound on the £160 BAPP card. But as that card also has the 2 for 1 upgrade voucher for spending £10,000 it has to be by far the better bet overall, except for single people always travelling alone once the Lloyds Rewards Amex card is no longer available.

    • AndyGWP says:

      Lloyd’s should have sent you a letter about your card and it’s survival (or perhaps more appropriate terminology would be its “replacement”)

      If you haven’t received a letter yet, then you’re either having your card closed later than most of us, or your postie dropped the letter in a puddle.

      • Julian says:

        I am in the group of people (there are still a significant number of us) who have not yet been sent their letter by Lloyds giving two months notice of replacement of the current Amex and Mastercard with a new single Mastercard now earning 0.4 Avios per pound spent and with no fee but with no fee free foreign exchange and no flight class upgrade voucher.

        Although my current cards expire in 08/19 it seems perfectly possible that they may be replaced as the card replacement cycle window is substantially longer than the time being taken to close the Lloyds Avios card products.

  6. Martin W says:

    Hi. Do I take it that if I renewed and received 2 lounge passes, these would disappear when I cancelled the card if I had not already used them?

    • Colin JE says:

      Yes

      • Martin W says:

        OK. Thanks. Thats news to me. I always believed once you had them, they were yours to spend any time in the 12 month period, irrespective of if you still held the card!!?

        • Peter K says:

          The lounge card is linked to the underlying Amex card. Any extra visits (beyond the two free ones) to a lounge using it is automatically charged to that Amex. It makes sense therefore that when you cancel the Amex you lose the lounge card…and indeed this is what happens.
          Likewise, the priority pass with the Platinum card stops as soon as the Amex is cancelled.

  7. Colin JE says:

    I didn’t know about the Amex Gold Hotel Programme, but have previously avoided booking through third agents because I’d lose status benefits and points. If booking through Amex Gold Hotel programme do you still keep these?

    • Yes. As with Amex FHR for Platinum cardholders.

      Note that any GENERAL hotel booking made via Amex Travel will not earn you points or status benefits.

    • Nick_C says:

      The hotel I used in NY last year (Omni Berkshire Place) was availability through Amex Travel both within and outside the “Hotel Collection”. The HC price was about £200 more for the four night stay. Not worth in my opinion.

  8. illuminatus says:

    OT – will I get the welcome bonus on HSBC Premier World Elite if I currently hold the free HSBC Premier card?

  9. Paul J says:

    Hi,
    Does anyone know if Amex would consider that having had a card in the UK counts in the 24 months rule applying to get an Amex in France, such as the Gold card? Only condition there is a revenue of €20k and a French bank account ?

  10. Yorkieflyer says:

    I just wondered whether you get any points for adding a supp to the free BA card or the nectar card?

  11. Nick_C says:

    Free BA gets you 1000. Nectar gets nothing. See https://www.americanexpress.com/uk/benefits/supplementary-cards/index.html

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