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Five reasons why you should keep your Amex Gold card after the free first year

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Last week I did a piece for This Is Money about the American Express Preferred Rewards Gold credit card, to help a reader who was unsure whether he should retain the card after the free first year.

You can read the This Is Money article here but I thought I would run through the key points here for the benefit of HfP readers in the same boat.

With the 2019 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.

Amex American Express gold

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.

Note the interest rate information below:

Nectar American Express

American Express Preferred Rewards Gold

Read our full reviewApply here

Other information:

  • Amex Gold is our recommended ‘first card’ for a miles and points beginner
  • You receive two free airport lounge passes when you sign up, and a further two passes each year if you renew
  • After your two free passes, you can visit further lounges for a small fee
  • Annual fee: Free for the first year, £140 from Year 2

Representative 56.6% APR variable, from Year 2, based on a notional £1,200 credit limit and £140 annual fee. Interest rate on purchases and in Year 1 22.2% APR variable.

See if you qualify for the 20,000 points sign-up bonus +

You will receive 20,000 American Express Membership Rewards points as a sign-up bonus on the American Express Preferred Rewards Gold card if you spend £3,000 within 90 days of signing up.

Membership Rewards points are hugely flexible, which is why we recommend this as the best choice for your first miles and points card.  You can transfer them into Avios, Virgin Flying Club or other airlines (at 1:1) or into various hotels schemes, into Club Eurostar or use them for shopping vouchers.

To qualify for the bonus, you must NOT, currently or in the previous 24 months, have held any other personal American Express card.

You are OK if you had a supplementary card on someone else’s American Express account.

You are OK if, currently or in the previous 24 months, you have held a Business American Express card.

For clarity, you can still apply for the American Express Preferred Rewards Gold card even if you do not qualify for the bonus.  You would still benefit from the two free airport lounge passes and the ‘no fee in Year 1’ offer.

Learn more about the card benefits +

American Express Preferred Rewards Gold comes with two free airport lounge passes.  These allow either you and a friend, or yourself twice, to visit any lounge in the Lounge Pass network.  You make additional lounge visits for £20 per person.  You receive an additional two free passes each year.

You earn double Membership Rewards points on all airline spend (made directly on an airline website) and all spend made outside the UK.

If you spend over £15,000 in a card year, you will receive an additional 10,000 Membership Rewards points when you renew.

Other benefits include a 10% discount on Hertz car rentals and special deals at 350 selected hotels worldwide, where Preferred Rewards Gold cardholders receive a $75 in-hotel credit per stay.

What happens after Year 1?

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 how to save your Membership Rewards points 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 ……

Amex Reward Credit Card ARCC

American Express Rewards

Read our full reviewApply here

Other information:

  • Your best choice if you want a ‘free for life’ card which earns Membership Rewards points
  • A good choice if you want to close a Gold or Platinum card but keep your points intact
  • Annual fee: Free

Representative 22.2% APR variable

See if you qualify for the 10,000 points sign-up bonus +

You will receive 5,000 American Express Membership Rewards points as a sign-up bonus on the American Express Rewards card if you spend £2,000 within 90 days of signing up.

Membership Rewards points are hugely flexible. You can transfer them into Avios, Virgin Flying Club or other airlines (at 1:1) or into various hotels schemes, into Club Eurostar or use them for shopping vouchers.

To qualify for the bonus, you must NOT, currently or in the previous 24 months, have held any other personal American Express card.

You are OK if you had a supplementary card on someone else’s American Express account.

You are OK if, currently or in the previous 24 months, you have held a Business American Express card.

For clarity, you can still apply for the American Express Rewards card even if you do not qualify for the bonus.  You may want to do this if you are thinking of swapping your Preferred Rewards Gold or Platinum card for a free alternative, and would prefer to keep your existing Membership Rewards points balance alive.

Learn more about the card benefits +

American Express Rewards is the only ‘free for life’ American Express card which lets you collect Membership Rewards points.

We do NOT recommend this card if you would also qualify for the sign-up bonus on American Express Preferred Rewards Gold.  The Gold card is free for the first year, comes with two free airport lounge passes and has a higher sign-up bonus of 10,000 points.

The best reason to get American Express Rewards is if you are coming to the end of your free first year with American Express Preferred Rewards Gold, or no longer want to pay the fee on The Platinum Card, but want to keep your Membership Rewards points intact.

…….. 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.

You can apply for American Express Preferred Rewards Gold here.

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 (47)

  • Paul says:

    Under the current climate with restricted travel (or no existent travel). I seen no reason for this card. I am waiting for a large refund to mine. Once I get that I will cancel and get some money back pro rata.

    • babyg says:

      you dont need to card to be active for a refund… you can cancel and leave the card as cancelled in your app, and then move the refund to an active card.

  • Gavin says:

    Just about to cancel my Gold (my annual fee was taken a month ago and my 10000 MR points posted over the weekend).

    Couldn’t find a definitive answer to this one: what happens to my two new airport lounge passes? Do they disappear as soon as I cancel my Gold?

  • Andrew (@andrewseftel) says:

    Given the same underlying earning rate as the Rewards Credit Card, I think the problem is best framed as whether you’d pay the marginal £140 fee to get the marginal benefits:

    – 10k points on £15k spend
    – 2 Lounge passes
    – Double points on airline/FX spend
    – Extra 2k points for a referral
    – Marginally better insurance (you missed this in the article)

    Feels pretty close to me if you can do the £15k spend, but hard to get too excited about the value on offer.

  • Pri says:

    What about the Gold Business card are there any reasons to keep it after the first year?

    • memesweeper says:

      I asked the same thing @pri, and the answer seems to be a solid ‘none’.

      • Donna says:

        The choice of lounges has been poor in my experience. Hard to justify the fee for the minimal benefits it provides when compared to the free card.

    • Rob says:

      Not many, especially as you cancel and reapply after 6 months to get the bonus.

  • Naveen says:

    What benefits does a supplementary Gold card (from Platinum) get?

  • WZ says:

    If I haven’t used my 2 lounge passes, when the card renews do I now get an extra 2 passes bringing my total to 4? Or do the passes expire at the end of each year?

  • cinereus says:

    It makes most sense to just cancel the card and reapply a week later to get two more lounge passes.