2019 American Express Gold Card - Deep Dive
To the Point
The American Express Gold card has been refreshed in October 2018, and Amex has been on quite the launch campaign to show consumers how valuable its new benefits are. It’s an evolution from the former American Express Premier Rewards Gold card, which used to have a lower fee but fewer benefits. The current generic sign up bonus is 35,000 Membership Rewards, worth approximately $700, but some referral bonuses (such as the one with our referral link) increase the offer to 40,000 Membership Rewards, which is worth around $800. With such a strong sign up bonus and recurring annual benefits, this card practically pays for itself. Don’t take our word for it, read below to make sure this card adds up for you (spoiler alert: it will!).
While the target demographic for this card appears to be Millennials, given that its best rewards earnings is focused on dining, groceries, and travel, plus it’s currently available in a limited edition and the ever-trendy rose gold color, it’s an excellent mid-tier card for anyone. The card itself is a sturdy metal, in both the gold and rose gold offerings, and has the classic and elegant American Express design stamped with the centurion logo. For a mid-tier card, this metal card is quite more substantial then the Chase Sapphire Reserve, but not as thick and heavy duty as its big brother, the American Express Platinum Card.
The card comes with a $120 annual dining credit and a $100 annual airline credit. That totals to $220/year in credits, thus making the $250 annual fee only a net $30/year. That $30/year is easily offset by the generous sign up bonus offers.
If you’re like most people, one of your biggest expenses is food, especially if you have a family. If you travel a few times per year, spend mostly on dining and groceries, this card is a no-brainer and you’ll easily come out ahead of the annual fee.
Value Proposition
At the Point Passport, we like to make the value proposition of the cards we review easy to understand. In order to do that, we break down the value into two parts: the initial sign up and the sustaining costs that occur every year after.
Phase 1 - The Sign-Up Offer
With current sign up offers at 35k, and some referral offers reaching 40k (see link), based on a MR value of $0.02/point, the value is as follows:
35,000 Membership Reward Sign Up Offer x $0.02 = $700
40,000 Membership Reward Sign Up Offer x $0.02 = $800
First Year Benefits:
$120 annual dining credit
$100 annual airline credit
$220 total first year benefits
Sign Up Bonus + Annual Benefits - Annual Fee = Net Cost
35k offer: $700 sign up bonus + $220 first year benefits - $250 annual fee = $670 net value
40k offer: $800 sign up bonus + $220 first year benefits - $250 annual fee = $770 net value
Phase 2 - After the Sign Up Offer (Year 2+)
2nd Year Benefits:
$120 annual dining credit
$100 annual airline credit
$220 total/year benefits
Annual Benefits - Annual Fee = Net Value/Cost
$220 second year (and beyond) benefits - $250 annual fee = $30 Net Cost
Now let’s assume you plan to actually use this card for some food and groceries each year. If you spend $1,000/year ($83/month) at grocery stores or going out to eat, you’ll earn:
$1,000 x 4x MR points = 4,000 MR points
Those 4,000 MR points are worth approximately $80. So updating our formula, we find:
Annual Benefits + Earned MR - Annual Fee = Net Value/Cost
$220 second year (and beyond) benefits + $80 in MR - $250 annual fee = $50 Net value
Depending on your spending patterns, this may or may not make sense for you, but it’s quite easy to break even (the breakeven point is $400 on grocery/food per year).
Primary Benefits
4X Membership Rewards® Points at US Restaurants
4X Membership Rewards® Points at US Supermarkets
3X Membership Rewards® Points on travel booked directly with the airlines or AmexTravel.com
2X Membership Rewards® Points on bookings of two consecutive nights or more made with the Amex Travel Hotel Collection.
$120 Dining Credit earn up to $120/year. $10/month statement credits at eligible restaurants such as Cheesecake Factory, Ruth’s Chris Steakhouse, Shake Shack, and delivery services Seamless and Grubhub.
$100 Airline Fee Credit
No Foreign Transaction Fees
Additional Benefits
The Hotel Collection - $75 hotel credit and free room upgrades when booked with American Express Travel
Personalized Travel Service
Global Assist® Hotline
Baggage Insurance Plan
Car Rental Loss and Damage Insurance
Premium Roadside Assistance
Dropped Your Phone? $10k purchase protection when they’re damaged, lost, or stolen
Return Protection - when you need to return a purchase within 90 days and the merchant won’t let you return it, Amex has you covered (limits do apply)
Did Your Warranty Run Out? Extended warranty, up to two additional years
Amex Offers - discounts on everything from Sephora to Barkbox, and many things in-between
ShopRunner 2 day shipping
Entertainment Access & American Express Preferred Seating
What These Benefits Actually Mean
The primary benefits on the American Express Gold card are focused on travelers and foodies alike, which is backed by the fact that dining and groceries earn 4x Membership Rewards. This is stronger than the Chase Sapphire Reserve’s 3x Ultimate Rewards for dining. Travel comes in right behind, with the 3x Membership Rewards for airfare, which is on par with the Chase Sapphire Reserve for air fare, but it’s limited to just that category whereas the Chase Sapphire Reserve earns 3x in all travel related categories. The annual dining credit can be tricky, as it’s $10/month and only with select restaurants, so make sure you have one nearby that you frequent to take advantage of this perk. If you don’t, you can always order delivery by Grubhub or Seamless to reap the $10/month reward. The $100 airline credit can be used for things such as check bags, in-flight meals or drinks but isn’t a direct airline credit. While technically not allowed, you might be able to get lucky and buy 2x $50 airline gift cards and later use them towards flights.
For the other benefits, you probably will use the Purchase Protection and the extended warranty the most. The premium roadside assistance is nice and can be thought of as a “limited AAA” coverage. The baggage insurance can be very useful in the event that you used your Amex Gold to get those 3x MR points and the airline lost your bags. Amex Offers can be quite valuable and we’ve things from $100 off a Casper mattress to $10 off of a $50 PF Chang’s purchase. One thing to note on the car rental insurance that’s critical, is that this is a secondary policy. That means that if you decline the car rental insurance, your personal auto insurance will become the primary coverage and the Amex will only cover what your primary doesn’t, in the event an accident occurs. This is very different that the full, primary coverage offered by a premium travel card, such as the Chase Sapphire Reserve. In all fairness, comparing that card with the Amex Gold is apples to oranges.
Conclusion
Overall, the Point Passport recommends this card for people who find that a good portion of their current monthly budget is already going to food and travel a few times per year. While it’s not a “full-blown” premium travel card like the American Express Platinum or the Chase Sapphire Reserve, it also doesn’t carry a $450 to $550 annual fee like those cards do. At a $250 annual fee, with a recurring year 2+ cost of $30 (assuming $0/year spend and no Membership Rewards earnings), it sits perfectly at the mid-tier level and the MR earning rate will easily offset that and put you far, far ahead.
From a points earning perspective, whether it’s a trendy and fun restaurant in a big city, or your local Whole Foods in the suburbs, those 4x MR’s equate to approximately 8% back (based on the current consensus value of $0.02/MR valuation) and that’s rather hard to beat. For people flying a few times a year and aren’t loyal to a particular airline, this card will also make sense with the $100 annual airline credits, 3x MR for airline related charges, and the baggage insurance. After running the math and analyzing the data, the sign-up bonus more than offsets the annual cost for years to come. If you spend at least the same amount as the average American amount on dining and groceries, this is an excellent card to round out your wallet, pairs well with complimentary cards, and the value it provides greatly exceeds the annual fee of owning the American Express Gold Card.
