Is The $450 Annual Fee For the American Express Platinum Card Worth It?

I suspect that, for most people who consider this question, the answer boils down to whether the card’s best-known perk – airport lounge access at American, Delta, U.S. Air, and Priority Pass lounges – justifies the $450 annual fee.  If the analysis ended there, my answer would be no.  I simply don’t place much value on airport lounge access: the drinks and small snacks are nice, but not $450-nice; many airports now offer free wi-fi access, and my iPhone suffices at those that don’t; and although I appreciate a comfortable chair as much as the next guy, I’m happy to sit in the regular chairs at the gate.  But the analysis doesn’t end there, because the Platinum Card offers some lesser-known but extremely valuable perks that should factor into your calculus.

First, the Platinum card offers a $200 credit each calendar year to offset fees charged by airlines, including baggage fees, in-flight food and entertainment purchases, change fees, and all sorts of other charges.  This credit, if used to its full potential, effectively reduces the $450 fee to a more palatable $250.  The credit is limited to fees incurred on one airline of your choosing, but in today’s environment – where most airlines charge a fee for sitting in the emergency exit row – it’s unfortunately quite an easy task to max out that $200 credit.  I should also note that although the credit is not supposed to apply to airline gift cards, Flyertalk and other internet outlets are filled with anecdotal evidence suggesting otherwise.

What’s really great about the $200 credit is that it resets at the beginning of each calendar year, whereas the annual fee is keyed off of the date on which you opened your account.  The result of this staggered timing scheme is that you can actually use two $200 credits before your second annual fee hits.  For example, if you opened an account on March 1^st, 2013, you would have until December 31^st to use your 2013 credit, and then on January 1^st, 2014, you would have another $200 at your disposal.   If you used that $200 and cancelled or downgraded the card before your second annual fee hit on March 1, 2014, you would have effectively offset $400 of the $450 annual fee, for a net fee of $50.

Another significant but relatively-unknown perk of the Platinum card is that merely holding it entitles you to Starwood Gold status, which ordinarily requires 10 stays or 25 nights.  Gold status isn’t exactly earth shattering, but it’s often good for a room upgrade, and entitles you to free internet access and late (4 p.m.) checkout.  Some of the other, more targeted benefits of the Platinum card can prove valuable as well, including the fact that cardholders are reimbursed for the $100 application fee when applying for the government’s “Global Entry” program, which allows program participants to bypass customs lines after arriving back to the U.S. from international travel.

All that said, one very important thing to keep in mind is that the benefits that I have described in this post are benefits of holding the Platinum card, not spending on the Platinum card.  The Platinum card only offers 1 point per dollar on actual spend, which is entirely unimpressive, especially in an apples-to-apples comparison to the Premier Rewards Gold Card.  So while the Platinum Card may certainly be worth owning, it generally is not worth using, with three narrow exceptions: (1) to hit a minimum spend requirement for a sign-up bonus; (2) for fees incurred on your designated airline, so that they qualify for the $200 reimbursement credit; and (3) for use abroad, because the Platinum card carries no foreign transaction fee.

With respect to the first point, the best current sign-up bonus for the Platinum Card is 25,000 Membership Rewards points after spending $2,000 within 3 months.  The Business Platinum Card, which offers nearly identical benefits but is intended for business use, also offers 25,000 Membership Rewards points after spending $2,000 within 3 months.  I value 25,000 Membership Rewards points at about $375.  If you do choose to sign up for either card, I highly recommend that you spend the $2,000 required to trigger the sign-up bonus and then place the card in a deep recess of your wallet, only to used in the relatively rare circumstances described above (and for airport lounge access!).

Please note that I may receive a referral credit if you choose to apply for a card through the links contained in this post.  I truly appreciate your referral and, as always, my referral links direct you to the best offer that I know of for the card.