Credit Cards

What Is Spending Power Amex

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

There is no spending cap on purchases made with the American Express® Gold Card, and the annual fee is $250. There is a rewarding points system for both vacations and regular spending.

The drawback is that this card is only available to individuals with impeccable credit and is not a good choice for first-time cardholders or those with significant financial issues. It’s on par with other American Express reward cards like the Blue Cash Preferred Card and The Platinum Card from American Express.

It’s also in the same ballpark as cards from other issuers, such as the Chase Marriott Bonvoy BoundlessTM Credit Card.

Important Characteristics

The American Express Gold Card’s most notable features are the ones listed above.

Welcome Bonus

Within the first six months of account opening, you may earn 60,000 extra Membership Rewards points after spending $4,000. If redeemed in full, that might be worth over $600.

Earning Benefits

For the first $25,000 you spend annually at U.S. supermarkets, you’ll receive 4 points for every $1 spent, and at restaurants, you’ll earn 4 points for every $1 spent. Moreover, UberEats transactions are worth four times as many points as other purchases.

Unlike with third-party booking services like Kayak and Expedia, you may earn 3 points every $1 spent on flight bookings made directly through airlines or amextravel.com. The point system is as follows: for every dollar spent on anything else, you get one point.

Keep in mind that American Express may not recognize hotels with restaurants inside as restaurants, and that warehouse clubs like Costco and big-box discounters like Walmart may not count as supermarkets.

Redeeming Prizes

Rewards may be redeemed for travel, general merchandise, taxi and Uber trips, gift cards, restaurant meals, statement credits, and more, with a minimum redemption threshold of just 1,000 points via the American Express Membership Rewards portal.

Individual points are worth anything from $0.005 to $0.01 when redeemed. Value is maximized when redeeming for gift cards and travel (both $0.01 per point) rather than statement credits ($0.006 per point) or general shopping (as low as $0.005 per point).

Credit for Uber (Uber Cash)

Up to $120 a year ($10 a month) can be applied as a statement credit on Uber app purchases like Uber Eats and trips. You need to add your Gold card as a payment option in the app to be eligible. Those interested must enroll.

Credit for Restaurant Spending

Save up to $120 a year on dining out by earning up to $10 in statement credits every month when you use your Amex card. Grubhub is partnered with The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar, and several Shake Shack locations. Enrollment is necessary and there are terms to follow.

Hotel room upgrades and credits are provided at no cost

If you use your Gold Card to book a hotel stay of at least two nights, you’ll receive a free room upgrade (based on availability) and a $75 hotel credit. The hotel credit may be used toward meals and other incidentals like spa visits and resort activities whenever you choose throughout your stay.

Advantages of Entertainment

Pre-sale tickets, invitations to cardholder-only events like Broadway musicals and concerts, and free preferential seating (first row, orchestra level, lounge area, etc.) at certain sporting events and musical performances are just a few of the many entertainment perks that come with the Gold Card. Those interested must enroll.

Important Charges

There is no cost for overseas transactions and the yearly fee is $250. If a payment is returned, you’ll be charged up to $39, and if it’s more than 2 months late, you’ll be charged the greater of $39 or 2.99% of the overdue amount. No cash advances or balance transfers are permitted.

Credit is required.

High credit scores are required for this card. For the most part, applications with serious credit issues are immediately rejected.

Benefits

  1. Allows for Versatile Redemption Terms Your Membership Rewards points earned with your Gold Card can be redeemed for airfare, hotels, rental cars, public transit passes, retail, gift cards, cash back, and even a statement credit. Plus, you just need 1,000 points to cash out, which is equivalent to $5 to $10. As opposed to many hotel and airline rewards cards, which normally need at least 5,000 (and frequently 10,000 or more) points for redemption, these are major selling features.
  2. An excellent introductory deal. With the Gold Card, you may get a huge bonus after making only a few purchases during the first six months after opening your account.
    Credit for frequent diners of up to $120 per year and Uber app users up to $120 per year. When used regularly, the meal credit on this card may be worth as much as $120 every year, or $10 per month. Cardholders who don’t always feel like cooking will be pleased to hear this. Those who frequently use Uber’s transportation or food delivery services may like the $10 monthly Uber Cash bargain. Benefits are only available to those who sign up for the program.
  3. There will be no additional fees for international transactions. If you travel internationally frequently, you’ll appreciate that there are no costs associated with using this card in other countries. Citi ThankYou Preferred, in contrast, charges a 3% fee on all international transactions. Fees for making purchases in a currency other than the one on which the card was issued range from 2% to 3% with the U.S. Bank FlexPerks Visa Signature, while they remain a flat 2.7% with the AmEx EveryDay Preferred.
  4. There Are Not Any Expenditure Caps in Place. American Express never sets spending limitations on the Gold Card, but it may do so in the future based on how the card is used. Limits on spending (often $5,000 or more) are a feature of many alternative rewards cards, including otherwise generous alternatives like the Citi ThankYou Premier.

Drawbacks

  1. High Cost Per Year. The Gold Card has an annual charge of $250. That’s a lot more than the $0 and $95 that Citi offers for its two other reward cards, Citi ThankYou Preferred and ThankYou Premier. If you don’t plan to make frequent use of the Gold Card’s perks, such as hotel room upgrades and airline credits, you can save money by switching to a different card.
  2. Exceptional credit is needed. American Express doesn’t say exactly what credit score is required for acceptance, or what additional screening criteria are used, but they don’t try to hide the fact that the Gold Card is only for those with stellar credit. You shouldn’t count on being approved for this card if there are any significant red flags on your credit record.
  3. Capital One VentureOne, a rewards card aimed towards inexperienced card users, is a suitable choice for applicants with good to excellent credit, while the Citi ThankYou Preferred is a better choice for candidates with excellent credit.
  4. Low Redemption Value for Statement Credits. Each point is worth $0.006 when redeemed for a statement credit using the Gold Card. Using 10,000 points for a $60 statement credit. Compared to similar fields, that’s a dismal redemption rate. Capital One Venture, a multipurpose travel rewards credit card with an annual fee of $59, assigns a value of $0.01 per point.

Bottom Line

Not everything is roses with the American Express® Gold Card. However, with a great rewards program and no minimum purchase requirement, you could potentially rack up a lot of Membership Rewards points with regular use. Maybe now is the time to daydream about all the wonderful things you can buy with your new Gold Card.

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