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As a (more actionable) follow-up to the beet story, this post will share how we crunched the value of one card that we have in our wallet, the $695 annual fee American Express Platinum. We wanted to know, is the AMEX Platinum worth the annual fee? While the specifics are for this one card, the steps will help anyone who is evaluating whether or not to keep any annual-fee card they have in their wallet.

First: Signup bonus conquers all

A quick acknowledgement before we start. The sign-up bonus (SUB) is the single largest contributor to a stash of travel rewards points. When you’re getting that first–year points/miles signup bonus, (anything from 50-75k is very good, 75-100k is excellent, and over 100k is AH-MA-ZING), the answer to “is the annual fee worth it?” is almost always: YES. We won’t belabor it in this post, but when you’re able to parlay 100,000 bank points from a card that cost you a, say, $250 fee into (2) roundtrip business class flights that would have set you back $6,000-$8,000…. yeah. Do it. This article is meant to help you decide whether or not to keep the card around after that.

Where to start?

We grabbed the $695 annual fee AMEX Platinum (technically a “charge card” not a “credit card”) which at the time had a 100,000 Membership Rewards signup bonus in advance of our Maldives trip. Those points, combined with a subsequent AMEX Gold signup bonus, allowed us to pay for an overwater bungalow for 5 days. After year one, with the trip behind us and the card’s fee coming up again, this is what we did to see if we would keep it in our wallet:

1. List the potential value
2. Calculate what we used
3. Calculate what we would have used (most important step!)
4. Make the decision!

1. List the potential value

The first step to deciding if the AMEX Platinum is worth the annual fee is to list the potential value. This means laying out all of the card’s benefits and assigning dollar values to each. Best case scenario, if you redeemed EVERYTHING offered, what would it total? For the AMEX Platinum, (commensurate with that hefty annual fee!) there are a lot of benefits and perks. For the complete list, this article does a nice job presenting them. Any card you are considering will present a slick list of perks, so this information should be easy to find. We listed the AMEX Plat benefits in a spreadsheet, see Column D, which we tallied at $2,213.40. This is conservative, even – you could likely get even more.

Note for “Hotel Status” we assigned no value, because it was hard to quantify. There is some value in getting a free room upgrade and a guaranteed late checkout. We enjoyed both with Marriott at times. So we showed the benefit, but we felt putting a dollar amount to it was too subjective.

2. Calculate what we used

The next step to deciding if the AMEX Platinum is worth the annual fee is to look back and determine what benefits you used. Looking back on a year of card ownership, this is pretty easy to do with statements. AMEX is probably industry-leading at giving you the credits shortly (1-3 days) after the charges hit. If you are evaluating whether or not to get a new card, you would need to estimate what you think you’d use. If that’s your situation, my advice is to err on the conservative side and assume you’d use less perks than you think. See Column E – we used $1,802.72 of benefits. Not quite 100% of what was available, but not much meat left on the bone either.

3. Calculate what we would have used

Put on your game face, this is where the rubber hits the road! (or the plastic hits the….swiper?). Now you know what benefits the card offers, and you know what you used during year one. But we are trying to decide if the AMEX Platinum $695, or your credit card annual fee, is worth paying again. That means we need to know how much of the $1,802.72 in benefits we gained truly offset that annual fee. In other words, what benefits would we have used, if we didn’t have the card? For us, that’s listed in Column F – a mere $550.00. How did we get there?

I will elaborate on that thought process a bit, because this is the focal point of the article. On the value of card benefits, here’s where I land:

1. A benefit does not offset part of an annual fee unless that benefit replaces an existing household outflow of cash for that item. For example, if you already paid for Sirius XM before getting a credit card that has that subscription included, you have offset a portion of that card’s annual fee.
2. If an expense qualifies per above, it’s not “Free”- you’ve just prepaid it! The great Richard Kerr was the first I heard to articulate this truth, on an episode of the also excellent Miles to Go podcast. Realizing this is key to not being swayed by flashy promotions and the promise of “luxury perks”.

AMEX Platinum primary benefits we evaluated

This next section references some of the noteworthy figures in the spreadsheet above.

Travel benefits

• Hotel credit – We earned a $200 hotel credit (AMEX’s Fine Hotels & Resorts list) in Dec 2021 when we booked a night at the St. Regis Dubai – The Palm for Jan 2022. Card benefits reset every Jan 1, which means you can double-dip on some of them in the first year. We then used 2022’s $200 credit a few weeks later in Jan 2022 for an additional night added to that same stay! A FH&R stay also comes with a $100 resort credit, only given to us one night in this case. The use for the credit varies per location, in our case it was for the spa. Due to the double dip, we were able to use $500 in that first ownership year, despite the card only offering $200 (stay) + $100 (resort credit) in a given calendar year.

• Airline credit – similar to the hotel credit, we double dipped. We booked flights in late 2021 for early 2022. We paid for bags to earn the airline credit. Then we took the actual flights in 2022, and paid for seat upgrades using 2022’s credit. This is an example of using a credit only because we had it, as we likely normally would have carried on, and not paid for seat upgrades.
• Lounge access – some of the lounges we accessed (approx $50/pp retail value) were cool, and really transformed the typical “airport experience.” But the reality is, prior to AMEX, we flew all the time without lounges. Because of that, we didn’t count it towards the annual fee.

• Clear membership – we already have Global Entry, so we had little need for Clear. This benefit that was wasted on us, but can be a pretty significant perk for big travelers.

Lifestyle benefits

• Entertainment credit – we were happy to have AMEX pay for Sirius XM for a year. But, being honest, in a typical year, we did without that subscription. (I listen to free travel rewards podcasts instead! Like this one!) We left money on the table by not going through the efforts to add others like Peacock and Audible, but I chalk that up to being subscription-weary. Even when its “free”, it does cost your time to manage. (ahem – buy out the time.)

• Walmart + – we used this free benefit a bit, but HELP ME PLEASE if I was ever tempted to pay $7.95/mo to engage more with that store. (I hope you feel the weight behind those words.) I’m sure some people are fine with it, but hard pass for us.
• Uber – about half the time, we used our monthly Uber credit on Uber eats. We found ourselves going out of our way at the end of the month to use the Uber eats, so we didn’t assign it full value in Column F.
• Saks – absolutely we used the $100 of free merchandise, but since we went out of our way to shop there only due to the benefit, it doesn’t count towards offsetting our annual fee.

4. Make the decision!

You can see in column D that if you squeezed 100% of the juice, you’d easily get over $2k of value. Subtract the $695 annual fee, and you’d still be profiting around $1,500! Deal upon deals, right?! Well…no. You have to be honest with yourself, and see how many of those perks truly offset the annual fee. Using our approach from this article, Column E shows our value was really only $550.00. That, combined with our current low-spend status as unemployed volunteers, means the AMEX Platinum is a NO for our wallet.

What did we do? And 3 Pro Tips

We decided the AMEX Platinum was not worth the annual fee and cancelled it after one year. AMEX is a great bank and their cards have awesome perks, but $695 outweighs $550. As we close, here’s some pro tips to consider beforehand:

Pro Tip 1 – Ask for a retention offer

Before cancelling our card, we chatted AMEX online, saying we “were considering” cancelling it. Some back and forth as to why, and they offered us 30,000 Membership Rewards OR a credit of $300 if we kept it open. Some retention offers are better than others, and this one wasn’t right for us. A data point for comparison, months later, we DID accept a retention offer to keep a different card. 20,000 points for $2,000 within 3 months to keep one of our $250 Annual Fee AMEX Gold cards open. (Our 90,000 point referral offer is linked there. Click “View all Cards with a Referral Offer” in the top left corner to see all the options!)

Pro Tip 2 – Wait until the annual fee hits to ask for the retention offer

You have up to 45 days after the fee to do this in most cases. Even if you decide to close it, they’ll credit the fee. In most cases, if you ask prior to the fee hitting, they’ll tell you to come back after it hits and ask again.

Pro Tip 3 – Don’t lose your points

Prior to cancelling an AMEX card, (or any other) make sure you don’t lose your points. One way is to have spent or transferred them prior to cancelling. Another is to have a different Membership Rewards-earning card still open that you won’t be closing. This could also be one you product change to, that doesn’t have an annual fee. For AMEX’s primary charge cards, (Plat/Gold/& Green), there are no “no annual fee” charge cards to downgrade to.

Hopefully this post helped you think through whether or not to keep around your high annual fee credit card after you’ve collected the signup bonus!