In the post “Which Premium Cards are Keepers?” I presented a framework (along with a worksheet) for determining which premium cards are worth keeping. The general idea is to look at each credit card perk individually and ask yourself how much you’d be willing to pay if that perk were available as a subscription. That’s how much you value that perk. Then, you add up all the values for a card’s perks and compare them to the card’s annual fee. If the total equals or exceeds the annual fee, then the card is worth keeping.
The approach described above works great until you have too many cards that are keepers. After Amex refreshed its consumer American Express Platinum Card® (details here), I had a problem. I currently have six of these consumer Platinum cards in my household (half are mine and half are my wife’s): two regular ones, two Morgan Stanley variations, and two Schwab variations. The problem is that the “Which Premium Cards are Keepers?” formula tells me to keep all six. I get more value from each card than its annual fee, even after accounting for the fact that many of the card’s benefits have diminishing value when its the second, third, fourth, fifth, or sixth Platinum card in my household. That’s great, but dealing with so many cards and coupons is a hassle!
This situation forced me to step back from the numbers and think about what I really value with each card. Forget about whether the card saves me money… Does it make my life or my travel better in some way? From this perspective, the primary benefit I value is access to lounges, including Delta Sky Clubs when flying Delta, Centurion Lounges, AirSpace Lounges, Escape Lounges, and others. With just one Platinum card each, my wife and I get access to all of these. The only way we would benefit lounge-wise from having more Platinum cards is with Delta Sky Clubs because Platinum cardholders are limited to 10 visit-days per year. I’m not sure whether we need more than 10.
I then did a mental experiment: For the extra cards (beyond one each), what if there was a way to sell each of the card’s perks such that I would profit by a couple of hundred dollars per year with each card? Would I keep the cards then? In this scenario, I would have to sell the monthly credits 12 times per year, the quarterly credits 4 times per year, the semi-annual credits 2 times per year, and the annual credits 1 time per year. That sounds like a job that I very much don’t want! I’d much rather focus my time on creating Frequent Miler content! That settled it for me… I definitely need to trim my collection regardless of what the keep/cancel spreadsheet says!
Since my career is centered on rewards credit cards, my card pruning plans differ from what I’d recommend for others. I want to keep at least one card of each flavor in case it’s useful for my work. For example, if the American Express Platinum Card® for Schwab gains new features, I would like to test them out. The one exception is the plain old American Express Platinum Card®. I think I can downgrade to the $150-per-year American Express® Green Card, and upgrade again in the future, as needed. With that in mind, I could trim down to as few as two consumer Platinum cards in my household.
Perhaps my trimmed collection would look like this:
- Me:
- My wife:
- Free authorized user from my Morgan Stanley card (one big advantage of the Morgan Stanley variation of The Platinum Card® is that the first authorized user is free)
- The Business American Express Platinum Card®: I didn’t mention this earlier, but I also want to keep one of these in our household. If it turns out that the 10 Sky Club visits per year from her Morgan Stanley authorized user card are sufficient, we could downgrade this in the future to the Business Green Rewards Card from American Express.
That’s still a substantial collection above, but it would drastically reduce the number of credit card coupons I’ll have to deal with.
I don’t consider the decisions written above to be set in stone. Can you think of ways to improve my plans? Please comment below.
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I think you’ve got to assign a time value to the hassle of needing to juggle cards to remember to redeem all the credits. If you’ve got to do something extra that you wouldn’t normally do to get the credit then you’re knocking something off. Maybe it’s not a lot but it’s got to be something.
“If the total equals or exceeds the annual fee, then the card is worth keeping.”
No, I think the total has to MEANINGFULLY exceed the annual fee. If I have an imaginary $500 AF card with $500 credits for going to barber shops and no other real benefits I’m not going to bother keeping it. Yes I probably spend that much (certainly more if we add in my wife), but the hassle of toting around one more card to remember to use in specific circumstances (and really only up to the $500!) just isn’t worth the squeeze.
If it’s $505, $510 credit I’m still not bothering, after all, maybe I don’t get my haircut as much, or something else happens, idk. If you told me it’s $600, $700, you’re starting to get my attention, subject to my confidence I’d spend that much in barber shops. That’ll be different for everyone.
“No, I think the total has to MEANINGFULLY exceed the annual fee”
True, the total value you get from the card needs to meaningfully exceed the annual fee, but that’s not how I calculate the values. For each perk I ask myself how much I’d be willing to pay for it if it was available as a subscription. I wouldn’t ever pay face value because there would be no point in doing so.
Take your example about the $500 in barbershop credits. Depending upon how that actually works, I might value it at about half of what I’d save. For example, if I would expect to save $300 with these credits, I’d probably value that perk at $150. That’s how much I’d be willing to pre-pay to save $300.
Greg, what are you doing about the MS plat. My MS access investing account is getting closed shortly. Is this the account you also hold to keep eligibility for this plat card? Or do you maintain another MS product to keep the relationship?
I value the MS plat as the keeper card bc of the free AU card, and no other plat has this feature.
Yes, that account is going away, but I don’t know if they’ll also take away our Platinum cards. I was just going to wait and see what happens. Have you heard anything definitive about that?
Haven’t heard anything other than the email announcement. We have to take action. Nothing automatic. You can move to a MS brokerage account with an advisor or virtual advisors, but I assume these have 25-100k minimums. Or can move to a core portfolios E*trade account which is basically going to mirror the robo investing from access investing. Or we can sell it all and take a check or ACH.
I’m prob going to cash out and hope to maintain my amex. If Amex bitches ever I’ll open a real MS account with whatever minimums they want I guess. Too bad the access investing core portfolios by E*trade won’t qualify for the ms plat
Delta cards for the MQD are WELL worth it to me.
I think your system was fine, it’s just that the values you set for the benefits were too high. Did you ever actually buy such subscriptions? Probably not, so you probably wouldn’t in this case either. Plus, a second or third subscription to whatever benefit is worth incrementally less. So first $600 FHR credit may be worth $400 if prepaying as a subscription (I’m being generous), but a second one would only be worth maybe $350, another one $300, etc. This is true across all benefits.
Also, why downgrade to a green, not cancel? Can’t you just apply for a new plat under the off chance that you needed it, even without a SUB if you get the popup? $150 is expensive insurance for such a contingency.
It’s for the downgrade/upgrade game. If you downgrade to a lower card (like the Green, which has the lowest AF), Amex is usually pretty quick to offer you a bunch of points (perhaps >= 50k) to upgrade back to Platinum and spend some money on the card (perhaps $2k). So it’s a good way to get lots of points without creating a new account on your credit report and without too much spend.
Yes, this. Another reason to downgrade has to do with timing. If I cancel anytime other than within 30 days of the annual fee, I wont’ get any of the paid annual fee back. But if I downgrade mid-year, I’ll get back a prorated amount and pay a prorated amount for the Green card.
I DID take into account the diminishing returns of the 2nd, 3rd, 4th (etc) card for those things. Not all of the benefits have diminishing returns, though. For example, with the $200 airline incidental fees, I have no trouble getting the full $200 with each card. Same with Uber credits where I easily use them all up each month even with 6 cards loaded to my account.
Greg / Community members – can you kindly help me understand why it is better to downgrade from the AmEx Platinum card to the AmEx Green Card / Business Green Rewards Card instead of cancelling the Platinum cards altogether?
The AmEx Green Card has a $150 annual fee ($95 for Business Green Card) and the spending categories are exceeded by your remaining AmEx Platinum and AmEx Gold cards (making the Green card useless for spend).
You have to keep at least one MR card open to keep your MR points from expiring. I would think that the Blue Business card that earns 2x on everything would be a better choice.
Downgrade gets you a partial refund on the AF if you are mid cycle. Cancel more than 30 days after the AF posts and poof it’s gone.
I love the way you talk through the decision and the “buy/sell” way you think about valuing the benefits. As always, a great post and much better than the cookie cutter fluff that a lot of other travel websites publish! I also love that you guys have a comment section on each article!
If you were referring to those corporate-sell-outs over at TPG, yeah, FM and other sites that actually allow comments are far superior. Never give those shills at TPG any commissions (don’t use their links! Use FM, DoC, etc., who put up public-best offers.)
I won’t even read TPG. They often provide incorrect/incomplete information, unlike FM and OMAAT.
Great. That is another way to thing about, if all these “credits” are worth it. Forced spending isn’t a credit and the time you have to put in to sue them well counts against their value.
How do you get multiple personal platinum cards?
This makes total sense to me. I downgraded my Amex Gold to Green (will upgrade back to Gold or Plat down the road but no need right now or high enough upgrade offer to justify it) because even though I was coming out ahead (the credits do generally fit my natural spend), the returns felt marginal when I can get 3X on a wider dining category with Chase, half a year of 5X at Whole Foods (actually cheaper than or equal in price to most other groceries near me) and then 5% cash back after that (Prime Card). Not burning MR so fast as to warrant accumulating them at such a high AF.
Yeah, beyond claiming sign-up bonuses, I determine which cards I keep mainly by benefits I really want to have, or points categories I use a lot. There are very few cards I make a significant enough profit on for it to actually be worth it based on the coupons alone. I keep cards for things like lounge access, status, points categories, redemption/transfer options it opens up, and other more tangible things, and then make sure it doesn’t cost me much or any money via the coupon book. Making $100 a year on a $600-900 range card just isn’t worth the work to me. Sometimes I keep cards like that a little longer than I’d ideally want to, purely to avoid pop-up jail. But I’m looking to drop them as soon as I feel like I can.
So I would not normally for example have more than one Amex Platinum per person. Just doesn’t make sense. I kept the Amex Business for the points rebate, but now they’ve taken that away that’ll be going at next renewal. Chase Reserve is gone now 1.5 cents per point is over, even though I could technically force my way to break even on it with enough work. Will just keep the Ink Preferred instead. On the other hand, I can see myself keeping the Delta Reserve and maybe Alaska Summit perhaps, because I fly those airlines a lot and there are some worthwhile benefits. I just got Delta status for the first time, and have been upgraded multiple flights already, so that’s been nice.
I should also add I’ve sometimes kept cards when retention bonuses have been offered as well. But I still see the coupons as largely a chore.
I agree. People will jump through a lot of hoops to justify the cards. I find the hotel credits often a terrible value unless you happen to visit certain cities, especially the FHR ones (THC is a better if you are staying 2 nights).
Right now I can use the airline credit, streaming and Resy w/o much effort. We are lucky that 2 of the restaurants we frequent are valid for Resy credits. I canceled the CSR card because the credits just don’t make sense for me.
TY. I agree that the hassle of keeping track of and being sure to redeem all the coupons is not worth it. I appreciate free travel, but not spending hours to be sure to get that last $50 in benefits.
any plan you have is better than being a coupon clipper on 6 cards.
Wow, 6! P2 and I have 4 between us (regular, Schwab). We’re keeping them. The new credits are actually pretty good. Still feel way ahead. Folks who can’t handle it, or won’t use the credits, definitely should close.
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