Why I Dumped My American Express Platinum Card

Man handing over and paying with an American Express Platinum credit card isolated on a white background
Martin Carlsson/Alamy

I remember deliberating whether to get the American Express (AXP) Platinum card for over a year. What drew me to the card was access to most U.S.-based airport lounges, but I couldn't get over the mental hump of shelling out a $450 annual fee for a credit card. Still, after working through the economics, I got the card in 2011. Three years later, I've decided to drop the card and its hefty bill, and here's why.

What Lounge Access?

Access to airport lounges with the Platinum card is not nearly as good as when I signed up. I used to be able to use the American Airlines (AAL), Delta Air Lines (DAL) and US Airways airport lounges. However, within the past year, Platinum cardholders lost access to the American and US Airways lounges and are no longer able to bring complementary guests into Delta lounges. While the Platinum card still gives cardholders Priority Pass lounge access, in my three years as a cardholder, I never was able to use this benefit. American Express claims to be building its own airport lounges with free access for Platinum cardholders, but the only Centurion Lounges so far are in Las Vegas and Dallas.

Subpar Rewards Program

I never did like the Membership Rewards program. First, on the Platinum card, you're only able to earn one Membership Rewards point per dollar spent, which is less than many other credit cards (like the Chase (JPM) Sapphire Preferred card). In addition, I found the redemption value of each Membership Rewards point to be around one cent -- also less than other programs, such as the Starwood (HOT) Preferred Guest or Chase Ultimate Rewards programs.

As a result, during my time with the card, I never used my Platinum card for everyday purchases. It seemed weird to pay $450 for a credit card and not use it (or even carry it around), but it didn't make economic sense for me to use since I could pull out other credit cards and earn two points per dollar spent on most purchases.

$200 Airline Fee Hassle

Each year, the Platinum card agrees to reimburse cardholders up to $200 for incidentals and fees incurred on one airline. Example fees include checked bag fees and food purchases on flights. Because I don't regularly make these types of purchases, I took advantage of this benefit by buying four $50 airline gift cards a year, which I could use on flights that I would have purchased anyway. That was one of the big selling points that allowed me to initially make the card economics work. The problem: Toward the end of my relationship with the Platinum card, I found it to be a pain to track all the airline gift cards that I had accumulated, the balances of the various cards and the rules and restrictions for each airline.

No More Benefits to Reap

Over the last three years, I've basically sucked out all of the benefits that I could from the American Express Platinum card. I registered for Global Entry in my first year and got American Express to reimburse me the $100 signup fee. I've used the $200 airline fee credit each year to buy airline gift cards, and before I canceled the card, I enrolled in the Extended Payment Program to get 10,000 Membership Rewards points. There are really no other big benefits or signup bonuses that I'm eligible for, so all that I see staring in my face is the huge $450 annual fee and worsening benefits.

My Next Steps

Having canceled my American Express Platinum card, I'm going to rely more on my Chase Sapphire Preferred card and American Express Starwood card.

%VIRTUAL-article-sponsoredlinks%The Chase Sapphire Preferred card allows me to earn two points per dollar spent on restaurants, travel and transportation, which is where I spend most of my money. In addition, the card has no foreign transaction fees, so I can feel free to use it anywhere in the world that accepts Visa (V). The American Express Starwood card allows me to earn one point per dollar spent for most transactions and many more at Starwood properties. In addition, I've found each Starwood point to be worth at least two cents.

Both cards come with annual fees -- the Chase Sapphire Preferred is $95 a year and the American Express Starwood is $65. However, the total is around a third as much as the Platinum card fee of $450, and both cards essentially allow me to earn 2 percent rewards on most purchases. Now that's rich.

Roger Ma is a digital media professional, personal finance expert, and licensed real estate salesperson. He is the founder of lifelaidout, a personal finance blog that helps others identify value and save time, money, and energy in their everyday lives.

Why Your Bank Thinks Someone Stole Your Credit Card
See Gallery
Why I Dumped My American Express Platinum Card

One reason why Marquis' gas purchases might have triggered a fraud lockdown? Filling their tank is a common first move for credit card thieves.

"Some of the things they look at are small-dollar transactions at gas stations, followed by an attempt to make a larger purchase," explains Adam Levin of Identity Theft 911.

The idea is that thieves want to confirm that the card actually works before going on a buying spree, so they'll make a small purchase that wouldn't catch the attention of the cardholder. Popular methods include buying gas or making a small donation to charity, so banks have started scrutinizing those transactions.

Of course, it's not a simple matter of buying gas or giving to charity -- if those tasks triggered alerts constantly, no one would do either with a credit card. But Levin points to another possible explanation: Purchases made in a high-crime area are going to be held to a higher standard by the bank.

"It's almost a form of redlining," he says. "If there are certain [neighborhoods] where they've experienced an enormous amount of fraud, then anytime they see a transaction in the neighborhood, it sends an alert."

(Indeed, Erin tells me that one of the gas purchases that triggered an alert took place in a rough part of Detroit, which she visited specifically for the cheap gas.)

People who steal credit cards and credit card numbers usually aren't doing it so they can outfit their home with electronics and appliances. They don't want the actual products they're fraudulently buying; they're just in it to make money. So banks are always on the lookout for purchases of items that can easily be re-sold.

"Anytime a product can be turned around quickly for cash value, those are going to be the items that you would probably assume that, if you were a thief, you would want to get to first," says Karisse Hendrick of the Merchant Risk Council, which helps online merchants cut down on fraud. Levin says electronics are common choices for fraudsters, as are precious metals and jewelry.

Many thieves don't want to go through the rigmarole of buying laptops and jewelry, then selling them online or at pawnshops. They'd much prefer to just turn your stolen card directly into cold, hard cash.

There are a few ways that they can do that, and all of them will raise red flags at your bank or credit union. Using a credit card to buy a pricey gift card or load a bunch of money on a prepaid debit card is a fast way to attract the suspicions of your credit card issuer. Levin adds that some identity thieves also use stolen or cloned credit cards to buy chips at a casino, which they can then cash out (or, if they're feeling lucky, gamble away).

When assessing whether a purchase might be fraudulent, banks aren't just looking at what you bought and where you bought it. They're also asking if it's something you usually buy.

"The issuers know the buying patterns of a cardholder," says Hendrick. "They know the typical dollar amount of transaction and the type of purchase they put on a credit card."

Your bank sees a fairly high percentage of your purchases, so it knows if one is out of character for you. A thrifty individual who suddenly drops $500 on designer clothes should expect to get a call -- or have to make one when the bank flags the transaction. If you rarely travel and your card is suddenly used to purchase a flight to Europe, that's going to raise some red flags.

Speaking of Europe, the other big factor in banks' risk equations is whether you're making a purchase in a new area. I bought a computer just days after moving from Boston to New York, and had to confirm to the bank that I was indeed trying to make the purchase. Levin likewise says that making purchases in two different cities over a short period of time raises suspicions.

"I go from New York to California a lot, and invariably someone will call me [from the bank], " he says. Since one person can't go shopping in New York and California at the same time, any time a bank sees multiple purchases in multiple locations in a short period, it's going to be suspicious.


Read Full Story