Comparing the Value of the Amex Personal & Business Platinum Cards
With the recent unveiling of new benefits for both the personal and business variants of the iconic Platinum card, it’s been interesting to witness the community’s reaction to the changes. Ever since the introduction of the Chase Sapphire Reserve (CSR), both Platinum cards have been perceived as several notches below J.P. Morgan’s offering. This is in no small part due to their lower signup bonuses and lower ongoing earnings in comparison.
Indeed, Chase has established a new high bar for premium rewards cards. The CSR’s flexible $300 annual travel credit and broad 3x spending categories have greatly expanded the ‘premium’ credit card market. Compare that to the Platinum cards which were, at a time, almost laughably unrewarding: as recently as six months ago, the Personal and Business Platinum provided only a rigid $200 airline credit and no enhanced earnings rates for any purchases at all!
Thankfully, Amex has felt the competitive pressure from the Reserve, and has since taken action. On October 5th of last year, they announced that the Personal Platinum would receive 5x MR earnings on flights booked with airlines, and additionally updated the Business Platinum to earn 1.5x MR on all purchases >$5,000. Just a few weeks ago, they announced further enhancements, from 5x MR on all Amex Travel bookings, to a $200 Uber credit for the Personal card. As such, the benefits of the two cards have converged significantly, even as they’ve diverged in one very important way: the annual fee, which remains $450 a year on the Business Platinum but increases to a tall $550 for the Personal card.
In any case, given that Amex makes it easy for just about any individual to get their hands on a ‘business’ card, the inevitable question introduced by all these changes is one of determining which is the better one to hold on to. Naturally, this depends a lot on personal spending, circumstances, and use – but we’ve been able to create a simple formula you can use to input your estimate for the value of each benefit, and from that quickly pick which of the two is a better value for you.
Let’s talk numbers
For this analysis, we will focus wholly on the differences of the benefits between both cards. This is mostly done since we’re investigating which is the better value, not whether either is worth keeping. To that end, we’ll be putting aside things like the Amex Concierge, Roadside Assistance, the Global Entry credit, and other identical benefits. It may be the case that the terms for some of these benefits are slightly different (e.g. a different coverage scheme for Roadside Assistance), but the impact of these dissimilarities will be very minor. As such, to keep things as simple as possible, we’ll ignore them.
For each difference, we will assign a variable EV[x] which will represent the Expected Value of the benefit. For example, since one difference between the Personal and Business Platinum is Hilton Honors Gold status, we’d represent the ‘value’ of that benefit as EV[hilton].
Difference #1: The $200 Uber credit
This newest addition to the Personal Platinum has been one of the more controversial updates, and for good reason. While Uber is certainly a convenient service that many cardholders utilize, it’s also not uniformly available across the country. Realistically, if you live in a rural area, you likely won’t be able to use this benefit day-to-day.
Further compounding the value proposition is the very unorthodox way that Amex is disbursing this credit. Typically, a credit is provided upfront and expires year-to-year if you don’t use some of it. With the Uber credit, however, Amex provides a monthly stipend of $15, with unused credit disappearing at the end of the month. For the month of December, they increase this stipend to $35, but the end-of-month expiry remains.
All of this complexity means that there are big winners and big losers from this benefit, and few that fall between. Consistent Uber users will essentially enjoy a $200 subsidy, as it’s a $200 credit; infrequent riders will see their few rides each year reduced in cost, but little else. Perhaps the best way to estimate the value of this benefit in your own circumstances, then, is to just estimate the number of months you’re expecting to use it, and then multiply by $15, adding another $20 if one of those months is December.
Since the credit is capped at $200, we know that $0 ≤ EV[uber] ≤ $200. Go ahead and make an estimate for yourself before moving on, and don’t forget to write it down – we’ll use it (and other estimates) later to compare the cards!
Difference #2: Hilton Honors Gold Status
The other benefit belonging solely to the Personal Platinum is automatic Gold status with Hilton. Both cards do share SPG Gold (which status-matches to Marriott Gold), but the difference between a Hilton stay with and without Gold status isn’t insignificant: Hilton Honors Gold members receive complimentary room upgrades and breakfast, a welcome gift, 25% higher points earning for paid stays, and other perks.
How much value you place on this benefit depends primarily on two things: the frequency with which you stay at Hilton properties, and the status you’d have if you weren’t given Gold automatically. Based on the value of Hilton Honors points, as well as the relative price difference between base hotel rooms and their respective upgrades, a conservative estimate of the value of this for every night at a Hilton property would be around $30, if the alternative were to have no status at all.
Finally, since you would earn Hilton Honors Gold after 20 stays or 40 nights, we’ll do a (very rough!) estimate and cap the value of this at 30 x $30, or $900, since beyond that many nights you’d likely have earned Gold status anyways. The vast majority of cardholders won’t come anywhere near that figure, but it’s a reasonable theoretical maximum.
We’ve decided that $0 ≤ EV[hilton] ≤ $900, and that each night at a Hilton will return around $30 of value as a result of having Gold status. Go ahead and make an estimate for the number of nights you’d expect to stay at a Hilton on a given year, and calculate accordingly.
Difference #3: Gogo In-Flight Internet Passes
The final three differences are all in areas where the Business Platinum has an edge. We start with the simplest one: 10 complimentary internet passes that cardholders get for use on Gogo-connected flights.
It surprises me that this benefit isn’t discussed so much in churning circles, since Gogo has an impressively comprehensive list of airline partners. If you fly even just a few times a year, you’re likely to be on at least one flight where this benefit would give you free internet access! Not bad, considering the exorbitant fees they often charge.
Better yet (and unlike the next two benefits), the value of this one is pretty easy to estimate. As of today, Gogo sells in-flight day passes for $19 each. Consequently, you can simply multiply the number of times you’d expect to use a pass against that value, up to 10.
Since we know the number of complimentary passes as well as their value, we know that $0 ≤ EV[gogo] ≤ $190, where EV[gogo] is $19 for every expected use of a internet pass. Calculate that for yourself and we can continue on.
Difference #4: 1.5x MR Earnings Rate on Purchases >$5,000
Both the Personal and Business Platinum enable cardholders to get 5x MR on flights. They also both get a substantially less impressive 5x MR on hotel bookings through the Amex Travel portal, which we don’t recommend (since they don’t qualify for hotel rewards or elite status).
The Business Platinum Card, however, has one additional benefit above and beyond the Personal Platinum Card: 1.5x MR on all purchases >$5,000. This unfortunately only applies to the base earnings rate on spending (meaning you can’t get 7.5X MR on flights)… but it does mean that large purchases are substantially more rewarding, providing a minimum 2,500 MR extra earnings boost to your spend. That’s pretty great when you consider all the other benefits to putting big purchases on charge cards, and on Amex’s Platinum cards more specifically.
So how to we put a value on this enhanced earnings capability? Well, if we stick to speaking in MR point terms (rather than dollar terms), we can simply calculate how many extra MR points we’d receive. For example, if I expected to make big purchases totaling $22,000, I’d expect to earn 11,000 extra MR points.
EV[1.5x] = (Amount of spend on purchases over $5,000) * .5
(We’ll assign a cents-per-point value to MR’s in a moment, to convert it to cash for this analysis!)
Difference #5: 50% rebates on pay-with-points bookings
Here is where the math gets a bit complicated. The Personal and Business Platinum share the exact same point transfer rates to airline and hotel partners. They also share nearly identical redemption capabilities via the Amex Travel Portal. I say nearly, however, because the Business Platinum Card has a fascinating trick up its sleeve: a 50% rebate on pay-with-points flight purchases. This probably seems mundane, but upon further inspection it’s actually a profound benefit.
Fundamentally, it allows cardholders to purchase economy flights for a preselected airline (or business/first class flights for any airline) with points, at a rate of 1 cent per MR point. Immediately after, however, Amex credits back half of those MR points to your account, resulting in an effective redemption rate of 2 cents per point for that transaction. Better yet, since the transaction appears on your account as a statement credit, you still get 5x MR points on the purchase even though it’s a points redemption. Furthermore, since it will appear to airlines as an ordinary cash purchase, you ‘ll also get miles and elite status with the airline you book the flight with!
Simply put, for points-rich cardholders, this means that MR points are redeemable at minimum for 2 cents per point… plus 5 MR points per dollar… plus airline miles and elite status. In the long run, this ultimately translates into higher redemptions for points with the Business Platinum, on average. For the sake of our comparison, then, that higher redemption rate is value that we need to capture.
Hang in there with me through this math. To capture EV[Pay-with-Points (or pwp)], we need to decide how many MR points we expect to redeem in a given year, and multiply that by the additional redemption value we expect to get from those MR points thanks to this pay-with points benefit. In other words, we want to find this:
EV[pwp] = (Number of MR points redeemed) * (Improvement in redemption value compared to the Personal Platinum)
Most online estimates place the value of MR points between 1.7-1.9 cents per point, which is reasonable when transfer partners are considered. This figure rises to around 2 cents per point when given the option to get 50% back on pay-with-points purchases (also reasonable). So let’s assign a redemption rate of 1.8 cents per point with the Personal Platinum, and a rate of 2.0 cents per point with the Business Platinum – a .2 cents per point improvement.
Therefore, EV[pwp] = (Number of MR points redeemed) * (.002)
Now that we’ve chosen a redemption rate, by the way, we can use that estimate to convert the value of 1.5x MR earnings on >$5,000 purchases to dollar terms, from MR terms (which we determined earlier):
EV[1.5x] = (Amount of spend on purchases over $5,000) * .5 * .02
Solving For Relative LTV (Long Term Value)
Now that we’ve estimated the EV of all of the benefit differences for each card, we can put it all together. Let’s start by pulling all of the variables together into unified equations, which will represent the LTV (Long Term Value) for each card. You’ll notice that, for the Personal Platinum, we’re subtracting $100; that’s because it has the $550 annual fee relative to the Business Platinum’s $450 annual fee. In other words, it ‘starts’ a given year $100 behind.
Personal LTV = EV[uber] + EV[hilton] – $100
Business LTV = EV[gogo] + EV[1.5x] + EV[pwp]
With these equations, we now have a simple, unambiguous, and consistent framework for comparing the two cards! If you can estimate the above values, you can just compare the two LTVs to figure out which card is a better value for you. Better yet, there are some immediate conclusions we can make even if we don’t know how much all of the benefits are really worth:
- If you value the Uber credit and Hilton Gold status at >$100, you’re better off with the Business Platinum. This is true even if you don’t value any of the Business Platinum benefits at all.
- The Gogo passes make a very significant impact on the value proposition of the Business Platinum Card. It takes just two uses of the complimentary passes to eclipse what a whole $5,000 purchase would yield in terms of value!
- If you value the Uber credit and Hilton Gold status anywhere above ~$300, the Personal card may be your better bet. For the Business Platinum to ‘catch up’, it would take:
- The use of all of your Gogo passes, or
- $20,000 in spend on >$5,000 purchases, or
- 100,000 in MR point redemptions.
- The Business Platinum will provide $100 in value for every $10,000 spent on >$5,000 purchases, or for every 50,000 in point redemptions.
So what’s the TL;DR? Frequent Uber riders, and those who can really milk the value of Hilton Gold status, likely come out ahead on the Personal Platinum. Everyone else, on the other hand – and in particular big spenders – will be better served by the Business Platinum.