The following is a credit card review from guest writer Mike Dolen, the guy behind CreditCardForum, which is a discussion board about using credit responsibly.
One of the most popular offers from American Express is for their Gold Card.
However based on some of the comments I see on my forum, there are people applying for it who probably shouldn’t be. I have a more detailed AmEx Premier Rewards Gold Card review here, but let’s see how it stacks up against the original Gold Card and the pros + cons that come with each.
PRO: The Rewards
With both cards you earn “Membership Rewards” points, which can be redeemed for gift cards, merchandise, etc. However the best way to use them is for airfare, because you can transfer them to over a dozen airline frequent flyer programs on a 1 point = 1 mile conversion.
- Gold Card: Normally you will be earning 1 point per dollar. Like most credit cards, you can earn some extra points for booking travel directly through the issuer’s website, as well as for shopping at partner websites.
- Premier Rewards Gold: Same as the card above, except you will be earning additional points for some categories of spending: 3x on airfare, 2x at gas stations, and 2x at grocery stores.
CON: The Annual Fee
Without a doubt this is the most notable drawback. The card comes in 2 versions:
- Gold Card: $125 per year
- Premier Rewards Gold Card: $175 per year
If you are a large spender (and therefore earn a lot of rewards) you will definitely come out ahead. But if you’re someone who only spends $1,000 or so a month, the value of your annual rewards might not even beat the fee.
PRO: The Benefits
Perhaps the biggest selling point of American Express is the benefits they toss in. With both Gold Cards here are some of the noteworthy perks:
- Extended Warranty: With this, you will automatically get up to 1 year of additional coverage on eligible manufacturer warranties.
- Purchase Protection: This covers eligible purchases if they are stolen or accidentally damaged during the first 90 days.
- Return Protection: I actually used this benefit just a few weeks ago. If you buy an eligible item and try to return it (in unused condition) within the first 90 days and the merchant refuses, AmEx will reimburse you up to $300 per item.
- Roadside Assistance: They’ll cover up to $50 per service call, a max of 4x per year. Only applies to United States, Puerto Rico, and Canada.
CON: Foreign Transaction Fee
On foreign purchases, AmEx tacks on a 2.7% surcharge. Now it is true that most credit cards charge a 2-3% fee for this, but many of the premium cards don’t charge it at all. For example in this Chase Sapphire Preferred review I wrote, I highlight the fact that its annual fee is less and there’s no foreign transaction fee. So considering the cost of the Gold Cards, it’s disappointing they charge this fee.
PRO: Must Pay In Full
Both of these are charge cards. Unlike credit cards, charge cards require payment in full each month (so you can’t carry a balance). For those who may be tempted to overspend and rake up debt, this is obviously a good thing. In fact, it’s too bad there aren’t more charge cards on the market.
Conclusion?
Both the Gold and Premier Rewards Gold can be a good deal, but only if you are a heavy spender. If you’re not, one of the lower level charge cards like the American Express Zync ($25) or the Green ($95) would probably be more logical.
When it comes to travel, the AmEx Gold makes a lot of sense because of the airline rewards system you get. But on the other hand, with the 2.7% surcharge for international spending, it’s not the best choice for spending while traveling to foreign countries. Something like the Chase Sapphire Preferred would be a better bet.
Disclaimer: The views and opinions expressed in this article are those of Michael Dolen and CreditCardForum.com. The articles are intended for informational and entertainment purposes only. They do not necessarily represent an opinion or endorsement from Check Advantage or its parent company.
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