What do you think of when you hear the phrase premium credit card. Exclusivity? Luxury? Benefits? Perks? For a while, these cards offered all of these.
The grand daddy of the premium card is the American Express Centurion card. A card that’s so exclusive AMEX has to invite you and no one knows the requirements to get said invitation. What we do know is that the card has a $7,500 initiation fee and a $2,500 annual fee. Since I occasionally run a cash register for my day job, I’ve held a few of these cards over the years. It’s wasn’t nearly as exciting as I hoped.
Personally, I’m not at that level. However, I was able to get a base level of premium card from all the major banks. American Express Platinum, Chase Sapphire Reserve and Citi Prestige. So why have I reached the point where I’m considering not holding any of these cards?
Here’s the reason:
Banks are killing the value-added proposition of keeping these cards
Sure, there’s a certain cache of plunking down an AMEX Platinum card to pay a check. But is that worth the $550 annual fee they charge for the privilege of having the card? OK yeah, you get a fancy magazine in the mail but who keeps a card for a magazine?
But what about the Sapphire Preferred or Citi Prestige. Are they worth keeping? Maybe not.
Here are some of the reasons why:
- Annual fee increase
- AMEX’s airline fee credit is hard to use
- Many cards offer Priority Pass membership
- Even more cards offer Global Entry or TSA Precheck credits
- I wasn’t using the 5x airfare category
- We don’t visit Centurion Lounges that often
Just to name a few. I still kept some of my other premium cards. However, the banks are starting to push the limits.
The Citi Prestige is a good card to earn ThankYou points but I don’t hear anyone extolling the greatness of the ThankYou program. It’s the perks the Citi Prestige provides that makes it worth the $450 annual fee. To their credit, Citi has improved the points earning potential of the Prestige and it has a very solid list of bonus categories making it the best of the premium cards for earning points.
- 5X – Restaurants
- 5X – Airfare
- 5X – Travel Agencies
- 3X – Cruise Travel
- 3X – Hotels
While they were doing this, Citi kept chipping away at the benefits the Prestige offered. The first change was to devalue the travel insurance coverage the card offered. This brought the Prestige in line with coverage offered by the other premium cards (except the AMEX Platinum which has no coverage). Even after the changes, the Prestige has some of the best travel coverage out there, making it my go-to card for travel bookings. In particular, I loved using it for award bookings where you only had to charge the taxes of the trip to the card to get full coverage for delays, cancellations and lost baggage. I also used the card to pay for all of our concert and theater tickets because of the excellent coverage provided for missed events.
Then I received this message when logging into the benefits area of our account:
The following is a summary of changes that are being made to your card benefits.
Effective September 22, 2019, Worldwide Car Rental Insurance, Trip Cancellation & Interruption Protection, Worldwide Travel Accident Insurance, Trip Delay Protection, Baggage Delay Protection, Lost Baggage Protection, Medical Evacuation, Citi® Price Rewind, 90 Day Return Protection, and Missed Event Ticket Protection will be discontinued and will no longer be provided for purchases made on or after that date. Coverage for purchases made before that date will continue to be available, and you may continue to file for benefits in accordance with the current benefit terms. Roadside Assistance Dispatch Service and Travel & Emergency Assistance will be discontinued and will not be available on or after September 22, 2019.
We are making these changes so that we can continue providing the key benefits that our customers use and value most at no additional cost. This change requires no action on your part. See FAQs under Card Benefits for answers to Frequently Asked Questions regarding these changes.
There goes pretty much everything I was charging to the Citi Prestige card. Well except when paying for hotels using the fourth-night free benefit, and we all know what’s happening to that in a few months.
I’d still earn 5x Thank You points for restaurants but is that worth an increased $495 annual fee, even taking the $250 travel credit into consideration?
The Citi FAQ on the Prestige changes does have an interesting addendum:
If you wish to cancel your card due to these changes, please call the number on the back of your card by January 1, 2020, to receive a prorated refund of your annual fee.
I’d transfer all the points out of my account in advance (and maybe sign up for a different Thank You Card because canceling a card resets your clock for new applications) but the offer to cancel and get a prorated refund of my annual fee is enticing, especially if I’m not going to be using the card for new expenses.
Now that the Citi Prestige is a questionable keep in the wallet, what about the Sapphire Reserve? It has a hefty $450 annual fee as well, which is offset by a $300 annual travel credit. Since the travel credit is so easy to use, I count it as cash. So the net cost of the card is $150 a year. But what am I getting for that $150?
- TSA Precheck or Global Entry Credit
- Priority Pass Membership
- Worldwide Primary Rental Car Coverage
- 1.5 cents per point towards bookings through the Chase portal
Having other cards that offer Global Entry reimbursement and Priority Pass was one of the reasons I was willing to get rid of my AMEX Platinum card. I can get the same rental car coverage with the Chase Sapphire Preferred and that card only has a $95 annual fee.
So what I would be losing if I canceled my Sapphire Reserve? The card’s bonus categories which are:
- 3X – Travel Worldwide
- 3X – Dining Worldwide
If I moved all of our spending to the Sapphire Preferred, I’d lose out on 1 bonus point per dollar spent. In order to make up the $150 net annual fee, I’d have to spend $10,000 (assuming a value of 1.5 cents per point) just to break even. In all fairness, I’ve never redeemed Ultimate Rewards for 1.5 cents for travel but I’d have to use that valuation as the floor of the least amount I’d ever consider redeeming them for.
It comes down to how much do I value the travel coverage.
The Sapphire Preferred has primary rental coverage for everything except expensive and exotic vehicles. Most of the travel coverages are the same except the Preferred requires a 12-hour delay before providing coverage (the Reserve’s coverage kicks in at 6 hours).
Is that worth $150? I’m not that sure.
The last thing I need to consider is if I cancel the Prestige and the Sapphire Reserve, I’d be getting rid of all of our premium cards and losing access to Priority Pass lounges. But I wouldn’t because we have one more premium card I always forget about.
The AMEX Bonvoy Brilliant is the premium card for Marriott hotels. It comes with a hefty $450 annual fee but also provides many benefits to offset the cost including:
- $300 in statement credits each year of card membership for eligible purchases at Marriott Bonvoy hotels
- Receive 1 Free Night Award every year after your Card account anniversary. The award can be used for one night (redemption level at or under 50,000 points) at a participating hotel. Select hotels have resort fees
- Priority Pass Membership good for access to lounges but not good for non-lounge airport experiences as of August 1, 2019
- Free Credit for Global Entry or TSA Pre-Check.
The $300 credit is good for any charge made at Marriott hotels, so that’s not hard to use. Once again, I’m looking if the other benefits are worth $150. If this is the only card I keep with Priority Pass access, then that has some value even if the AMEX cards only allow lounge access and not the other non-lounge benefits. Our one experience at Bobby Van’s was OK but I’m not thinking this is a huge negative for us. A free night at any hotel costing 50,000 points or less is easily worth over $150. However, that would mean I’d still have the problem of finding somewhere to use a free night certificate.
Taking all of these things into consideration, if I was going to keep only one premium card, it might just be the Bonvoy Brilliant.
There’s one more option that I can take advantage of. We’re heading back to New York and I could finally make the trip to City National Bank and sign up for the CNB Crystal Infinite card. I almost pulled the trigger on this last trip but signed up for the Bonvoy Brilliant instead.
Getting the Crystal Infinite would give me Priority Pass access and plenty of other benefits like a $100 flight credit when booking two round trip domestic flights and good (but not great) travel coverage.
So am I truly ready to ditch all of my premium cards? Probably not. What I’m willing to do is give them a really good look over and see if the value matches the price tag. Are the additional benefits these cards provide over the standard cards worth paying extra for? I’m leaning towards thinking they’re not and when the banks keep watering down or totally removing benefits, the decision to not renew is an easier one to make.
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This post first appeared on Your Mileage May Vary