Why I’m Considering Ditching All Of Our Premium Credit Cards

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.

AMEX Platinum

I’ve already ditched my Platinum card.

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Here are some of the reasons why:

Just to name a few. I still kept some of my other premium cards. However, the banks are starting to push the limits.

Citi Prestige

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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:

Will my annual fee be refunded if I decide to cancel my card due to these changes?

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.

Chase Sapphire Reserve

sapphire_reserve_card

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?

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

I’d also be losing out on the travel coverage that the Sapphire Reserve provides. This includes Trip Delay, Trip Cancellation and Trip Interruption as well as Lost Baggage and Bag Delay coverage.

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.

AMEX Marriott Bonvoy Brilliant

Marriott Bonvoy Brilliant

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.

Other Options

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.

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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.

Final Thoughts

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

14 thoughts on “Why I’m Considering Ditching All Of Our Premium Credit Cards”

  1. Your calculation regarding the CSR seems off to me. If you compare it to the CSP then you also have to take into account the $95 annual fee of the CSP and then the difference is really down to $55 a year and to break even you only need to spend $3,667 (using your calculation of 1.5 cents per UR point) on the CSP to cover the difference in annual fees between the two cards.

    1. I used the math I did because we already have a Sapphire Preferred and kept it so we’d have a premium Chase card for each of us to transfer miles to FF programs. Since I’m already spending the $95, I don’t consider it an additional expense. If I was going to downgrade the Reserve to the Preferred, then your math is correct.

      1. Well – then your real point is not about ditching a premium card but whether it makes sense to keep both a premium card and a lesser card in the exact same family. But most people who “shift” their spending to a lesser card in the same family aren’t keeping both of them. If you’re set on keeping a preferred, sure the cost is $150. For the vast majority of people, the incremental cost is $55 and then you can’t just take bonus spend into account, you also need to consider the additional earnings from non-bonus spend you can get with the freedom unlimited. That is a far more common combination of cards than having a preferred/reserve (and frankly, unless you were grandfathered in, getting both isn’t a choice now for most people).

    2. Another advantage of the CSP versus the CSR also presents itself if you have two (or more) people that you want to share the benefits with. The $95 annual fee for the CSP allows you to add an authorized user at no charge. If you opt for the $450 CSR, adding the authorized user costs an additional $75.

    3. That is exactly my thought. Plus the CSR offers medical evacuation coverage, 6 hour versus 12 hour trip delay coverage, and a priority pass membership. Well worth an extra $55 per year.

  2. The AMEX PLAT is my go to travel card, largely because my home airport is PHL and we have a AMEX Lounge, I travel at least once a month, so I use the lounge no less than 12 times a year. I’m getting rid of my prestige, its a shell of its form self. I have a Ritz Carlton Card, and I use the card for the automatic 100 dollar savings when booking 2 round trip tickets . But I agree with you that its becoming harder and harder to justify a 425 dollar annual fee, when the vast majority of people arent at least breaking even.

    1. Everyone should look at their cards to make sure each one makes sense. If you have a Centurion Lounge where you fly from frequently, the AMEX PLAT is a great choice. For the same reasion, I don’t want to lose all Priority Pass access because the two lounges in Orlando we visit are part of that network.

  3. If you’re considering ditching your Reserve card because you have or would get the Preferred instead, then I’d argue the difference in annual fee cost between the two would be $55. The $150 you state minus the $95 you’d pay for the Preferred. Spending $3,667 in non bonus categories would be the break even in that scenario. $3,667 x $0.01 = $36.67. $36.67 x 1.5 = $55

    1. Travel benefits from the Preferred are almost the same except for the very upper end of the scale and paying for trip delay at 6 hours instead of 12. Honestly, I’m only worried about trip delay if it’s overnight and both cards cover that.

  4. I ditched the Prestige card last month after having it for several years. They keep gutting the benefits, and other than the fourth night free benefit, which quite honestly is not the easiest to use, I am picking up the CSR. The problem with the 4NF is that I rarely stay for four nights. I may do a three day weekend, or a trip of a week or two, but when staying for anything other than four nights, I can usually find a comparable rate elsewhere.

  5. I have the CSR, CTYP, and AMEXHA. In light of the massive wipe out of benefits by CITI, I am seriously considering cancelling the CTYP (probably will when my annual dues comes up).
    The wipe out of travel benefits and the change in 4th night benefit make the card almost worthless to me. What is CITI thinking? That people are willing to pay $495 so that they can get 5X the points for restaurants and airfare? Anyone who can do the math will see that this is absurd.
    I was actually thinking of cancelling the CSR and keeping the CTYP, until CITI totally wiped out the travel benefits this past week. So now for sure I am keeping the CSR. Chase executives must have been screaming for joy when they learned about what CITI did to the Prestige’s travel benefits.

    1. The CSR is the last major bank standing when it comes to earning and benefits. AMEX PLAT still has great benefits if you use them and CTYP can still earn a bunch of TY points but CSR combines them both. I’m just not sure how much more it’s worth than the CSP.

      1. Background: I travel a lot internationally for leisure. For me the $55 extra cost to for the CSR is worth it. I have the AMEX Gold, and it is a keeper for me since the effective cost to me is only $30/year. 2 cards of mine heading for the chopping block are the CITi AA and AMEX Delta, plus the CX Visa (unless they give me a strong enough incentive to keep the cards).

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