When it comes to picking a rewards credit card, financial advisors typically recommend a few basic ground rules: never charge more than you can pay off in a month, make on-time payments and avoid cards with hefty annual fees. As a rule follower (and someone who values good credit), I’ve always abided by the first two—but not the last. In fact, my card of choice is American Express’ Platinum Card, a charge card that carries a whopping $450 annual fee.
I realize that sounds crazy. When I first saw that fee, I thought, what a waste of money! What benefits could one card provide that would justify such an expensive price tag? And aren’t there better things to do with $450 than pay for a credit card, when there are plenty of free and lower-cost options?
While these are all good points, the truth is, when you fully understand and take advantage of all a reward card’s perks, it can actually pay for itself. And then some.
This isn’t a starter rewards card—American Express bills it as a premium offering—but it’s not as hard to get as you may think. The company doesn’t disclose requirements, but CreditKarma recently released stats revealing the average credit score for a CreditKarma user approved for the card was 716—which falls squarely into the “good” category.
I’ve now been using this charge card since late 2014. And while exactly how much I save varies according to which features end up being the most attractive in a given year, it’s safe to say I consistently get at least $450 worth of benefits. So far in 2016, I’ve saved $640—and counting—thanks to some of these key perks. (And that’s not even factoring in money saved by redeeming points earned from the sign-up bonus and daily purchases.)
Right off the bat, the $200 airline statement credit—which I use for incidentals like baggage fees and in-flight purchases—effectively knocks the annual fee down to $250. And at $25 (or more) for every checked bag, it is not hard to apply this credit over the course of a year.
However, if you don’t fly enough to spend $200 a year, or have other ways of getting free checked bags (like through another rewards card), there might be another solution: ThePointsGuy.com found earlier this year that if you select United as your preferred airline, you can buy reimburseable Amazon.com gift cards through the MileagePlus X app.
It’s also worth noting that this benefit resets every calendar year, so it’s possible, depending on when you open the card, that you can redeem $400 before the second annual fee is due.
Annual savings: $200
The Platinum card also offers complimentary access to more than 900 airport lounges worldwide, including Delta Sky Clubs (otherwise $59 for a single-visit pass) and American Express’ luxe Centurion Lounge ($50 for a day pass, only available to those with valid Amex cards).
While this perk may seem superfluous on the surface, lounges offer plenty of amenities—like free newspapers and magazines, snacks and drinks—that translate to real money. By the end of the year, I’ll probably have taken five round-trip flights. Given that it’s pretty easy to spend $10 or more for a water bottle, snack and magazine at Hudson News on each leg on the trip, this perk can add up over the course of the year.
As a bonus, club access can be a huge boon in the event of major delays or cancellations—when everyone else on your flight is in line to speak to a gate agent—because lounge employees are, in fact, airline employees who can facilitate reservation changes.
Annual savings: About $100. (If you’ve purchased one-day lounge passes, this can save you considerably more.)
When it comes to airport-related perks, last but not least is the reimbursement for a Global Entry ($100) or TSA PreCheck ($85) application fee. These are the programs that give pre-approved travelers expedited customs and airport security clearance.
Memberships are good for five years, so this isn’t a yearly monetary benefit—but it’s a great time-saver. As of July this year, TSA says 97 percent of PreCheck passengers wait less than five minutes in the security line, which is consistent with my own experience over the last two years. If you’re running late, this could be the difference between making your flight or not.
One-time savings: $85-$100
Platinum cardholders also have access to Amex’s Fine Hotels and Resorts (FHR) program. When you book a stay at a participating hotel, you’re entitled to special extras, like daily breakfast for two (worth $60) and a unique property amenity like $100 off spa services or a complimentary fourth night.
Earlier this summer, my husband and I stayed four nights in an FHR property in Miami, where we used up our breakfast allowance at the on-site cafe, as well as a $100 property credit, which we applied to our total bill. (We also got a room upgrade, early checkin, late checkout and free Wi-Fi.)
As a caveat, I should mention that FHR properties tend to be on the fancier side. However, I’ve found that when you apply the perks, one night’s stay can be cheaper than more affordable options in the area.
Annual savings: It depends on how often you use it, but this year, we’ve saved $340 so far.
One of my favorite Platinum card benefits is purchase protection. Basically, if you used your card to buy something in the last 90 days, and it’s later stolen or damaged, you can file a claim for total reimbursement—up to $10,000 at once and $50,000 for the year. Amex is generally considered the gold standard for this benefit, as they typically require less paperwork than other cards when you’re filing claims, and they’ll even cover lost merchandise for Platinum cardholders.
In my experience, Amex is pretty generous with their approval process. I haven’t had a reason to use it this year, but in the past, I’ve been reimbursed when the Christmas tree I bought didn’t look the way I thought it would and the company refused to accept the return; and my husband was reimbursed when he broke a pair of Bose headphones.
Annual savings: Again, it depends, but last year we saved more than $150.
Bottom line: Rewards credit cards aren’t just for the wealthy or frequent fliers. (Although this particular card may appeal most to those who travel a lot.) If you’ve been eyeing a card with an expensive fee—and you’re a responsible credit user—it’s worth digging into the benefits to learn whether it could provide enough savings to offset the annual fee before you ever redeem your first point.
And don’t forget: It never hurts to call up the company and attempt to negotiate a waived or lowered rate for the next year. They might say no—but then again, they might say yes.