American Express Gold Card Review

Full Review of American Express Gold Card

Pros Explained

• Exceptional Rewards on Flights, Dining, and Supermarket Purchases: The 3 points per dollar spent with airlines beats the rates of most cards, even dedicated airline cards, which typically offer 1 or 2 points per dollar. Some cash-back credit cards offer 4% back on dining, and the Blue Cash Preferred card from American Express gives you 6% back on the first $6,000 spent each year at U.S. supermarkets, then 1%. But if you plan your points rewards carefully, you may be able to squeeze more value than those cards provide out of the American Express Gold Card’s 4X rewards rate on dining and supermarkets and its flexible redemption options.
• Dining and Airline Fee Credits Largely Justify the Annual Fee: Much of the card’s $250 annual fee can be justified if you used its $100 airline-fee credit on checked-baggage charges or in-flight purchases and redeemed the $10-a-month dining credit at Shake Shack, or a few other eligible chains, or through ordering via Seamless or GrubHub. And with the card’s high rewards rates at restaurants worldwide and U.S. supermarkets, that justification is even easier. 
• Redemption Options Include Airline and Hotel Transfer Partners: Redeeming your rewards directly with Amex will give you up to 1.54 cents per point in value according to Investopedia's points valuation model. Alternatively, you can transfer your points to the card issuer’s airline and hotel program partners and potentially get more value than that. For example, the card allows 1:1 transfers to airline miles with most carriers, and miles are estimated to have an average value of 1.6 cents apiece (if transferred to Delta or a few other airlines, for example), according to Investopedia's valuation model. Points transferred to Hilton Honors earn two points in that program, with each point worth 0.44 cents on average.
• Payment Flexibility with Pay Over Time and Plan it Features: American Express has added flexibility to payments on its cards with its pay over time feature, which is for charges over $100, with a revolving line of credit that charges interest on any balances carried forward. Their Plan it feature also allows payments on large purchases to be split up and paid over a set number of months in exchange for a fixed fee.

Cons Explained

• The Annual Fee Is More Than Double That of Many Other Cards: Cards with rich rewards often cost $95 or so a year, making the American Express Gold Card's $250 fee among the pricier ones out there, short of super-premium cards with their $500-plus fees. If you don’t eat out or travel frequently enough to maximize the card's dining and airline credits, or you’re generally averse to fees, the card's cost may outweigh its benefits for you.
• American Express Isn't Accepted as Widely as Visa or Mastercard: While an increasing number of retailers are accepting American Express, you'll still have an easier time with both big and small merchants if you have a Visa or Mastercard. That's especially the case abroad, where American Express' reach is somewhat limited. 
• Superstore and Warehouse-Club Purchases Don't Earn Supermarket Rewards: If you buy most of your groceries from retailers like Walmart, Target, Costco, or Sam's Club, you won’t be able to take advantage of the card's generous supermarkets rewards rate. Instead, you'd need to change your spending habits to shop more at actual supermarkets.

The American Express Gold Card is best suited to people who eat out and fly enough to justify the card's $250 annual fee through its generous dining and airline rewards and credits. With rich rewards on supermarket spending, the card is also a fine choice for those who spend heavily on groceries. However, it's also a card for those willing to master the use of points in rewards programs, as opposed to the simpler solution of receiving money in your account by using a cash back card. 

On average, American households spent $7,729 on groceries and eating out in 2017, according to the Bureau of Labor Statistics. With that spending alone, you’d earn 30,916 points per year with this card. That annual spending could be worth a few hundred dollars, and possibly more depending on how you use or transfer those points. 

The 3 points per dollar spent directly with airlines and through amextravel.com would also deliver decent savings for frequent flyers. Let's say you flew five times a year, and each time paid the average domestic fare, which is $367 according to industry group Airlines for America. You'd earn more than 5,000 points with the card, which could translate to $108 or so a year towards flights when converted to airline points.  

American Express Gold Card One-Time Offer

As a new cardholder, you'll earn 60,000 bonus points after you spend $4,000 in the first six months. If you redeem your points for travel directly with Amex, the one-time offer could be worth up to almost $700, which isn't a bad return on spend for $4,000 worth of expenses in six months. 

Even converted through a less lucrative option, the one-time offer points might still justify the card's annual fee in full for the first year. That allows you some time to test-drive the card and determine whether it’s the right fit for you before its renewal fee looms.  

Rewards Earning Details

The card offers 4 points per dollar at restaurants worldwide and on the first $25,000 spent each calendar year at U.S. supermarkets. You'll also earn 3 points per dollar on flights booked directly with airlines and through amextravel.com. On all other purchases, you’ll receive 1 point per dollar.

It's important to note that while you’ll net points by eating at restaurants worldwide that accept Amex, only purchases at U.S. supermarkets are rewarded. Also, flights booked with third-party services such as Kayak and Trivago are not eligible for bonus rewards.  

Rewards Redemption Details

You can redeem your points in many different ways, with varying redemption values. The options, with values per 10,000 points redeemed, include statement credits toward card charges ($60), paying with points at checkout ($50 to $70 in most cases), or buying gift cards from Amex ($50) or a host of airlines, restaurant chains, or retailers (from $70 to $100, depending on the company.) 

If you redeem your rewards by transferring them to one of Amex's partners, however, you may be able to get more for your points than these amounts. 

Transferring Points

You can transfer Amex Membership Rewards points to a host of airline plans and several hotel loyalty programs. Airline and hotel programs typically have dynamic pricing structures, which allow you to maximize the value of your points based on how you redeem them. 

The most generous of Amex's partners offer 1.6 to 2.0 points per Amex point redeemed, while most trade "at par"—that is, an airline or hotel point for every Amex one. Here's a list of Amex’s partners and the transfer ratios:

• Aer Lingus AerClub: 1:1 
• AeroMexico Club Premier: 1:1.6 
• Air Canada Aeroplan: 1:1 
• Air France / KLM Flying Blue: 1:1 
• Alitalia MilleMiglia: 1:1
• ANA Mileage Club: 1:1 
• Avianca LifeMiles: 1:1 
• British Airways Executive Club: 1:1
• Cathay Pacific Asia Miles: 1:1
• Choice Privileges: 1:1
• Delta SkyMiles: 1:1
• EL AL Israel Matmid Club: 1:0.02
• Emirates Skywards: 1:1
• Etihad Guest: 1:1
• Hawaiian Airlines HawaiianMiles: 1:1
• Hilton Honors: 1:2
• Iberia Plus: 1:1
• JetBlue TrueBlue: 1:0.8
• Marriott Bonvoy: 1:1
• Qantas Frequent Flyer: 1:1
• Singapore Airlines KrisFlyer: 1:1
• Virgin Atlantic Flying Club: 1:1

How to Maximize Your Rewards

Using your card everywhere you buy is the first step. Be especially attentive to using only this card in the categories for which it offers the richest rewards, such as dining and groceries. Try to concentrate your food shopping at supermarkets over alternative retailers that sell food; purchases at superstores and warehouse clubs do not earn rewards, nor does food bought from convenience stores. Try, too, to buy non-food items you need at the supermarket, since all purchases made at supermarkets qualify for the 4-points-per-dollar rewards. 

When it comes to using your hard-earned points, consider skipping the generally pricey redemption options offered by Amex in favor of transferring your points to partners. Making the most of partner programs means not only joining them, naturally, but familiarizing yourself with their conditions and staying abreast of any changes to them, including time-limited specials or bonus opportunities. 

If you have a flight or hotel stay coming up, check for itineraries with Amex's partners and compare what it would cost you in points or miles to the cash price. Make a rough calculation of the comparative benefits. If you can get more than a cent per point or mile out of the redemption, it's more than you'd get from the point rewards you’d earn by booking directly through Amex.

American Express Gold Card's Outstanding Benefits

The card offers up to $120 in dining credits each year—that's $10 per month in automatic statement credits when you use your card at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shack locations. Before you start swiping, though, enroll in the program. Otherwise, you’ll be paying the full bill out of pocket. Be aware, also, that you need to use the credit every month, since it won’t roll over to the next one if it isn't used.

The card also comes with a $100 annual airline fee credit. The caveat is that you'll need to choose a single qualifying airline once per year, and the credit only counts toward things like checked baggage fees and in-flight meals—not for tickets or seat upgrades.

Lastly, the card provides payment flexibility with its Pay Over Time and Plan It features. Pay Over Time allows charges over $100 to be paid over time just like a credit card at a set interest rate determined by the credit quality of the applicant. The Plan It feature allows the flexibility to split up large purchases into smaller payments over a period of months in exchange for a set fee.

Standard American Express Benefits

• The option to pay over time on eligible charges of $100 or more
• Special benefits at The Hotel Collection properties 
• Baggage insurance plan
• Rental car insurance
• Premium roadside assistance
• No foreign transaction fees
• Purchase protection
• Return protection
• Extended warranty protection
• Complimentary ShopRunner membership
• Access to Amex Offers

Cardholder Experience

American Express ranks second in J.D. Power's 2019 Credit Card Customer Satisfaction study, ranking among the best across all categories. Amex offers free access to your FICO credit score, which most other major card issuers offer and can be helpful if you’re working to build or maintain a credit history. 

If you have questions, you can reach a customer service representative by phone 24/7, which is also standard among major card issuers. There's also a live chat option when you’re logged into your account, which isn’t a standard feature.

Remember, though, that you may run into acceptance issues that you might not have with a Visa or Mastercard credit card.

Security Features

American Express offers security features that are mostly standard for the credit card industry. One exception is the ability to freeze and unfreeze a particular card in the Amex mobile app, which is a useful feature if the card is lost or stolen.

Our Verdict

The American Express Gold card is an excellent choice for people who spend a lot on groceries and dining out. It also doubles as a fine travel card, with generous rewards for booking flights and a $100 fee credit to offset baggage charges and in-flight purchases (limited to a single airline). 

Given its hefty annual fee, though, the card may not pay off, at least after the first year, if you don't buy a lot of groceries at supermarkets. The same may apply if you don't dine out a lot, and so won’t benefit much from its exceptional restaurant rewards or $10 monthly credit at select dining chains. 

It's also not ideal for those who prefer to be rewarded in a simple way, in cash. If you’re uninterested in becoming a scholar of rewards programs, a generous cash back card might be a better choice. One such Amex option is the American Express Blue Cash Preferred card, which has generous supermarket and gas cash back rewards and a far lower ($95) annual fee than the American Express Gold Card.