It's Over: Why I'm Cancelling My American Express

Dear American Express,

It is with great sadness and a heavy heart that I announce it's over. Even though we've shared some unforgettable moments, bought beautiful experiences together, and dined in fancy airport lounges, you've changed, and now it feels like you're taking advantage of me. It's like you think I'm made of money and will keep paying you $695 a year just because I'm too lazy to leave. But I've got news for you: I am too lazy, but I'm not gonna let that stop me from finally cutting it off.

Alright, so for being serious for a second, American Express just recently raised the cost of their platinum card to a staggering $695 a year. After having this card for nearly seven years, I'm sad to say that it's time to let it go. Now, usually, I'm an advocate for never closing your credit cards. After all, you're closing down an account, you subsequently have less credit available to you on your report, and that lowers your score. But in this case, the recent price hike makes it very difficult to justify keeping.

Not to mention, as a self-proclaimed credit card enthusiast, I'm just not a fan of their new benefits. Here's why. And also, big thank you to Public for sponsoring this video, but more on that later.

Now to start, the American Express platinum has historically been the go-to of premium rewards credit cards with unbelievable benefits, perks, and features that could easily be worth a few thousand dollars a year. Incredible customer service and a reputation that everyone knew and trusted. After all, there's a reason why 333 songs throughout 115 artists and 30 albums all mention the lyrics "American Express" in them. Even though most people might see it as a pointless, expensive status symbol for reckless consumerism, the truth is, yeah, it is. Although if you know how to use it correctly, you could very well make a few thousand dollars a year in profit.

But American Express is not in the business of losing money, so obviously all of that profit has to come from somewhere. After tumbling revenue and a decline in consumer spending during the shutdown, they did the unthinkable: they revamped their card set to increase fees, and then they sat back and watched those profits just roll in. They began by making the card metal in 2017 as a way to compete with the millennial favorite Chase Sapphire Reserve, which took the spotlight when it was first announced.

In fact, that Chase Sapphire Reserve was so popular that they ran out of metal cards within the first week and cost the company $330 million from users who extracted every little bit out of the card that they could. But American Express fought back, and by doing so, they increased the rewards but also their price to the $695 that you see today.

So here's what you get for almost $60 a month, because the people who know how to do this correctly make a lot of money. First, for new card holders, they're extremely enticing with a 100,000-point sign-up bonus when you spend $6,000 in the first six months. Most likely, they're doing this as a way for customers to overlook the $695 fee. But in the first year, I have to say, the 100,000 points pretty much just pays for itself.

On the most basic lowest level, the points are worth about half a cent each, so they're pretty much giving you back $500 right off the bat just for getting the card and meeting the minimum spend. However, gift cards could often be redeemed at a value of 0.7 to 1 cent each. So now we're getting into the $700 to $1,000 range of value if you shop at one of their partners. And if you transfer those points to one of their airline affiliates like Aeroplan or Delta, you could get a value as high as 2 cents each, depending on where you're going, meaning this offer is worth anywhere from $500 to $2,000 right from the very beginning.

Second, you'll get $200 a year in Uber cash. However, this is broken down into a $15 a month credit with a $35 credit in December that does not roll over into the next month. So in other words, if you don't use Uber in the first half of the month and then in month 7 you rack up a $100 charge, all of those unused credits are gone. Now, on the bright side though, even if you don't use Uber, that $15 credit is also applicable towards Uber Eats, which is usually enough to pay for the tip and delivery cost.

The third, you'll also receive a $200 airline credit, but there is a bit of a catch. You must specify one airline each and every year that you want to receive the credit on, and those credits are only applicable towards incidentals like checked bag fees, seat selection, and lounge access. So it's not like you could go and buy a ticket and then get $200 off.

The fourth, you'll get a $200 fine resorts and hotels credit. This is done through an American Express portal that allows you to book stays in a wide selection of hotels that offer you early check-in, late check-out, daily breakfast for two, free Wi-Fi, flexible cancellation, and a complimentary $100 resort credit. You'll also typically get a 1 cent redemption if you pay with points, so this could be a really good perk if you use it.

Fifth, they'll give you a $100 credit for TSA PreCheck every four years and/or a $179 Clear membership credit. Again, if you're traveling, especially internationally, and you want to skip the line, this one is worth it. The sixth, this one is new, but you'll get a $300 annual Equinox gym credit in $25 a month increments. Though, even though Equinox gyms are not everywhere and they're very expensive if you go to one anyway, this is pretty much like money back in your pocket.

The seventh, you'll get $155 in credit towards a Walmart Plus subscription, which basically allows you free delivery on groceries and free shipping on other items purchased from Walmart. Now, eighth, you'll get a $100 credit towards Saks Fifth Avenue, which is enough to buy a clearance pair of shoes if they happen to be in your size. Ninth, you'll get a $240 entertainment credit, which covers $20 a month free towards Peacock, Audible, SiriusXM, or The New York Times.

It's also not including the other benefits like purchase protection, extended warranty, Delta and priority pass lounge access, as well as rental car upgrades. So all in all, if we add everything up and you use it correctly, you could get a top-line value of about $3,600 in the first year—all for the cost of $695.

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So thank you guys so much, and now with that said, here's why I'm canceling my American Express. Well, to be completely honest, I wanted to cancel this card one year ago when they increased their annual fee from $495 to $550, and I wasn't using it at all because of the shutdown. But that's when I stumbled upon this video from Mark Reese, who I'll link to down below in the description.

For anyone watching this video who has any American Express card whatsoever, I want you to listen to this part very closely because these next two minutes could easily be worth anywhere from $300 to $1,000 if you follow along. Mark explains that because so many people were canceling their American Express cards during the pandemic, they were doing anything they could to get people to stay. That includes what's called the retention offer.

This is what happens when you call or chat with your customer support team, explain your reasons for canceling, and once they walk you through the benefits, simply ask if there's a retention offer to keep you as a customer. And as long as you're in good standing, most likely they'll give it to you. So after watching this video, I followed his steps, I spoke with the customer support team, and 10 minutes later, they offered me 50,000 points to keep the card open for another year.

So I did. To me, that was enough to cover the annual fee, and it made it worth it to keep in conjunction with everything else. And for them, it's probably a very easy way to keep people as customers, especially when they know that almost a third of credit card users never even use their points to begin with. So there's a chance they just deposit those 50,000 points and they just sit there. Well, actually, in my case, they did just sit there, but I'm gonna use them at some point.

It's probably safe to say that the longer you've been a customer and the more you've spent on the cards, the harder they're going to try to keep you from canceling. Although for myself, if you're curious, here's what I think about the new benefits and why a lot of people will probably end up canceling over the next year.

First, I just don't get the value from the Uber credit. What makes this so difficult is that I rarely ever use the service, and when I do, it's typically a $50 to $100 charge. So when the unused credits don't roll over, it's like I'm otherwise wasting $15 a month to get nothing. Of course, I could use this towards Uber Eats, although most of the time we're either eating at home or going out to a restaurant anyway. So spending money just for the sake of using the credits ends up costing more money than what I would expect to save.

Second, the same thing also applies to the $200 airline credit. Like, I've only taken two flights throughout the last year, both of which didn't have any incidentals that I found any value in. The third, the one time that we've used the $200 resorts credit, it was awesome. We got an upgraded room, a $100 dining credit, a $50-a-day breakfast credit, free Wi-Fi, and early check-in. But when you only stay at a hotel once a year, if that, it just doesn't make a lot of sense, especially when Airbnb tends to be a lot more accommodating and competitive in terms of price.

The fourth, the $300 Equinox credit would be nice, but they don't have any locations in Las Vegas, and I just use the community gym for free. So this benefit is rather limited in terms of who could use it. The fifth, I've used the $100 Saks Fifth Avenue credit in the past, and I'll admit I've got some free stuff. But the problem is that they issue that in a $50 credit every six months, which makes it pretty much impossible to buy anything for under that on their website, besides a pair of socks, which by the way could be as much as $30 for a single pair before tax.

So this just seems like I'm unnecessarily spending money for the sake of using a credit before it expires. And six, we've got all the other perks that I would just not use on a regular basis that I don't feel are worth spending money on. This includes the Walmart subscription, the entertainment credit, and ShopRunner, especially when I order everything through Amazon Prime anyway.

Now, I will admit the airport lounge access is incredible, and the variety that you get is fantastic. But the last time I tried using it, the Centurion lounge was actually at capacity, and they had to put me on a waitlist in order to get in, which didn't give me enough time before the flight. The Points Guy blog also mentioned that the Amex Centurion lounge will begin charging members a $50 fee for bringing in a guest starting in 2023. So it seems as though too many people are beginning to use this, and Amex is doing what they can to reduce the volume, which is not necessarily good for the rest of us.

Now, in terms of who should get this card and keep it beyond the first year, if you're somebody who travels frequently, stays in hotels, lives in a big city, works out at Equinox, and orders Uber Eats on a regular basis, then you can absolutely make this card pay for itself many, many times over. Just the Uber, Equinox, and hotel benefit pay for the card's annual fee alone, and then anything else beyond that is pure profit, especially if you travel more than a few times a year.

It could also very well be worth it if you frequently use the airport lounge access, use the hotel room upgrades on a regular basis, and use their purchase protection for an extended warranty. Although the issue comes from the fact that unless you're spending this money anyway, it makes no sense to join a $300 a month gym just to get a $25 a month discount. So it winds up costing you more money than you would expect to initially save.

Now, in my case, I have other American Express cards, which makes it very easy to keep the points in the event they need to cancel a card. But it is important to mention that they do allow you to downgrade to more affordable cards if you want to keep that credit line open. Although American Express does have a policy of only one sign-up bonus per card per lifetime, so once you downgrade to a card, you're not going to be eligible to get that sign-up bonus ever again in your life.

To me, it seems like they're purposely making these changes to be able to shake out all the people who don't add to the bottom line of American Express. Like in the past, those people would have gladly paid a $495 annual fee to use the lounge access on a regular basis, get monthly hotel room upgrades, and otherwise receive way more than they would spend. But with the gaining popularity of financial minimalism, credit card churning, and financial responsibility otherwise becoming cool, apparently too many people got on board, and that did not translate into a profitable business model.

Of course, as a business, I get it: you just can't be giving away stuff for free without making that money back in other areas. And unlike Chase, it's not like they could get you over to a bank account with loans, mortgages, and financial planning. So American Express seems to be taking a very methodical approach on the type of client that they want to retain, which seems to be very wealthy people who live in big cities and spend a lot of money on travel, dining, hotels, and the gym.

That means even though the American Express Platinum is no longer as good as it once was for the average person, if you fall within their wealthy, spendy demographic, you're getting way more value than you ever did before. So I would say this is probably a good change for 20% of their customer base, but it's bad for the other 80%.

But in American Express's defense, they are going after their ideal customer, and that's what works for them. I've otherwise been a happy Amex customer since 2012, and they're a great brand, but the Platinum card for many people is just not as good as it used to be. If you agree with that, just do me a quick favor and subscribe if you haven't done that already or hit the like button for the YouTube algorithm, because it does help out the entire channel tremendously.

So with that said, you guys, thank you so much for watching. Also, make sure to add me on Instagram and to my second channel, The Graham Stephan Show. I post there every day I'm not posting here, so if you want to see a brand new video from me every single day, make sure to add yourself to that. And lastly, if you want that totally free stock worth all the way up to $1,000, use the link down below in the description and sign up for Public using the code Graham. You may as well do that; it's pretty much like free money. Let me know what stock you get. Thank you so much for watching, and until next time!