The New Amex Gold Offers Best Value On The Market
The new Amex Gold card came out a few weeks ago and it was the most well received launch since the Chase World of Hyatt card. That is for good reason, the card is pretty awesome! But how does it compare to what many think is the best (currently available) card for racking up value, the Chase Ink Cash?
I did some back of the napkin calculations and it appears that in many cases the American Express Gold card offers better value.
You are probably thinking that I am blowing smoke right now. I mean the Ink Cash earns 5X Ultimate Rewards (UR) points at many places and the best the Amex Gold card can do is 4X Membership Rewards (MR), strike one! Chase UR points are worth more than Amex MR points too, strike two!
But the key here is the earning categories and the stacking possibilities. I am going to be focusing on maximizing point production via what I like to call value spending. Value spending is where you purchase something at one place to use at another place to earn bonus points. Like 3rd party gift cards. I will also take a look at racking up points via increased spending.
For this exercise I will value Chase UR points at 1.8 cents a piece and MR points at 1.5 cents a piece. I think these are fair valuations, but you can plug in your own personal valuations too.
Let’s say you need to purchase something from Target. You could go to a Target and get 1X earning from each card and buy it direct. This is what most people out there do and it’s lame. The better option is to use either card at a place that triggers a bonus to purchase a Target gift card. You then use the gift card at Target so that you are getting maximum value for the purchase.
Doing this with your Chase Ink Cash card would net you 5 UR points per dollar worth 1.8 cents each. That is a return of 9% on your purchase.
If you use your Amex Gold card you would get 4 MR points per dollar worth 1.5 cents a piece. That is a return of only 6%. But that is not taking the bonus category into account, grocery stores. Pretty much everyone has a grocery store with a fuel points program near them. Even at their regular 2x fuel points earning rate on gift cards that would net you another 3% in value, leaving you with a 9% return. Those calculations are based on 2x earning and a 15 gallon fill up. You can get even more value since many programs allow up to 35 gallons per redemption but I am keeping it reasonable. When the 4X fuel point promos come around the return on your purchase jumps to 12%.
The Amex Gold card will, at worst, net you the same return on value spending but you can often get 3% more value than the Ink Cash. This doesn’t take the frequent 3rd party gift card sales that grocery chains have into consideration either.
The next area that we would compare the two cards is in the increased spending area. This is where you purchase Visa or Mastercard gift cards at stores that earn bonus points in order to rack up points quickly. You then use the gift cards to pay bills or to liquidate them in other ways.
I will be focusing on the regular rates of the gift cards but there are often sales. These sales happen at office stores and grocery stores often but I would give the edge to office stores. That is something that needs to be considered if this is a big part of your point accumulation but I am going to focus on regular rates for this exercise.
The best option at office stores is the $300 Visa cards that Staples has online. These have a cost of $8.95. Each card purchased would produce 1,545 Ultimate Rewards points. That is a cost of $0.0057 per point, or 32% of the value of a UR point.
Grocery stores offer $500 Visa cards at a cost of $6.95 per card. This is where the categories come into play since the volume is much higher and the cost per dollar is lower. Each card purchased would net you 2,027 Membership Rewards points. That is a cost of $0.0034 per point, or only 23% of the value of a MR point.
This shows that it is easier and more cost effective to increase spend with the Amex Gold card. This is even after taking into account the fact that UR points are more valuable. I should mention that Amex is less forgiving with this type of spending so be cautious. It may not be worth pursuing.
The other thing to consider is the annual fee of the two cards. The Chase Ink Cash has no annual fee while the Amex Gold card has a $250 one. That $250 is offset some by the airline incidentals and food credit but it is still substantially more.
You have to account for the fact that the Gold card has a better earning structure and is a stand alone card. It doesn’t need another premium card to transfer points like the Ink Cash does so the annual fee is kind of a wash in my book.
As you can see, I believe the American Express Gold card offers the better return in value vs the Ink Cash card. It may offer the best return of any card currently available on the market if you use it right. There is currently a 50,000 point welcome offer via referral (Shawn’s Referral). You can even rack up extra points with American Express’ new referral system.
I plan on picking one up even though I am not eligible for the welcome offer; I carried the card in the past. At least my wife should nab some points by referring me.