Amex Platinum Changes
The other day I was flying on Cathay Pacific from Tokyo to Hong Kong. Towards the end of the flight, right around the time the airline disengaged the IFE system, I looked over to the magazine rack where I found the latest copy of Bloomberg Business Week. I was excited, because it contained the latest article on Sapphire Reserve. I had already read the article online, but seeing it in print confirmed that the cover photo while cool, is perhaps the most disturbing thing ever. (It is 10X more haunting in print than online!)
It turns out that while all of us were falling in love with the Sapphire Reserve, so were the millennials. So much so, that Bloomberg and a ton of other publications have been fascinated by the card. Chase has hit a homerun, although one they have paid dearly for. The card is generous and it costs them quite a lot up front. This buzz comes at a cost after all.
Now I imagine somewhere atop American Express world headquarters executives were a little disturbed that a premium card from Chase was getting so much attention. Positive attention! They must have thought that something needed to be done in order to save their beloved Platinum. I can also only imagine that they told each other that they wanted to make it seem like they were making a YUUUUGE change when really they were preserving their bottom line.
Amex Platinum Enhancements
So this week American Express announced officially (Huge shout out to Ninja X who told me about this before it broke anywhere else) that all personal flavors of the Platinum card will earn 5X Membership Rewards on purchases directly from an airline, while the Business Platinum will earn 1.5X on purchases over $5K. (Starting October 6, 2016) To be fair, they do say these changes ARE NOT in response to Sapphire Reserve, but come on. No one has ever taken such a disturbing picture of people loving an Amex Platinum before! This just has to be a response! They want Bloomberg and others to come a knockin’.
Or more specifically, they want some press coverage talking about how their premium Platinum cards are now “enhanced”. And they are getting it. The news of these changes has just recently been confirmed and already CNBC has put out the following article:
Ah, that’s better. Soon no doubt we will see crazy photos of people lovingly caressing giant Platinum cards while eating food from the buffet at a Centurion Lounge. The above three paragraph article from CNBC only conveys what is in the press release, but it puts the message out there that Amex is responding and that is what they want.
Is This Good Enough?
The truth is though that these changes simply aren’t good enough. Membership Rewards aren’t worth as much as Ultimate Rewards, so 5X vs. 3X isn’t an apt comparison, plus the Sapphire Reserve earns a bonus on ALL TRAVEL and ALL DINING while the Platinum earns just 1X on everything but direct flight purchases. When it comes to earning, the Sapphire Reserve is still vastly superior.
I truly think that American Express is looking at their Platinum products closely now that Sapphire Reserve has launched, but it takes time to make significant changes. These new small earnings boosts are designed to get some press and to hopefully stop a little bleeding until they can come up with a proper response to Sapphire Reserve. They want those Platinum cards in people’s wallets during Q4 and this is their plan to make that happen.
Competition is a good thing and in this case it just made the Amex Platinum cards slightly better. Only time will tell if things will continue to improve, but with Chase and American Express in a war for the premium market, consumers do stand to gain quite a lot. We already have perhaps one of the best cards ever released in the Sapphire Reserve. Hopefully American Express will follow up this modest enhancement with some serious changes that will make them competitive again, because this just isn’t cutting it.