Saturday, October 23, 2021

New credit card tricks: how ‘simple, fast and beautiful’ earn + spend + earn

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US cards once came with non-stop flights and credit card fees. That is no longer the case. Though they offer numerous perks, most travel cards rarely include a compelling value proposition to earn loyalty points or rewards. To make it better, select cards use special techniques to lure new customers. Amex® Ink Plus®, on the other hand, requires no introductory offers to get you started, and rewards are still “simple, fast and beautiful”.

New customer deal with a $1,250 ‘welcome bonus’

A few months ago, Amex® Ink®, upgraded to the Ink Plus® suite of cards, unveiled a new offer: a $1,250 ‘welcome bonus’, “made possible by a price reduction on all bottles of Amex-purchased alcohol”. By February 2016, the reward card had earned a No Frills® Gold Card from American Express and the “excellent overall customer” ranking from Zodiac Credit Card Club members.

The $1,250 offer was announced at a press conference in New York, held to coincide with the start of the Visa Inc. World Travel and Tourism Conference.

The unprecedented price reduction is significant, as prices for all bottles have not dropped by 50% or more in the past two years. Although it is common to see large discounts on social media posts, not many people actually see the price on the tag, so their savings is often not substantial.

To qualify for the promotional offer, consumers need to apply for a new American Express® card. After proof of purchase, they can receive up to $1,250 in “coverage.” Amex® Silver (now worth $3500) and Silver Plus (worth $4000) customers qualify for the offer as well. This is not a daily offer but rather a monthly one that runs from March through September.

Hence, to claim the package, a new customer must trade in their platinum card with a balance owed at that time.

So what are the benefits?

According to Nilson Report, Amex® Platinum customers are getting 1.75x (in terms of annual value) the average monthly spending compared to their silver card counterparts. The fees are down significantly as well, and will likely continue to drop as the benefits ramp up.

The $15 minimum spending requirement, along with the 24-hour in-store worldwide merchant network, allow cardholders to receive top end discounts. The purchase price discount is however likely to give the Platinum cardholders a bump in benefits.

However, the Platinum card is reserved exclusively for business travelers and over time will lower all products, such as the International SpreeSM reward program.

New reward points: advantages and drawbacks

A few months ago, Amex® Platinum, introduced the Red Tier. In the past, rewards programs were still effective in two or three areas: no annual fee, no limit on rewards points or points balance, multiple airline and hotel loyalty programs, and no redemption restrictions.

Existing users were not able to upgrade their rewards program to the Red Tier, as it’s offered exclusively to new customers. This offer comes with a variety of perks, such as 0% interest on new purchases for the first two years, a 25% bonus on Gold and Silver Points, 3x miles per dollar spent and discounts on travel perks, such as hotels, airfare and shopping. The Red Tier also offers an unlimited $150 cash reward, and there is no need to redeem points for actual travel.

More often than not, this kind of fantastic sign up bonuses are limited to a certain number of customers. American Express® Platinum, however, expands the zero point process to the rest of their customers.

Whether the Amex® Platinum will be an acquired loyalty card or a customer loyalty card for the future will soon become known.

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