Are Premium Travel Credit Cards Still Worth It?

Key Takeaways   

• Plenty of benefits under the new refresh for many cards, but substantially higher fees, too. 

• Don’t increase your normal travel and dining habits just to justify the higher fees. 

• Traditional cash back cards may be better if you value simplicity and don’t want to track deals and benefits constantly.  

With the Holidays and peak travel season upon us, many of you may be wondering if it makes sense to get a premium travel credit card. I’m sure you’ve received many offers lately. Chase Sapphire Reserve and Amex Platinum – two of the most popular premium cards- recently did a refresh. These cards earn flexible points that can be transferred to numerous travel partners, including airlines and hotels, and redeemed for travel through a respective issuer's travel portal. They can even be used as cash back for statement credits. The card issuers have added more benefits, more credits, and more incentives, plus they often include travel protection. But they also jacked up their annual fees, becoming more and more like “coupon books.”  

While the benefits and credits can add up to more dollar value than the steep annual fee ($795 to $895 per year), I want to caution you against using these expensive cards if your lifestyle doesn’t align with them. For instance, if you’re not already traveling a great deal (personal, not business), dining out frequently, and not already using convenience services like Grubhub or Uber Eats, then going out and spending money on a premium card just to justify the higher fee is not worth it.  

Also, premium cards are not great for people who value simplicity and don’t want to spend time keeping track of various credits, coupons, and annual card benefits. It can be a lot of work to save money. However, the premium cards make sense if you travel frequently and stay at five-star hotels and resorts like Ritz Carlton, provided you book through your card’s fine resort program. Again, you may be getting a $300 hotel credit, which sounds great. But those credits only apply at hotels that start at $600 per night. The math usually doesn’t work out unless you’re already a frequent guest at these upscale hotels and resorts. 

Another drawback to these premium travel cards is that they’re not great for actual cash back. They're only good for coupon benefits and statement credits. With the Amex Platinum card, for instance, you may get 5% cash back if you book flights and hotels through the Amex travel portal. But for most other purchases in your daily life, you only get 1% cash back. Again, if you’re not traveling a great deal for personal use, you’re better off with a standard 2% “cash back on everything card” like the Wells Fargo Autograph.

Again, I want to focus only on personal travel for this post, not business travel. 

Important new changes:  

Chase: The Chase Sapphire Reserve’s previous credits will remain intact including a $300 annual general travel credit for any hotels or flights purchased on the card, access to Priority Pass and Chase Sapphire airport lounges, up to $25 a month in DoorDash credits (two $10 off promos and a $5 credit), annual dashpass membership, a $10 a month Lyft credit, $120 towards TSA precheck every four years. In addition, they have piled on hundreds of dollars in new benefits. 

For instance:  

• Up to $500 in credit for The Edit (Chase’s high-end hotel portal). This comes in the form of two $250 credits a year, one good in January-June and one in July-December.  

• Up to $300 in credit at restaurants in the Sapphire Reserve Exclusive Tables program. This, too, comes as two separate credits — $150 in each half of the year.  

• Up to $300 in statement credit for StubHub, in the form of two $150 credits per year.  

• Up to $250 toward Apple TV+ and Apple Music subscriptions.  

• Up to $120 in credit toward a Peloton membership, available at $10 a month, plus you earn 10 points per dollar on eligible Peloton purchases. 

• Complimentary IHG One Rewards Platinum Elite status through Dec. 31, 2027. 

On the downside, these extra credits come at the cost of a $245 increase to the card's annual fee, bringing the new fee to a whopping $795 a year. Chase also reduced cash back earning rates for some travel purchases. Purchases for cruises, travel agencies, and others have been dropped from the ”travel” cash back category, now earning 1 point per dollar, down from 3 points per dollar previously.  

Amex: The Amex Platinum also went through another substantial refresh, adding new statement credits and increasing some of its previous ones. This came at the cost of an increase in annual fee from $695 a year to $895. Here are the benefit changes:  

New Credits: 

• Up to $75 quarterly Lululemon at U.S. stores (excluding outlets) and online. 

• Up to $100 quarterly for U.S. Resy restaurants. 

• Up to $120 for Uber One membership (subject to auto-renewal). 

• Up to $200 annual Oura Ring (hardware only; not for memberships). 

Previous credits that will see an increase: 

• Hotel Credit: From $200/yr to $300 every six months. 

• Streaming credit: From $20/month to $25/month. 

• Clear Plus Credit: From $199/yr to $209/yr. 

Some of the previous benefits remain unchanged and intact. These credits include a $200 airline incidental credit (for airline incidental purchases such as checked bags only. Not for flights itself), a $300 Equinox gym membership credit, $120 every four years towards TSA precheck, a $50 credit every six months towards Saks, $15 a month in Uber Cash, a Walmart+ subscription and access to Priority Pass, Amex Centurion and Delta Skyclub airport lounges.  

Chase Sapphire Reserve vs Amex Platinum: How do they compare? 

Now, how do these revamped cards stack up against each other? As expected, both cards offer lots of new benefits , but there’s now more friction to use the benefits properly. At face value, the Amex Platinum comes out ahead by offering more annual credits -- a total of $2,784 versus Chase Sapphire Reserve’s $2,190 credits or a net credit amount after annual fees of $1,889 (Amex) versus $1,395 (Chase). However, the Sapphire Reserve’s credits are easier to take advantage of, whereas the Amex Platinum adds in a lot of Niche credits like the Equinox credit and puts more restrictions on use. For example, the Sapphire Reserve $300 general travel credit can count towards any hotel or flights purchased on the card, whereas the Amex Platinum hotel credit can only be used on hotels through Amex’s luxury hotel collection, which predominantly includes only high-end hotels such as Ritz Carlton. The Amex Platinum also doesn't have a direct airline purchase credit and breaks its dining credits into quarterly periods compared to the Sapphire Reserve credits, which are semi-annual. (Pro tip: Historically, Amex Platinum’s $200 Airline Incidental credit can be triggered by purchasing flight credits through the United Travel Bank, thus allowing you to indirectly be able to use the credit towards United airline flights.)  

You should also consider which airline (and airport) you primarily travel with, as these are primarily travel cards. Chase’s main transfer partner is United, whereas Amex Platinum’s main transfer partner is Delta. (Transferring your credit card points to a partner’s miles, such as United Miles, before redemption is a great way to get the most redemption value out of your points. Pointsyeah.com is a useful tool for searching for flights using points and showing what the best transfer partner is.) You should also check the lounge access at the main airport you use, since one card may have better lounge access than the other.  

In summary, Amex Platinum might be ideal for detail-oriented people who can keep track of the many card credits and who already stay at high-end hotels. The Chase Sapphire Reserve can be great for a heavy traveler who already spends money on many of the above credits and who doesn't want to jump through as many hoops to use their benefits.   

For those of you who are simply interested in airport lounge access but who don’t want the hassle of keeping track of various credits, consider the Capital One Venture X as an alternative. The Capital One Venture X is similar to what the Amex Platinum and Chase Sapphire used to be before. It's a travel card that gives you the airport lounge pass and a single $300 travel credit for hotel or airfare. It also provides 10,000 points (worth $100) annually as a card renewal bonus, which, when combined with the travel credit, covers the card’s $395 annual fee. The card also earns two 2 points per dollar spent on all categories, making it an easy catch-all card for all of your spending.  

 Premium travel cards are trending a lot online and on social media. When used correctly, they can save you a great deal of money if you travel frequently and are willing to invest the time and effort to maximize your rewards. But if frequent travel and related activities aren't what you're already spending on regularly, then you're just tricking yourself into increasing your lifestyle spending to justify the high annual fees of these cards.  

Conclusion 

If you or someone close to you has questions about the terms and conditions of your current premium travel credit cards, or if you’re about to go through a lifestyle change in which you’ll be traveling a lot more than you used to, reach out any time. I’m happy to help.

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Devin Starr, CFP® Associate Wealth Advisor at Novi Wealth 

DISCLAIMER: Novi receives no compensation or promotional consideration for products and services mentioned in this post.