American Express® Gold Card review: You’ll have to dine out a lot to break even

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In a Nutshell

The American Express® Gold Card’s cutting-edge dining rewards are overshadowed by its underwhelming welcome bonus, limited travel credits and pricey annual fee. You’ll have to dine out a lot to break even.

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Pros Cons
Great dining rewards rate Big annual fee
Solid transfer partners Underwhelming welcome bonus
Travel perks difficult to qualify for
Fee for transferring points to frequent flyer programs

 

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American Express® Gold Card

From cardholders in the last year

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4 things you need to know about the American Express® Gold Card

1. An underwhelming welcome

The American Express® Gold Card’s welcome bonus pales in comparison to those offered by many other premium credit cards.

We found several luxury cards with higher annual fees — and even basic travel rewards cards with lower annual fees — that feature welcome bonuses greater than the 35,000 Membership Rewards points you’ll earn from the American Express® Gold Card after spending $2,000 on eligible purchases in the first 3 months after opening the account.

That’s a relatively low spending requirement to earn the points, but the reward certainly isn’t one of the card’s strong points.

2. You can feast on dining rewards

What the American Express® Gold Card lacks in welcome bonus, it makes up for in dining rewards.

You’ll earn four points for every $1 you spend at U.S. restaurants. Do you prefer to cook at home? You can also score four points per $1 spent at U.S. supermarkets (on up to a limit of $25,000 in purchases per year, then one point). Other than flights, which can earn three points per $1, you’ll also earn one point per $1 on all other eligible purchases.

If you dine out on a regular basis, you can enroll in a program to earn a $10 statement credit each month (up to $120 per year) when you order from Grubhub and Seamless, or go out to participating U.S. restaurants like Ruth’s Chris Steak House and The Cheesecake Factory.

3. Travel perks come with strings attached

The American Express® Gold Card features a $100 airline statement credit, but you’re limited in how you can use it.

You can’t use the credit to pay for airfare, and it won’t cover all of your incidental fees — while checked bags and in-flight meals qualify, upgrading to a better seat won’t count. You have to choose one qualifying airline where you’ll use the credit. So this fee credit may only add value for a limited range of travelers.

There’s another string attached to your travel options: You’ll earn a total of three points for every $1 you spend on airfare purchases — but only on those flights booked directly through the airline or American Express Travel. So if you were to book your flight with a website like Expedia or Orbitz, you wouldn’t get that rewards rate.

By contrast, the Chase Sapphire Reserve® features a more flexible $300 travel credit that can be used to pay for all sorts of travel purchases, including flights, and you’ll also receive three points for every $1 you spend on airfare regardless of where you purchase your ticket.

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Chase Sapphire Reserve®

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Eligible American Express® Gold Card cardholders may be able to get a $100 hotel credit on stays of at least two nights at Hotel Collection properties booked with American Express Travel or other participating providers.

4. The annual fee might make you think twice

The American Express® Gold Card charges a $250 annual fee.

Depending on which features are most important to you, you could argue that the card doesn’t offer much more value than some basic travel rewards cards that charge annual fees of less than half the cost.

For example, the Bank of America® Premium Rewards® credit card offers a larger sign-up bonus. You can earn 50,000 bonus points after spending $3,000 on purchases in the first 90 days of account opening. And you’ll get $200 in combined airline incidental and airport expedited screening statement credits for a much less costly $95 annual fee.

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Understanding your points and redemption options

American Express Membership Rewards points can be used to book travel, buy gift cards or shop online.

When you redeem your points through the American Express travel portal to pay for things like flights and hotels, they’re worth 1 cent a piece, according to Credit Karma’s point valuations.

You might be able to get a better value if you transfer them to airline or hotel partners, but keep in mind that American Express charges a small fee that equates to about $1 for every 1,667 points you transfer. In other words, it would cost you roughly $30 to transfer 50,000 points.

Who is this card is good for?

The value of this card all comes down to how often you dine out.

We don’t think the American Express® Gold Card is worth the $250 annual fee for most people, but some will get value out of the dining rewards.

Sure, the 35,000-point welcome bonus may make up for the annual fee in the first year, but what happens after that? It all depends on how you will use the card, but we don’t want to encourage you to apply for a credit card that doesn’t offer enough in rewards to cover the annual fee.

When choosing the right credit card for you, it’s important to look for rewards that offer value year after year. But with the American Express® Gold Card, some of the statement credits and travel rewards are so difficult to qualify for that you might not be able to take advantage of them.

In our view, then, it all comes down to the dining rewards. You’d need to spend nearly $521 each month at U.S. restaurants and U.S. supermarkets to break even on the card’s $250 annual fee. If you factor in the monthly $10 dining credit, you’d still need to spend more than $270 per month to break even.

Not sure this card is right for you? Consider these alternatives

If you’re not sold on the American Express® Gold Card, you might want to take a look at one of these other credit cards.