Are Luxury Credit Cards Still Worth It for Travelers?

September 22, 2022

 

For many people, luxury credit cards are an important status symbol, as well as an essential companion for their lifestyle. Those types of cards offer their customers large credit limits, as well as several rewards, such as cashback and travel benefits.

In addition to that, most of those types of cards have a 0% interest periods, which can range from 3 months to 2 years, where the bank customer does not pay any interest on their purchases.

Despite this positive sentiment from many individuals, there are also some financial experts, as well as ordinary consumers, who are rather skeptical about using those types of credit cards. They point to large commissions and high-interest rates consumers have to pay the bank for the privilege of using those cards.

So, the obvious question at this point is: Are those luxury cards still worth it for frequent travelers? To answer this question, let us take a look at some of the most popular luxury credit cards in the United States.

Amex Platinum Card

We begin our analysis by looking at the Platinum Card from American Express. This card offers 100,000 membership points, once the customer spends at least $6,000 during the first 6 months of the card membership.

So how can one use those membership points? Well, here is where the benefits for travelers come into play. Firstly, as the American Express website suggests, the client can earn up to $200 in airline fee credit. This means that an individual can get up to a $200 discount when purchasing airline tickets.

This is not the only perk the Amex consumers can benefit from. Clients can also get a $200 hotel credit as well as a $155 Walmart+ credit. In addition, customers can also get $200 Uber cash, which they can use for dining and taxi expenses.

With this card, people can earn 5x membership points on travel tickets and prepaid hotel expenses.

Finally, American Express offers Platinum card owners access to more than 1,400 airport lounges in more than 140 countries.

Costs vs Benefits

As we can see from the above discussion, the Amex Platinum Card does have some important perks, which might appeal to frequent travelers and also help them to save some money in the process as well.

However, how much does an individual has to pay in fees and interest for those privileges? Well, as the Amex company website suggests, the annual fee for Platinum Card stands at $695.

It is also worth keeping in mind that once the 6-month period expires, the client also has to pay an interest on the card balance. The actual interest rate ranges from 18% to 26%, depending on the credit score of the client.

It goes without saying that at this rate, the interest expenses for potential clients can be considerable. However, it is worth noting that people can avoid interest expenses if they pay their balance in full by the end of the statement period.

Here it is helpful to point out, that if we sum up the value of different benefits the card offers to travelers, it will add up to $755. So if the individual makes use of all of the benefits and pays the balance in full by the end of the statement period, then the Amex Platinum card can be something frequent travelers might benefit from.

Chase Sapphire Reserve Card

The Chase Sapphire Reserve card is another luxury credit card that might interest some travelers. Once the new cardholder spends $4,000 on purchases during the first 3 months, he or she will get 60,000 bonus points. As the Morgan Chase credit cards website suggests, this is the equivalent of $900 worth of rewards towards travel, including a $300 travel credit.

In addition to that, consumers can earn 5x bonus points on travel tickets and 10x more points on hotels and car rentals after the first $300 are spent on those respective categories. Here it is also worth mentioning that cardholders can earn 3x points on dining at restaurants, as well as on takeout.

So, the types of benefits that Chase Sapphire Reserve card offers is very similar to that of the Amex Platinum card. Although, one can argue that in actual dollar terms the Chase Sapphire Reserve card can offer more benefits to its customers, than its Amex competitor.

Comparing Expenses

As we can see from the above discussion, the Chase Sapphire Reserve card also has a number of benefits, which might appeal to frequent travelers. However, how do the fees associated with this card compares to that of the Amex Platinum card?

Well, as the official Morgan Chase credit cards website shows, the annual fee for a Chase Sapphire Reserve card currently stands at $550. The interest rate itself ranges from 19% to 26%, depending on the credit score of the potential client.

As we can see here, the annual fees for this card are notably lower than that of the Amex Platinum card, yet the actual interest rate might be slightly higher than its competitor. For those customers who pay their balance in full by the end of the statement period, the annual fees are a more important consideration when making decisions about credit cards.

Still, as we can see here, the expenses associated with the Chase Sapphire Reserve card can be considerable. On the other hand, consumers can more than make up for those expenses if they make use of the travel benefits, mentioned above.

Conclusion

  • Luxury Credit cards, such as Amex Platinum Card and Chase Reserve card offer their customers several important benefits on travel tickets, hotels, car rentals, and other perks.
  • Despite those benefits, the annual fees for those cards are considerably higher than most other credit cards, ranging from $550 to $695.
  • Customers can negate those expenses if they make use of the travel benefits offered by those cards, as well as by paying the card balance in full by the end of the statement period.

 

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Thomas P
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.

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