5 ways American Express can better compete with Chase

Last week, American Express introduced changes to the Amex Platinum Card, which will take effect on March 30. Among the new features of the card is a $200 annual Uber credit dished out in $15 monthly increments…accompanying a $100 annual fee increase.

Personally, I don’t mind the fee increase because I’ll definitely get use out of the Uber credits. However, a lot of people are talking about cancelling the card and switching over to the Chase Sapphire Reserve.

This is clearly the opposite of what Amex was aiming for, since they were actively trying to compete with the Sapphire Reserve card with these changes. It was well-intentioned but ultimately poorly executed. Here’s what I think Amex could have done (and still can do) to better compete with Chase:

1. Make the $200 annual airline fee credit more flexible

The problem with the Amex Platinum card, in relation to the Sapphire Reserve, was that it has the same annual fee but doesn’t quite measure up in terms of the annual travel credit. The Sapphire Reserve offers a $300 annual travel credit that can be applied to any purchase coded as travel.

Meanwhile, the Amex Platinum card simply offers a $200 airline fee credit. Not only is this less than the credit offered by Chase, but it only applies to airline incidental fees…from a single designated airline.

People have been getting around this by purchasing airline gift cards, but why does it have to be this way? After all, Sapphire Reserve cardholders don’t have to use tricks to get reasonable use out of their credits. Amex should have increased their credit to $300 and extended it to all travel purchase to better compete with Chase.

2. Drop the annual fee hike, keep the benefits

Amex really shot themselves in the foot with that $100 annual fee increase. Most consumers find it difficult to justify paying a $450 annual fee, let alone a $550 one. It was sensible for Amex to try and off-set this increase with added benefits like a $200 Uber credit.

However, their approach was all wrong. Limiting the credit to one rideshare app (with the worst reputation going for it) was a mstake. A lot of people deleted the Uber app over the immigration fiasco, while the constant onslaught of bad press is driving even more users away.

Another mistake was offering the $200 credit in monthly increments, which subsequently expire when not used in the same month. A lot of folks would likely have been able to justify the $100 fee increase if the $200 Uber credit rolled over. Instead, they’re making it difficult for a lot of frequent travelers to get use out of the $200 Uber credit.

For those who don’t even use Uber, it’s basically a fee hike for nothing. Now they’ve made it even more difficult for cardholders who were having trouble deciding whether keeping the Amex Platinum card was worth the $450 annual fee. Now those customers will have to justify a further $100 fee increase in exchange for a benefit they may not even use.

3. Improve the 5X airfare category bonus

The Amex Platinum 5X travel category bonus, while long overdue, is still not enough to compete with the 3X offered by the Sapphire Reserve. That’s because the 5X bonus is restricted to bookings made through American Express Travel. That’s not going to work for a lot of people who would rather book directly with their hotel program of choice or redeem points at a favorable rate. Which brings me to my next point…

4. Create a more competitive travel site

The American Express Travel website isn’t terrible, but their rates are also not as good as those on the Ultimate Rewards Travel Portal. Not only that, but redeeming Membership Rewards points for travel through the American Express Travel website does not work out at a favorable rate.

While Sapphire Reserve cardholders get a 50% bonus on points redeemed through the UR portal, Amex Platinum cardholders just get 1 cent per point. 

5. Allow Uber credits to roll over

A lot of people would have preferred if American Express had kept the annual fee at $450 rather than charge an extra $100 for a benefit they won’t use. What makes the $200 Uber benefit so difficult to use for some is the fact that it’s issued in $15 monthly increments.

The fact that they don’t roll over is another huge negative. If Amex wants to make cardholders slightly less angry, they should allow Uber credits to roll over every month.

Final thoughts

In conclusion, American Express needs to make their Platinum card benefits more flexible. Like Chase has done with their line of Ultimate Rewards-earning credit cards. Rather than limiting statement credits to specific airlines, let people choose where they want to spend their credits year-round. Instead of increasing the annual fee in exchange for a travel benefit restricted to a single rideshare company, give cardholders the flexibility to choose.

There are plenty of premium credit cards on the market. If American Express wants to stay competitive, they need to put a stop to these artificial benefits and focus on offering cardholders what they want. Which, in many cases, Chase is already giving them. Amex already had a great product in the Amex Platinum card. Rather than improve on that, they went off on a tangent and are now looking at losing valuable business to Chase.

Do you have any suggestions for how Amex can better compete with Chase in terms of premium credit card benefits?