Is the Amex Black Card Better than I Thought?

Earlier this week I argued that the American Express Black Card was really just a very expensive Platinum card. The Platinum card gives you most of the perks of Centurion for much lower annual fee versus a $7500 initiation fee and $2500 annual fee for the Black Amex.

The key incremental benefits of the Centurion card are:

  • Delta Platinum status
  • IHG Rewards Club Platinum status
  • Higher tier rental car status
  • Additional benefit when making Fine Hotels and Resorts hotel booking

That has some value, I don’t think it’s worth twice the fee of the Platinum card let along 5 times as much (and over 20 times as much the first year).

The Platinum and Centurion cards both get you:

  • Lounge access. Both Platinum and Centurion members get access to Delta lounges (when flying Delta same day, but no free guests); Centurion lounge access (Centurion members get better champagne than Platinum members and reserved tables); Priority Pass Select.

  • Starwood status. Both Platinum and Centurion members receive Gold status.

  • Hilton status. Platinum members receive Gold status, Centurion members Diamond, but there’s not much of a material difference in published benefits between the two status levels.

  • Fine Hotels & Resorts bookings. Luxury hotel reservations with throw-ins like breakfast, upgrades, and late checkout. Centurion members generally get an extra throw-in benefit.

The Points Guy explains why the card made sense for him. It comes down to:

  • He’ll write off the fee as a business expense, so it’s a lower cost to him than to most
  • It gets him unique content for his blog
  • He thinks the card will get better in the future than it is today (and American Express folks have hinted at this to me as well).

Now, this isn’t a game changer but it’s also great that he’s bringing information to the table. I wrote that the Delta Platinum status of American Express Centurion members wouldn’t earn bonus miles for flying Delta like most Platinums do. That’s what American Express told their Centurion cardholders in their October 2014 card statements. Brian shares that he is, in fact, receiving the Platinum bonus for his flights.

The card makes sense for Brian, The Points Guy, with a lower effective cost to him than to most and a blog on which to write about the product.

While my post was prompted by his sharing that he had gotten the product, it wasn’t meant as a criticism. It works for him. My point is that it’s not a card that will pay off relative to its costs for most people who are in a position to get the product.

My advice is to get the Platinum card and save the $9500 in year one and $2000 each subsequent year. Take the savings and, if you’d like, invest that in paid domestic first class rather than hoping for upgrades on Delta. And if IHG Rewards Club Platinum status matters, get the $49 co-brand card from Chase that comes with that status.

Commenters who have the card offered explanation that:

  1. they aren’t paying the retail fee, either
  2. or that they would buy Hertz Platinum for $1500 anyway and a Platinum card for $450 so they might as well get both $2500 from American Express.

If their business is so valuable to American Express that they can get the card for free, or grandfathered at older rates (something I had been under the impression American Express had moved most Centurion cardholders off of), then it’s a different value calculation — one that works for The Points Guy, and works for their unique situation, but isn’t really relevant to the question of whether the card’s benefits over and above what’s offered by Platinum are worth the extra fees.

While I am open to the possibility that American Express’ notice to cardmembers about the end of their elite bonuses for flights was wrong, that doesn’t much change my conclusion: the Centurion card is a very expensive version of Platinum, and you need to ask yourself whether Delta Platinum, IHG Rewards Club Platinum, Hertz Platinum, and Avis Presidents Club are worth $2050 in incremental annual fees, let alone a $7500 initiation fee.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

More articles by Gary Leff »

Comments

  1. @Jamil – i mentioned better champagne in the original post. Although honestly I can’t get overly excited about Veuve. Certainly not a compelling reason to get the card!

  2. A tax write-off is not a tax rebate. Brian is paying the same annual fees as everyone else but he doesn’t mind because it is lowering his overall tax liability. But he could just as easily lower his overall tax liability by going to a Lakers game and meeting a potential client and deducting that as a business expense. Thus there is still an opportunity cost for Brian in getting the Centurion card. At that point it becomes a question of utility.

    Let’s say for example Brian would pay 40% of Profit X in taxes, instead he chooses to pay 70% of Profit X in Centurion fees or 70% of Profit X in Lakers tickets. The Centurion card seems to yield a higher utility value to Brian making the Centurion card a good investment for him.

  3. @Shubhayan of course, but the writeoff means his net cost is lower. No reason to suspect one is at a margin where there’s nothing left to write off (indeed, you can write off more than your total business income in a given year) so the tradeoff you describe wouldn’t exist.

  4. People like reading about it. TPG said in the comment section that it was the most popular story of the week.

  5. @Gary I am more with @Shubhayan. You have to look apple to apples. If the advantage is you can “write it off” then the platinum card is that much cheaper to you as well.

  6. UGH. I read this blog because it’s not TPG. And now two stories in one week about TPG. Maybe I’ll head over to OMAAT and read ANOTHER review of Etihad or Emirates First. Or things to do in Beijing.

  7. “Honey WHAT are YOU doing? Why are you STANDING in the MIDDLE of the FREEWAY?!”

    “Blog content, babe. Blog content.”

  8. So basically, it only makes financial sense to get the Centurion card if you are a credit card blogger.
    Cool story bro.

    I was more put-off that the conclusion of these posts was more defensive of the card than he would have of others. He can say it wasn’t about the ego/image….but it kind of read that way…

    If something ended with a “this is a poor value proposition, I recommend against getting this card” then I’d be a lot more receptive.

    It may also be the fact that he has a full office with a bunch of interns/writers now that just seems a little absurd….I’d rather have quality content over quantity, but I know that doesn’t pay the bills…

  9. Not that it’s worth $2K, but reserved seating in over-crowded Centurion Lounges is also of some value.

    There are a few other things worth something to some people. For example, infrequent “WOW” offers for Centurion. This has included no strings attached nights and really nice hotels (I used one at the London NYC). They also give out really nice gifts occasionally at the Centurion Lounges for Centurion holders only (I use the Master and Dynamic headphones all the time).

    Again, I’ll kill my membership (which I’ve had for 15+ years) if they don’t revive some of the benefits that allowed me to rationalize many moons ago.

  10. @Daniel: Not as bad as the taxpayers subsidizing his $32,000 trip in Etihad’s Residence. I’d love to see the results of his inevitable IRS audit.

    @Brandon: You forgot posts about how wifi availability is the single most important feature of any business class.

  11. I don’t think people understand what “writing it off” actually means. They probably think he’s getting the card for free, and that’s not how it works. A business expense only reduces his total tax liability, so he will likely still pay around $7,000 out of the $10,000 fee depending on his tax situation.

  12. TPG came up with those lame answers in case he ever gets audited. Fact is: he’s a showy guy (see ridiculous champagne photos) and wants the bling factor…. Not something an IRS agent will take as a legitimate business expense on a Schedule C or flow-through return.

  13. Ken nailed it – it’s a small reduction in tax liability not at a 1:1 ratio. It’s never going to be free but reduced somewhat based on his net income after accumulated expenses. In fact if he tries hard enough to NOT show a profit there is no write-off available as you have to profit to write something off. BB is a bit off as it’s not up to the interpretation of an IRS field agent to decide if this expense is a write-off as the IRS clearly allows the deduction of not only business credit card annual fees but (gasp) interest paid on those cards. But we all know that no interest will be paid.

    I don’t have one and would more than likely never consider one unless they really up the perks. I do see them doing that in the future after AMEX is badly wounded by the loss of Costco, Jet Blue and now SPG cards in the near future. A ton of new Centurion card members would help a lot if those members actually USED the card for $350K a year in spend. They need to do something big and do it soon.

  14. For the Delta status, I got the same message, once you fly 4 paid segments, the “complimentary” Delta Platinum status becomes a full Platinum. He likely got the status midyear, and had already completed the 4 segments.

  15. I have the Centurion card, when I received it the yearly fee was lower and there was no introductory fee. The centurion card in the past was wonderful in the past couple of years it has lost its benefits, the most recent frustrating one for me was the loss of the star alliance gold status. I do appreciate the Avis status I have, there have been a few , not many times I needed to pull the status card to have a car when none were available. However that is not work the cost of the yearly fee, I keep hoping it will get better so I hang on to the card, I called Amex at one point and said, do you really think I care about a $200.00 airline credit if I am paying $2500.00 for a yearly membership fee. Since you have lost so many benefits why don’t you give me double points on all purchases, turns out I do not use the card very much now. Most of my travel expenses are now on my gold rewards card. Yes there are some cards that provide more points for certain travel, the reason I prefer my Amex card for expenses, no one gives better details on travel expenses than Amex. I think that could be en entire topic for someone to write about and compare statements. In the end, I don’t know if I will give up my centurion card soon, I do know I find it frustrating the Platinum Business card and Centurion Business card has better benefits than my centurion card such as fee gogo internet access. I guess we will see when my card is up for renewal if I keep it or not. Hopefully Amex does something special for its members.

  16. Nope Gary, you are right this Amex is very poor value. I even think TPG admitted that he would not use the card for every day spend..

  17. Centurion is not for frugal people looking at its benefits on paper.

    It’s for people that can afford the initiation and annual fees easily and want the status symbol of a credit card product that is ‘rare.’

    Cars depreciate, fancy houses require paying lots of property taxes, expensive trips vaporize money.

    Some people like vaporizing money on a little black piece of plastic to flash when they go out.

  18. Gary – come on, you’re better than this. You missed one of the best new benefits of the past few years – an unlimited Gogo pass. Even with limited use, it’s worth at least $500/year. We share ours across the family (shh, dont tell).

  19. @Arcanum

    You are right. I would to see how TPG does when he is inevitably audited. That Etihad Residence ticket will draw a lot of attention as it is 5 figure airline ticket. The days of deducting your Hummer, etc. are over.

Leave a Reply

Your email address will not be published. Required fields are marked *