Welcome to the latest installment of our Best Credit Cards in America series. This time we examined the top high end reward cards this month. What is a “high end,” or luxury rewards card? These are products that deliver more than just cash back, points, or miles and some basic benefits. These cards represent the bank’s best efforts to woo, coddle and otherwise spoil their best customers with every perk imaginable.
But who really needs these cards? Unlike luxury cars and jewelry, these products can make sense for ordinary credit card users, not just the super-rich. This is because the best high end cards can offer value that exceeds even the cost of their considerable annual fees.
First, we narrowed down the list of cards to a select group with annual fees above $200. Unfortunately, we have to exclude the American Express Centurion card as it is only available by invitation, let alone the fact that its annual fee is rumored to be several thousand dollars a year. Next, we looked at both the rewards offered for spending as well as additional perks. The idea was to weigh the value offered by each card against its annual fee.
Finally, we ignored interest rates. Like all reward cards, these products should be used primarily by those who pay off their balance in full every month to avoid interest. In fact, some of these products are charge cards that don’t even permit holders to carry a balance. Those who do tend to carry a balance may keep one of these products in their wallet for the benefits, but should make any charge that they cannot pay in full on a card with the lowest interest rate available.
Even frugal credit card users should pay close attention to the winners this month. Those who can take advantage of their exceptional benefits may just find the substantial price of admission to be money well spent.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
American Express’s vaunted Platinum card was destined to appear somewhere on this list, but even loyal cardmembers may be unaware that it is also offered in a version co-branded with the Morgan Stanley brokerage.
Why it won:
This special version offers all of the same benefits of the standard Platinum card, plus a few even more valuable features.
What this card offers: For each dollar spent, cardmembers earn one point in the American Express Membership Rewards program. Points are worth one cent each towards travel or as statement credits, but can also be transferred to the mileage programs of a dozen different carriers. The Morgan Stanley version also offers a $500 Anniversary Spend Award when cardmembers charge at least $100,000 each year.
Other features: Cardmembers gain access to the airport lounges of American, Delta, and US Airways as well as 600 other participating business lounges worldwide. This perk alone is worth hundreds of dollars to those who would have purchased a lounge membership. Cardholders also receive up to $200 annually in statement credits toward airline fees such as those for checked baggage, change fees, and in-flight food. In addition, card members also receive a credit of $100 toward an application to the US Customs and Border Patrol’s Global Entry program. This membership allows travelers to bypass lines when entering the United States. Cardmembers also receive access to a personal concierge and a slate of travel and shopping benefits too numerous to detail here.
The costs: The annual fee for this card $450, but unlike other versions of the American Express Platinum card, the Morgan Stanley edition offers a second card to an additional cardholder at no extra charge. The primary cardholder must maintain an eligible account with Morgan Stanley. This is a charge card and members are expected to pay their statement balance in full each month. Thankfully, there are no foreign transaction fees with this card.
Why it won:
It wouldn’t seem that a credit card could offer regular upgrades to first class, but that is exactly what this product does for many cardholders.
What this card offers: Cardholders receive 10,000 Medallion Qualifying Miles (MQMs) after their first purchases, and up to 30,000 more MQMs each year. These extremely valuable miles allow cardholders to ascend the ladder in Delta’s SkyMiles program and earn complimentary upgrades to first class on domestic flights. In addition, two SkyMiles are earned per dollar spent for purchases from Delta, and one mile on all other purchases.
Other features: Cardholders receive complimentary access to Delta’s Sky Club business lounges for themselves and up to two other guests. When checking in for flights, cardholders receive their first bag checked free for themselves and up to nine others traveling on the same itinerary. Finally, Delta also grants upgrade priority to Reserve cardholders above other fliers at the same level in the SkyMiles program.
The costs: The annual fee is $450, and unfortunately, there is a 2.7% foreign transaction fee on all charges processed outside the United States.
Why It Won:
Unlike the Delta Reserve card, this product does not offer the increased chance of being upgraded to a first class seat. Instead, it offers priority access on the ground and more miles per dollar spent.
What this card offers: The United MileagePlus Club card offers a United Club membership, which is the only major lounge program missing from the American Express Platinum card. Cardholders also earn 1.5 miles per dollar spent on all purchases, and two miles per dollar on all United purchases. This equates to 50% more reward miles than most other airline cards.
Other features: Cardholders receive access to priority check-in, security, boarding and baggage handling, as well as their first and second checked bag for free; essentially all of the benefits of a first class ticket, except the seat. Close-in booking fees are waived, and cardholders are also granted elite status in the programs of Hyatt hotels and Avis car rentals.
The costs: There is $395 annual fee for this card, and no foreign transaction fees.
[Credit Cards: Research and compare rewards credit cards at Credit.com]