American Express Gold Card Review: $125 Annual Fee vs Perks

American Express® Gold Card Earn 10K Membership Rewards(R) points, redeemable for select gift cards valued at $100, when you spend $1,000 in your first 3 months of Card membership Exclusive access to Gold Card Events - select concerts, shows, major sporting events, and more. Purchase Protection covers loss, theft, and damage of eligible items within 90 days of purchase Redeem Membership Rewards(R) points for an exclusive array of travel, shopping, dining and entertainment rewards. Get approved in 60-seconds. Intro APR for Purchases Intro APR for Balance Transfer APR as low as Annual Fee - - N/A $125

American Express has long been known for its superior service and card perks. But many consumers wonder if all the hype is worth the annual fees that come with the cards. The American Express Gold Card is one of those cards that provide adults with the prestige, benefits and an annual fee.

The Annual Fee

The American Express Gold Card has an annual fee of $125 per year. American Express recognizes that this is a large investment for many consumers, so they waive the fee for the first year of card membership. This offers a great opportunity to test out the card to determine if you will take advantage of enough benefits to make the annual fee worth the investment.

However, with these types of offers, many cardholders will forget about the annual fee during the first year. In doing so, they fail to fully evaluate how the card benefits them and their lifestyle. Perhaps the best way to ensure that you fully evaluate the investment is to schedule a reminder for yourself through your phone or email. Set the reminder to appear at the 10 month mark of card membership. By this point, you should have a good handle on how frequently you take advantage of the benefits.

When evaluating the card, take note of which benefits you have used and how frequently they were used. Doing a little bit of research will help you assign dollar values to the benefits you have used. If you find you have used less than $125 worth of benefits during the year, then this might not be the best card for your wallet.

The Benefits

While this American Express card will cost you some money, it is for a good reason. It comes with quite a few benefits that, if you use frequently, is likely to save you money in the long run. These benefits include: merchandise and travel rewards, hotel status that provides dining and hotel credits, car rental insurance, roadside assistance, other travel protections, access to Gold Card Events, purchase protections and $0 fraud liability.

Here is a breakdown of these benefits along with some estimated dollar values of these services to help you determine if they will cover the annual fee:

Rewards

The American Express Gold Card provides cardholders immediate enrollment in a rewards program. And cardholders earn an automatic 10,000 Membership Rewards® points when they spend $500 $1,000 (updated 9/20/2011) within the first three months of Card membership. This number of points is enough to redeem for gift cards valued at $100.

On an ongoing basis, members will continue to earn 1 point for every dollar they spend with their card. Point accrual increases to 3 points per dollar when shopping select online retailers at the Bonus Points Mall, and up to 10 points per dollar when cardholders shop from over 300 brands at the Membership Rewards website.

Points are redeemable for a number of rewards including gift cards, merchandise, airfare and other travel needs. There are no blackout dates or travel restrictions, making it convenient for cardholders who travel often. American Express will also allow you to transfer your Gold Card rewards points to more than 20 frequent flyer and frequent guest programs, so you no longer have to split your rewards between your credit card and any existing frequent traveler programs.

If you charge $1,000 to your card each month, then you will earn $120 worth of gift cards annually with this rewards program. As you can imagine, if cardholders are responsible with their card usage and pay off their balance at the end of each month, this rewards program holds a great value. Of course, if cardholders start making extra purchases just to get additional points and end up paying interest on purchases, the rewards aren’t necessary worth the cost.

Travel

Gold Card members are part of the Gold Card Hotel Program, which offers a $75 dining credit when cardholders stay for two nights or more at hundreds of locations through Sheraton, Westin, W and Le Meridien hotels and resorts; please note, hotel stays must be booked through goldcarddestinations.com to be eligible for the dining credit. These are higher end hotels, so the dining credit is only worth the reward if cardholders typically stay in these locations.

To ensure travel experiences aren’t ruined by mishaps, American Express equips its Gold Card members with protections including car rental insurance, baggage insurance, travel accident insurance, roadside assistance and travel assistance. These benefits are free for cardholders and help ensure they are easily able to obtain the help they need no matter where they are traveling. These services when purchased on their own can be expensive. Car rental companies typically charge a daily rate for insurance; this rate typically runs from $10 to $30, so a week of car rental insurance can put you out $70 to $210. Membership in a roadside assistance program can run you $50 to $150.

Events

Cardholders who like to be in on all the hot events will benefit from the Gold Card. Gold Card members receive access to Gold Card Events ®, a benefit that includes early tickets, special offers and preferred seating for concerts, theaters, sporting events and other hot entertainment.

Consumers also are able to receive the Entertainment Access weekly e-newsletter and gain access to the accompanying website that provides information about upcoming shows and events. This allows cardholders to plan ahead so their group of friends can enjoy all of the hottest shows coming to town.

Of course, there are times that life interrupts our availability to get to events. American Express helps cardholders through its Event Ticket Protection Plan, which provides reimbursement for up to $2,000 per covered incident so you don’t have to be out hundreds of dollars when you miss out on the show. Please note that this particular benefit is not available to New York residents.

Customer Service

Some credit card companies are notorious for their difficult customer service. Thankfully, American Express is known for their friendly and competent customer service representatives. Cardholders are able to access customer service around the clock via phone or e-mail.

American Express cardholders also are covered in instances of fraud. With their $0 fraud liability program, cardholders do not have to pay a single cent for unauthorized charges. Federal law mandates that credit card companies may require their cardholders to pay the first $50 of fraud, so this card benefit saves cardholders up to $50.

The card also comes with purchase protection programs that will assist cardholders when they purchase a defective product or the product is stolen or accidentally damaged. These protections cover up to $1,000 per instance. There is also an extended warranty program; when you purchase an extended warranty in the store, it typically runs about $50 but the one with the card is free.

So, is it worth the fee?

As you can see, if cardholders take advantage of the benefits of their American Express Gold Card, they can easily save $400 or more per year. Whether or not the annual fee is worth the investment for you and your lifestyle ultimately depends on your wants and needs. Keep careful track of every time you utilize card benefits and you will be able to see if the card pays off by the end of the first year (just remember that the bonus rewards points is a one-time benefit, so don’t add the 10,000 bonus points into your savings!).

Write to Meghan Clark at meghan@creditdonkey.com

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Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

Disclaimer: This content was first published on July 30, 2011. This content may have been updated on October 22, 2011. Information including APR, terms and benefits may vary, be out of date, or not applicable to you. Information is provided without warranty. Please check American Express website for updated information.