kevrosmith
Established Member
- Joined
- Feb 13, 2009
- Posts
- 2,370
I recently did a comparison/analysis to see if I would get more value from my rewards by paying the higher $295 annual fee for the Platinum card vs. the $100 annual fee for the Classic card.
For this analysis, I used the following assumptions:
For me, I always transfer points to $100 Myer gifts vouchers, so this is how I determine "value": how many cards can I get in a year to offset the annual fee? $100 gift vouchers are currently 16,950 points.
On the Classic card you get 1 point per $1 on base card (Mastercard or Visa) and 2 points per $1 on Amex. Platinum card you get same base rate but 3 points per $1 on Amex.
I did an analysis of my current point earning ratio Mastercard vs. Amex, which is 20% on MC rates. Under the Platinum, this percent would drop to 15%. I used these percentage to determine the ratio of points earnt under the base rate vs. Amex rate.
From this, I compared different Annual spend rates and worked out what total points I would've earned under each card system. I then calculated how many $100 gift vouchers I would've been able to redeem. Finally, by subtracting the annual fee from the total value of gift vouchers redeemed, I can compare the overall value of the card.
For example
Annual Spend of $30,000:
54,000 pts under Classic (20% of $30K * 1 + 80% of $30K * 2) which is 3.19 Myer gift vouchers (54,000 / 16,950): $319 - $100 annual fee = $219
81,000 pts under Platinum (15% of $30K * 1 + 85% of $30K * 3) which is 4.78 Myer gift vouchers (81,000 / 16950): $478 - $295 annual fee = $183
Therefore Classic is better in this situation.
However:
Annual Spend of $48,000
86,400 pts under Classic which is 5.1 Myer gift vouchers: $510 - $100 = $410
129,600 pts under Platinum which is 7.65 Myer gift vouchers: $765 - $295 = $470
Therefore Platinum is better in this situation.
Summary of Findings:
The break-even point is an Annual Spend of approximately $36,600. If you spend less than this, go with Classic, otherwise the Platinum does give you better rewards on the points. Plus, there are many more benefits that Platinum offers which are not available under Classic.
Hope this helps others who are wondering which way to go. I'm aware that many of you look for value to convert to Airline points, but thought this might be useful anyway.
Sorry for the poor formatting: I didn't know how to be able to put a Table in my post.
PM me if anyone wants any more details on my analysis or the spreadsheet.
Regards
Kevin
For this analysis, I used the following assumptions:
For me, I always transfer points to $100 Myer gifts vouchers, so this is how I determine "value": how many cards can I get in a year to offset the annual fee? $100 gift vouchers are currently 16,950 points.
On the Classic card you get 1 point per $1 on base card (Mastercard or Visa) and 2 points per $1 on Amex. Platinum card you get same base rate but 3 points per $1 on Amex.
I did an analysis of my current point earning ratio Mastercard vs. Amex, which is 20% on MC rates. Under the Platinum, this percent would drop to 15%. I used these percentage to determine the ratio of points earnt under the base rate vs. Amex rate.
From this, I compared different Annual spend rates and worked out what total points I would've earned under each card system. I then calculated how many $100 gift vouchers I would've been able to redeem. Finally, by subtracting the annual fee from the total value of gift vouchers redeemed, I can compare the overall value of the card.
For example
Annual Spend of $30,000:
54,000 pts under Classic (20% of $30K * 1 + 80% of $30K * 2) which is 3.19 Myer gift vouchers (54,000 / 16,950): $319 - $100 annual fee = $219
81,000 pts under Platinum (15% of $30K * 1 + 85% of $30K * 3) which is 4.78 Myer gift vouchers (81,000 / 16950): $478 - $295 annual fee = $183
Therefore Classic is better in this situation.
However:
Annual Spend of $48,000
86,400 pts under Classic which is 5.1 Myer gift vouchers: $510 - $100 = $410
129,600 pts under Platinum which is 7.65 Myer gift vouchers: $765 - $295 = $470
Therefore Platinum is better in this situation.
Summary of Findings:
The break-even point is an Annual Spend of approximately $36,600. If you spend less than this, go with Classic, otherwise the Platinum does give you better rewards on the points. Plus, there are many more benefits that Platinum offers which are not available under Classic.
Hope this helps others who are wondering which way to go. I'm aware that many of you look for value to convert to Airline points, but thought this might be useful anyway.
Sorry for the poor formatting: I didn't know how to be able to put a Table in my post.
PM me if anyone wants any more details on my analysis or the spreadsheet.
Regards
Kevin
