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American Express announced its Delta SkyMiles credit cards will no longer levy foreign transaction fees as of May 1st, 2014.
Great news, right? It’s, a long awaited benefit that puts them on par with Chase and United which also have no foreign transaction fees on their co-branded cards. Delta’s cards will also have EMV chip functionality which you can request at any time which is helpful for travel to Europe.
But the change (and EMV chip functionality) doesn’t come without a price…
The annual fee on the middle level Platinum Delta SkyMiles Credit Card from American Express is quietly going up to $195 from $150 prior starting May 1st.
If you apply before May 1st your first year fee will be $150, then go up to $195 the following year.
The base Gold Delta SkyMiles Credit Card’s annual fee remains at $95 and also gets the improvement of no foreign transaction fees so there is some genuine enhancement there. If you spend $4,000 a year abroad while on vacation you’ll save over $100 a year with the removal of these fees.
But since both the Platinum and Gold Delta SkyMiles credit cards get the no foreign transaction fee benefit, the bar for justifying the higher annual fee of the Platinum level card has raised to $100 per year over the Gold level card.
First, there is a 10,000 mile bonus after you spend $25,000 on the Platinum SkyMiles card in any calendar year. The Gold version doesn’t offer the bonus. That’s worth at least $100, though you’re just breaking even at that point. There is an additional 10,000 mile bonus after you spend $50,000 on the card, so you’ll need to hit that threshold to get significant extra earned SkyMiles value over the Gold version of the card.
All SkyMiles are worth at least one cent each because you can use them to pay for any Delta ticket at that rate, even if award seats aren’t available, thanks to the ‘Pay with Points’ feature. Savvy travelers should find redemptions better than one cent per mile in value though, particularly for international tickets.
Second there is a Delta companion ticket offered each year only to Platinum and Reserve level Delta SkyMiles credit card holders. You can use it on flights within the lower 48 states where the very lowest fares are available and it’s easy to search for availability on Delta.com. But this is only valuable if you plan to travel with a companion each year. Our guess is it’s worth $200 – $300, but you might get better value than that depending on your ticket. It’s easy to forget about this benefit as it’s not actively promoted by Delta or American Express, and your certificates are lying in your online Delta.com profile in a not-conspicuous place.
Finally, if you are chasing Medallion elite status with Delta you earn 10,000 Medallion Qualifying Miles after $25,000 in spending, and another 10,000 after $50,000 in spending. It’s hard to put a value on that, but if you are short of an elite threshold and 10,000 or 20,000 extra Qualifying Miles will get you to the next level, then the extra $100 annual fee can be worth it.
So you need to be a really big spender, diligent enough to use the companion ticket every year, or value the next threshold of Medallion elite status to make the Platinum SkyMiles card’s higher fee worthwhile.
But for most travelers the basic Gold Delta SkyMiles credit card is looking like an easier choice and you might want to consider it rather than the Platinum SkyMiles card as the annual fee increases.
American Express still hasn’t announced a foreign transaction fee waiver on its $175 per year Premier Rewards Gold Card, but does offer it on the $95 a year Gold Delta SkyMiles credit card. The closest competitor to the Premier Rewards Gold Card is the Chase Sapphire Preferred Card and it has no foreign transaction fees.
It would be a great move by American Express to remove the 2.7% foreign transaction fee from the Premier Rewards Gold Card as it’s a faster earner for Delta miles than the Gold Delta SkyMiles credit card and often the Platinum Delta SkyMiles credit card thanks to 2x bonuses on gas and supermarket spend, and 3x on airfare purchases.
You can compare the earning power of cards that earn Delta SkyMiles here.
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