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NEW American Express BUSINESS Gold Card

We’ve got another big change from American Express to talk about. The new American Express Business Gold Card. Before I get going, I need to give a hat tip to Doctor of Credit as the source of these rumors, and I stress they are still rumors, but he’s always been reliable in the past so I have no reason to doubt him here. Also, because none of this is officially confirmed, I’m going to try and make this relatively quick.

So, what do we have on deck here? Just like the new Amex Gold personal card revamp last month, it appears American Express is doing to same to their Business Gold Card.

Where we stand as of 11/07/2018

Before moving on to the new and questionably improved version, let’s do a quick recap of where we are today. As it currently stands, the American Express Business Gold Card has an annual fee of $175 that is currently waived the first year. We’ve also got a publicly available 50,000 point signup bonus after $5,000 in spend. I value this at $1,130. Obviously, those who value a Membership Reward less than I do will see less dollar signs here, but at a bare minimum it’s worth 500.

amex business gold legacy earn rate

On the earn side of things, we’ve got 3 points per dollar on your choice of 1 of 5 spend categories, 2 points per dollar on the remaining 4 and 1 point per dollar on everything else. So, potential earn on business card spend is tougher to calculate than a personal card. Why? Because everyone from the guy using his business card to run a couple thousand dollars a year in hobby or side work is going to have orders of magnitude different earn than the guy running a full-time, multi-employee business pushing hundreds of thousands through the account annually. And of course, there’s everything in-between.

Annoyingly, unlike personal cards, there are not any statement credits to work with. Things like airline fee reimbursements are not present on the American Express Business Gold Card.

What the Future is Rumored to Hold

If the rumor mills are to be believed, and I think they are, the changes are as follows. That annual fee is being increased to $295, and, very sadly, it will no longer be waived the first year. The earn rate will increase to 4 points per dollar on the spend category your business spends the most on in a given billing cycle. This change from a user-selected category to a dynamically applied one might potentially be a boon to those running a business that is somewhat seasonal or cyclical in nature. I have to admit, I do like the fact this takes a little bit of the management out of it. There are only so many minutes in a day. So, in my opinion, the fact that American Express is doing a bit of earn maximization for you is a good thing. The last thing to point out on the earn side is that bonus category spend is not unlimited. As it currently stands, we’ve got a $100,000 annual cap to work with. If the Amex Business Gold Rumors are correct, this will increase to $150,000. Certainly, a welcome change, considering this will now match Chase’s current limit on their Ink Business Preferred.

Unknown at this point is whether or not the remaining categories will continue to earn a bonus as they do currently, or if they will simply earn 1 point per dollar. I always like to assume the worst, so I’m going to run some hypotheticals based on the assumption that we’ll be working with a 4 point per dollar earn rate on our biggest spend category and 1 on everything else.

Potential Signup Bonuses

On the signup bonus side of things, we’re estimating 50,000 points. It’s a guess, that’s coming from two lines of thinking. First, is Amex’s disappointing 25,000 point public offer on their revamped personal Gold Card. Second, this would match what is currently available. Unlike Chase, Amex doesn’t really have a reputation for monster public offers on new cards. Typically, better offers come from referrals or targeted promotions.

How much is this Card Worth to a Business?

To get a rough ballpark of where we might wind up, I’m going to do this from two vantage points. First, I’m going to assume our business owner is just doing this as a side gig to make a couple thousand extra dollars per year. Then, I’m going to assume we’ve got a bigger enterprise, running over $1,000,000 through the card and maxing out the bonus earn categories $150,000 limit.

For scenario one, let’s consider a small Ebay seller. They sell $2000 of hand-made widgets per month and shipping is 10% of sales. Furthermore, other product costs are 30% of sales. As I often like to do, I’ll throw in a semi-direct competitor, the Chase Ink Business Preferred.

new american express business gold earn

So right away, we see that strictly on the earn side of things the rumored new Amex Business Gold is earning roughly $64 more per year than the Chase Ink Business Preferred. That’s not a lot, considering it costs over 3 times as much.

new american express business gold earn

As for year one net earn, the Chase Ink Business Preferred simply eviscerates the new Amex Business Gold. With a superior intro bonus, near as makes no difference earn on spend and a first-year fee waiver, the new Amex Business Gold is outclassed by $852 or 70%.

Let’s move on to scenario 2. A bigger, enterprise-class business. Just to make things simple, we’re still selling on Ebay, but now we’re doing $1.5M in sales annually and bumping up against that $150,000 bonus spend limit.

new american express business gold earn

On the annual earn side of things, the new Amex Business Gold card is now earning 4,020 more than the Chase Ink Business Preferred.

new american express business gold earn

Going back to net year one earning, and the new Amex Business Gold is now earning $3,103 more than the Chase Ink Business Preferred.

Where do they Meet?

So this leaves an obvious question, at what point, under similar spend patterns as used above, does the new Amex Business Gold card become more valuable than the Chase Ink Business Preferred?

The answer here is not hard to calculate. On the Amex side of things, we have an earn rate of 1.58¢ per dollar of revenue. Keep in mind this is a slightly different way of looking at it than earn on spend.

The Chase Ink Business Preferred earns 1.31¢ per dollar of revenue, has a signup bonus worth $1,752 and a first-year annual fee of $0. Also keep in mind that the signup bonus does not come into play until $5,000 of spend, or $12,500 in revenue, for the new Amex Business Gold or Ink Preferred.

amex business platinum vs chase ink business preferred

Taking the $1,130 annual fee and reducing it by the $295 cost of card give us $835. This is $917 less than the Chase Ink Preferred with it’s signup bonus worth $1,752 on no annual fee in year one. That means, the difference in earn on revenue needs to make up $917. Mathing it all out and we find that one needs revenue of $339,629 to glean more value from the new Amex Business Gold than the Chase Ink Preferred.

amex business platinum vs chase ink business preferred

Throwing all of this into the Excel-er-ator and we get this chart. We can see right here at the beginning there’s an area you’ll actually lose money on the Amex Business Gold, this is prior to hitting that minimum spend requirement.

I think it’s pretty obvious to see where these cards fall market-wise. Amex is targeting larger, if fewer in number, businesses with their new Business Gold Card. Chase is gunning for the small, but more numerous, business types.

For me, without some offsetting statement credit, $295 is too steep a price for the new Amex Business Gold Card. I find the new card, if rumors are correct, to be a devaluation. Of course, these numbers do vary as business margins change. In other words, as one’s expenses as a percentage of revenue change, so does the chart and breaking points. But I think the bottom line is this, you really need to be up in the six-figure plus range of revenue before the new Amex Business Gold card starts becoming viable on a net-earn basis.

H/T: Doctor of Credit