The need for Chase to develop a rival to the Amex Gold

Chase and American Express are among the leading card issuers. Given their similar offerings, their cards frequently undergo comparisons.

The American Express® Green Card goes head-to-head with the Chase Sapphire Preferred® Card, while The Platinum Card® from American Express notably competes with the Chase Sapphire Reserve®.

However, what about the American Express® Gold Card? This mid-tier lifestyle card from American Express currently has no direct rival from Chase, which seems like a missed chance. Here’s how Chase could establish a strong competitor to the Amex Gold.

The details for the American Express Green Card have been gathered independently by Dinogo. The information on this page has not been verified or supplied by the card issuer.

What exactly is a lifestyle credit card?

While this term isn’t officially defined, I believe it effectively captures the essence of cards like the Amex Gold.

Dining out and grocery shopping are significant aspects of daily life. The restaurants one frequents and the items purchased at the store play a crucial role in shaping one’s lifestyle. Thus, cards that provide bonus points for these expenditures and offer statement credits for dining and grocery shopping cater to consumers who spend heavily in these categories.

Now that we've established this, let's explore further why Chase needs to introduce a competitor to the Amex Gold.

What motivates Chase to develop a card that rivals the Amex Gold?

Creating a mid-tier lifestyle card involves more than just balancing two sets of competing cards. The Amex Gold has faced backlash due to its steep $325 annual fee and cumbersome "coupon book" credits. Shoppers seek reasonable fees for valuable services, preferring benefits that are straightforward and easy to access.

Following the Amex Gold's update in late July 2024, many users have expressed their frustrations on Reddit regarding the card's complex benefits and soaring annual fee, which is nearing premium-tier levels.

I believe it’s the perfect opportunity for Chase to respond to these issues by launching a card that counters the Amex Gold: affordable and user-friendly. Healthy competition in the credit card arena fosters innovation and promotes better practices for consumers.

Should Chase deliver an impressive alternative to the Amex Gold, it may push American Express to adopt a more competitive stance in future updates of the Amex Gold.

Annual fees and benefits of Chase's lifestyle card

What features might a Chase mid-tier lifestyle card include? Given that Chase's rivals for the Amex Green and Amex Platinum provide lower annual fees, this new card should follow suit. With the Amex Gold charging $325, Chase's offering should aim for an annual fee between $150 and $195.

When it comes to benefits, Chase must proceed with careful planning. Many Reddit users highlight that a frequent complaint about the Amex Gold is its monthly dining statement credits, which require enrollment and have specific terms.

The dining credit is restricted to a few select brands like Grubhub, Wine.com, and The Cheesecake Factory. Users on Reddit have voiced their dissatisfaction, particularly regarding the $10 monthly limit (up to $120 annually).

Many Amex Gold cardholders on Reddit express frustration with the card's $7 monthly statement credit for Dunkin' Donuts (up to $84 annually). For those living in areas without Dunkin' (like me), utilizing this credit is quite difficult. Enrollment is also required.

In light of these critiques, Chase should offer up to $100 in statement credits annually for dining expenses. This should encompass spending at restaurants as well as takeout and delivery services. The approach should be straightforward—no brand limitations or monthly credit caps. Additionally, a complimentary DashPass subscription, similar to what's offered with Sapphire Preferred and Sapphire Reserve, should be included.

Users on online forums have frequently pointed out the absence of a Chase consumer credit card for gas purchases. If Chase were to provide a statement credit for gas on this card, it would distinguish itself from nearly all other consumer gas cards. This card could include up to $100 in statement credits annually for purchases at gas stations, again without brand restrictions or other complications.

With the anticipated annual fee of $150 to $195 for this card, offering up to $200 in statement credits each year would provide cardholders with substantial value.

As an additional perk, the card could provide a complimentary six-month Lyft Pink membership, which offers priority pickups and free cancellations.

Accumulating points with a Chase lifestyle card

When considering the typical American's daily spending, three key categories stand out: gas, groceries, and dining. Since the Amex Gold rewards bonus Membership Rewards points for both groceries and dining, a Chase lifestyle card that includes these three categories would be highly competitive.

At the very least, Chase should align with the Amex Gold’s rewards structure for groceries at U.S. supermarkets and dining at restaurants, offering 4 points per dollar for the first $25,000 spent annually at supermarkets and up to $50,000 at restaurants, reverting to 1 point per dollar thereafter.

This lifestyle card should allow cardholders to earn a minimum of 4 Ultimate Rewards points per dollar spent on dining and groceries at U.S. supermarkets. Following this model, it could also offer 4 points per dollar on gas, ensuring consistency across categories. Unlike the Amex Gold, this card should not impose any spending limits.

Considering that TPG values Chase points at 2.05 cents each (as of July 2024), this translates to an effective return of over 8% on purchases for groceries, dining, and gas.

Another possibility could involve allowing cardholders to earn 6 points per dollar on their choice of gas, groceries, or dining each quarter. While cards like the Chase Freedom Flex® feature rotating quarterly categories (with activation needed), they don't let cardholders select which category earns bonus points. Providing the flexibility to choose would make this card especially appealing.

This setup would enable cardholders to maximize their rewards across gas, groceries, and dining without needing to switch cards. For the two categories not chosen for the 6 points per dollar rate each quarter, cardholders would earn 4 points per dollar. For instance, if you opted for 6 points per dollar on gas this quarter, you'd earn 4 points per dollar on dining and groceries.

In either earning structure, purchases made through Lyft would earn 3 points per dollar, while all other purchases would yield 1 point per dollar.

How would this card integrate into the Sapphire lineup?

This proposed card would sit neatly between the Sapphire Preferred and Sapphire Reserve. The Sapphire Preferred accrues points on online grocery purchases, while both the Sapphire Preferred and Sapphire Reserve earn points for dining. By adding this new lifestyle card, the existing Sapphire cards could shift their focus away from groceries and dining, allowing them to emphasize travel benefits instead.

Therefore, it would be logical for cardholders to maintain both this new card and either the Sapphire Preferred or Sapphire Reserve. To emphasize this relationship, this card should also carry a "Sapphire" name.

However, it should not be subject to the same application limitations as the Sapphire Preferred and Sapphire Reserve. Cardholders ought to have the option to hold this card alongside one of the other Sapphire cards, ensuring that earning a bonus on one doesn't exclude them from earning a bonus on the other.

When comparing the costs of this card paired with the Sapphire Reserve against the Amex Gold and Amex Platinum, there is a significant difference in overall expenses for consumers. Depending on the pricing of this new card, the combined annual cost for it and the Sapphire Reserve could range from $700 to $745, while the Amex Gold and Amex Platinum would total $1,020 each year (refer to Amex Platinum rates and fees).

In conclusion

Now is the perfect moment for Chase to introduce a competitor to the Amex Gold. A thoughtfully crafted mid-tier lifestyle card could generate considerable interest and applications for Chase. This is a prime opportunity for Chase, and if they were to launch a card like the one I’ve described, I would certainly apply for it.