Is the American Express Gold Card Really Worth It?

With its shiny metal and unique coloration, the American Express® Gold Card is certainly impressive -- and so are its rewards. But that's not the only impressive thing about this card. No, there's also its annual fee, which makes an impression for all the wrong reasons.

At $250 (see rates and fees) a year, this is not a credit card for the faint of wallet. You really need to know you're going to get your money's worth out of it. Overall, whether the card is worth it depends on how long you're going to keep it, and how you're going to use it.

Apply now for the American Express® Gold Card.

Year 1: Yes, if you earn the welcome bonus

The very first year you own pretty much any rewards credit card is going to be the most valuable thanks to the welcome offer. And that's extra true with cards, like this one, that earn Membership Rewards points. That's because they can have huge per-point value when used for travel:

The current welcome offer for this card is 60,000 Membership Rewards points when you spend $6,000 in the first 6 months. (Welcome offers vary. Terms apply.)

Even with the worst redemption option on this list -- using the Cover Your Charges feature, which is basically like getting a statement credit -- you're looking at hundreds of dollars in value from those 60,000 points. That's more than enough to cover the annual fee the first year.

At the high end, you could potentially end up with enough value from free travel to cover the annual fee several times over. But that's not even the best case scenario. I've seen welcome offers for this card of 75,000 and higher. Now we're talking about upwards of $1,500 in free travel from a single welcome offer.

Apply now for the American Express® Gold Card.

If you can wait for one of the higher offers (or find a referral link), it could be worth your patience. Amex has a once-per-card-per-lifetime rule on welcome offers, so you can only earn it once for each product.

Year 2: Yes with credits, but not with points alone

After the welcome bonus dries up, the card has to stand on its own merits to be worth the cost. You'd think that would be straightforward, given it has some of the highest rates on grocery and dining rewards we've seen. But it turns out that the purchase rewards simply don't stand up to the three-figure annual fee.

Here's how many points you'd need to earn -- at the 4X bonus category rate -- to make up for the $250 annual fee:

In other words, even if you get an awesome redemption rate of $0.02 per point, you'd still need to spend at least $3,125 a year on dining and/or groceries to break even on the annual fee with points alone. If you put that spend on a no annual fee card, even if that card has a lower rewards rate, you'll probably come out ahead without an annual fee to pay.

Instead of relying solely on points to make the card worth the fee, you have to look at the credits. Specifically, cardholders earn:

• $10 a month (up to $120 a year) in statement credit for purchases at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar, and select Shake Shack locations
• $10 a month (up to $120 a year) in Uber Cash
• Terms apply; enrollment may be required

If you can max out both credits every year -- through spending you'd do anyway -- you'll get $240 in value from just the credits. That drops your effective annual fee down to $10 a year.

What if, like me, you only really use one of the credits? Well, then you have to do your own math. We spend enough in the bonus categories that the annual fee is still worth it compared to other (read: cheaper) options. The same may not be true for everyone.

Apply now for the American Express® Gold Card.

How to value your credits the right way

The most important distinction to make about valuing the statement credits is whether you'd be making the purchases either way. For example, do you already spend at least $10 a month on Uber (or Uber Eats) purchases? Then the monthly Uber Cash credit really does save you that $10 a month, because you would have spent it anyway.

But what if you don't normally use Uber? Now you're spending extra money just to get the credit. Since it's not something you'd otherwise use, it's hard to give it full value.

To sum it up: The welcome offer is enough to cover the fee -- and then some -- in the first year, so it's definitely worth getting if you can meet the requirements. After that, you'll need to use at least some of the credits for the American Express® Gold Card to be worth the cost.