Today (9/12/12) only, American Express is doing one of its once-every-few-months, one-day-only 75k Membership Rewards sign up bonuses for the American Express Gold Business card.

I won’t give a full rundown of the rules and benefits of the card–you can get that from thepointsguy–but I will answer the following question: should you get the 75k sign up bonus on this card or the 50k sign up bonus?

If the answer seems obvious, it is not. In my post, “The Two Ways to Value Credit Card Sign Up Bonuses,” I described both the absolute-value method and rebate-percentage method.

The absolute-value method is what most people are probably more familiar with. Add up the benefits of the sign up bonus and subtract the first-year annual fee if any. Right now I value 75k MR at $1,785 (75k * 2.38 cents per MR).

There is no annual fee the first year on the AMEX Gold business card and no other value to signing up meaning the absolute value of the 75k MR card, $1,785, dwarfs the absolute value of the 50k MR sign up card, $1,190.

Stop reading here and get the AMEX Gold business card today if you spend tons of money per year on credit cards ($100k+) or you are only getting 1-2 cards this year because of an upcoming mortgage application. The absolute value of the sign up is mouthwatering.

But if you, like me, spend very little on cards each year ($30k), then this is not the best AMEX Gold business offer.

Instead the best offer is the 50k MR sign up bonus. The reason is that the 75k MR sign up bonus has a $10k minimum spend to unlock the bonus. The 50k MR card has only a $5k minimum spend requirement.

People who don’t spend enough to clear all the minimum-spending requirements for all the cards they want should use the rebate-percentage method to order cards on their wish list.

The rebate-percentage method takes the absolute value and divides by the spending requirement to get the percentage of the minimum spend that is rebated in the form of points or other benefits.

The 50k MR card’s rebate percentage is an impressive 23.8%. The 75k MR card’s rebate percentage is only 17.9%.

That means, if you are looking at the most bang for your small buck like me, you should get the 50k MR card.

Recap

75k MR American Express Gold Business, Application Link

Issuing bank: American Express

Rebate percentage of sign up bonus: 17.9%

Absolute value of sign up bonus: $1,785

50k MR American Express Gold Business, Application Link

Issuing bank: American Express

Rebate percentage of sign up bonus: 23.8%

Absolute value of sign up bonus: $1,190

I can’t say exactly where the annual-card-spending cutoff is where you can move from the rebate-percentage method to the absolute-value method. But I do know that the 50k MR sign up bonus is right for me.

 

10 COMMENTS

  1. What about a small spender, but with some big ticket items coming up? I’m like you, probably 30-40K/ year on cards, but I’m about to have a quick 3 or 4 thousand spent all at once, and clearing the remainder is doable if I focus my spending (the opportunity cost being not spending on my Sapphire/Freedom/SPG main drivers). I was considering the Ink Bold or Plus anyway, which has the 10K/3 month deal also and is better for my long term spending, plus a couple on-first-spend cards, but I have no MR accounts yet and around 150K UR points. How do you factor that information into calculating whether to dive in for 75K now, or get the 50K and something else, or get an Ink card?

    • Focus on total annual spend not one upcoming purchase. There are always tricks to move spending forward, so the key factor is annual spend. Ink Bold/Plus has a worse rebate percentage than both Biz Gold offers. It is nice to vary your points, so if you have a lot of UR, you should get some MR too. For you I would recommend the 50k MR card.

  2. I guess what it comes down to is the opportunity cost of the $5,000 difference between cards. Since you calculate their absolute values ($1,785 – $1,190 = $595), you have to ask yourself if you can get a bigger return spending the $5,000 on other sign up bonuses. My guess is yes.

  3. Really great analysis! My gut instinct this morning was that I should be seriously considering the 75k offer, even though the spend would be tough with various other cards that I’m trying to fulfill already. Somehow I was feeling almost “guilty” if I walked away from this opportunity of getting 75k points that everyone was blogging about, but your rebate-percentage method gives me a way to feel good about the decision to skip the offer this time :) I’ll still have time to get the 50k offer before it ends in November, and by that time I’ll be in a more comfortable position to definitely complete the smaller minimum spend.

  4. Scott,
    Did you elect to apply for the 50k offer and if so, do you have a copy of the offer or a screenshot? I met the minimum spend a while back. However, the points haven’t yet posted and I just realized my copy was lost when I reformatted my laptop last month.

Leave a Reply