For many business owners, choosing the right credit card is crucial for managing company expenses and maximizing rewards. The American Express Business Gold Card, with its substantial annual fee of $375, offers significant benefits and rewards.
Welcome Bonus
The Business Gold Card features a robust welcome offer: 70,000 points after spending $10,000 in the first three months. This can be a high threshold for some smaller businesses, but for those already spending this amount, the bonus points equate to approximately $1,400 when valued at 2 cents per point (according to The Points Guy).
Occasionally, Amex also offers enhanced bonuses, such as 150,000 points for the same spending threshold, providing even greater initial value.
Earning Back the Annual Fee
Monthly Credits
- General Spend: Earn a $20 monthly statement credit for purchases at select businesses like FedEx, GrubHub, and office supply stores, totaling $240 annually.
- Walmart Plus Membership: Enjoy a monthly statement credit of $12.95 for Walmart Plus, covering the cost of membership and contributing an additional $155.40 per year to offsetting the annual fee.
If utilized fully, these credits can total $395.40 annually, which alone more than covers the card’s annual fee.
Points Earning Potential
Reward Structure
- 4X Points: Earn four points per dollar on the top two spending categories each billing cycle, up to $150,000 per year, from six possible categories including advertising, software subscriptions, and more.
- 3X Points: Direct bookings for flights and prepaid hotels through AmexTravel.com also earn three points per dollar.
- 1X Points: All other purchases earn one point per dollar.
This rewards structure is especially beneficial for businesses with high expenditures in the eligible categories.
Real-World Application
Consider a business spending around $36,000 annually on advertising. At 4 points per dollar, this equates to 144,000 points annually. Valuing these points at 2 cents each gives you $2,880 worth of travel or other rewards. If your spending approaches the $150,000 cap in the 4X categories, the potential value climbs to $12,000 worth of points annually, far surpassing the cost of the card.
Calculating Break-Even Spending
To determine if the card is financially beneficial for you, subtract the value of the statement credits from the annual fee. Then, estimate your potential earnings from the points:
- 2 Cents Per Point: You need to spend at least $800 monthly in the 4X categories to break even.
- 1 Cent Per Point: If you primarily redeem through the Amex travel portal at a lower value, your break-even monthly spending doubles to $1,600.
Conclusion
The American Express Business Gold Card can be a valuable tool for businesses that spend heavily in the card's rewarded categories and can fully utilize the monthly credits. By calculating your expected spending and rewards, you can determine whether the $375 annual fee is a worthwhile investment for your business.
If you want to know which credit card should be your first choice when starting a business in 2024, check out our other article: