[ANALYSIS] Scotiabank Platinum American Express Card

Scotiabank has an interesting Platinum American Express Card. This credit card allows you to earn Scotia Rewards. Below are the highlights of the card:

• $399 annual fee
• $99 for supplementary cardholders
• Earn 30,000 bonus points with your first card purchase (promotion until December 31, 2013 now until March 31, 2014)
• Earn 4 points for every $1 you spent at eligible gas stations, grocery stores, on dining and entertainment (on the first $100,000 in purchases)
• Earn 1 point for every $1 on purchases made after $100,000 annual spend maximum
• Earn 1 point for every $1 spent on all other purchases
• Complimentary annual membership to Priority Pass Airport Lounges Worldwide
• Complimentary Hertz #1 Club Gold Membership
• Flexible point redemption

First of all, the $399 annual fee is quite steep and the 30,000 bonus points promotion doesn’t even cover the annual fee, because 30,000 points nets you $300 in rewards. This is already my deal breaker. Now the question is whether there is a way to get value out of the credit card to justify for the annual fee.

Right off the bat, I am happy to see the 4 points per dollar on a fair amount of different merchants, which include: gas stations, automated fuel dispensers; grocery stores, supermarkets; eating places, restaurants, drinking places, fast food restaurants, Motion Picture theaters, theatrical producers, ticket agencies, bands, orchestras and miscellaneous entertainers. As long as they are not strict on what falls under these categories, the points can add up in a hurry if you are a big spender on these categories. Here’s a quick calculation. If you spend $2,000 per month on these spending categories, then:

• $3,000 x 12 months x 4 points = 144,000 points (still only $1,440 in value)

The maximum you can earn in one year is:

• $100,000 x 4 points = 400,000 points ($4,000 in value)

Having the secondary cardholder will help you reach the $100,000 faster, though I’m not sure how many people actually spend that much in a year anyway, on an AMEX credit card no less.

The first 10 lounge visits for the primary cardholder and the first 4 lounge visits for the secondary cardholder are complimentary for Priority Pass Airport Lounges. Beginning with the 11th visit for the primary cardholder and the 5th visit for the secondary cardholder, each visit costs $27 USD. This membership is equivalent to the Standard Plus Membership valued at $249 per year, which gives the same 10 visits per year.

The $99 annual fee for the secondary cardholder essentially covers the 4 visits to the lounge. If you value lounge access and you were planning on paying for a membership anyway, getting the credit card would cover that bill instead.

The Hertz #1 Club Gold Membership can also be useful if you rent cars from the frequently.

Conclusion: It is possible to get enough value out of the $399 annual fee if you can earn a lot of points in the 4x category. If you are not a big spender, then the $399 annual fee is quite steep.

Recommendations to Scotiabank: If the sign up bonus drops below the 30,000 points, then I hope the annual fee will drop too. Because the lounge access is valued at $249, I think at $299 annual fee might be more reasonable if the sign up bonus is going to drop significantly. Otherwise, if the annual fee is going to stay the way it is, I hope the regular sign up bonus remains 30,000 and during promotion time, it goes up to 50,000.