I Made Money by Paying a $40 Annual Fee on the JetBlue American Express Card

One card you never hear talked about in the points & miles world is the American Express JetBlue credit card and I can see why. The signup bonus is weak at only 20,000 points, TrueBlue points are worth less compared to other frequent flyer miles, you can only redeem points on JetBlue (or Hawaiian Airlines) flights and JetBlue’s flight network is mainly confined to the continental 48 states, Anchorage, Mexico and the Caribbean. Being based in New York, I have plenty of chances to fly JetBlue but I will have exactly one roundtrip flight with them this year. So with all that said, I decided to pay $40 to renew my card so I could make money. Let me explain.

Jet_blue_card

First, let’s start with why I have this card. Last year, American Express announced that as of May 1st, 2014 if you ever had a personal American Express card, you would not be eligible for another signup bonus on that card for the rest of your life. At that point, I looked at what American Express cards I had there were already closed that had signup bonuses and it was the JetBlue Card. I proceeded to apply for it again before the 5/1/14 deadline and earned an extra 20,000 TrueBlue points that I would not be able to earn again.

Now a year later the $40 annual fee was due and I had decision to make to cancel the card or pay the annual fee. At first blush, I thought I was going to cancel the card as I don’t fly JetBlue often (even if I did, I don’t think it makes a difference unless you really value the 50% off in-flight food/drinks) and I solely got this card for the 20,000 points a year ago. However, I knew I was going to ask for a retention offer since you should always do that before closing a card. If I got the fee waived, a statement credit for $40 or points equivalent to $40, I’d keep the card open since I’d essentially be even.

Except that’s not true. American Express in the past few months has had several great Amex Offers (Sam’s Club, Smart & Final, Whole Foods and a bunch of others I’m forgetting) and I think its fair to say over the next 12 months, I could definitely find a few to take advantage of. And I’m betting that American Express will run its Small Business Saturday promotion in November which was worth $30 per card last year. If I value the annual savings from Amex Offers at $30 (which is low in my opinion) and Small Business Saturday at $30 (just like last year), I’m actually up $20 after paying the $40 annual fee.

But wait – it gets better. That analysis above is assuming I just have my JetBlue card with no authorized users. As you probably know, you can add Amex Offers to authorized users cards AND those cards are also eligible for Small Business Saturday. You can have up to 5 additional authorized users so if you maxed this out this could be worth $300 ($60 per authorized user). 

American Express lets me add up to 5 authorized users

American Express lets me add up to 5 authorized users

Suddenly, it was quite clear – I will make money by paying the $40 annual fee. There is no way I should cancel this card and that’s true even if I don’t get a retention offer (though I did – see below).

In closing, I think there are two lessons to take away from this.

Lesson 1: To always ask for an offer before closing an account. I literally told the agent on the phone unless I get an offer with points or a statement credit to waive the fee, I will be closing this card now. I didn’t expect to get an offer based on my research I did prior to calling so I was pleasantly surprised. When the agent offered 2,500 TrueBlue points for not cancelling the card, I took it immediately. Valuing those points at 1.3 cents each, that retention offer was worth an extra $32.50 to me.

Lesson 2: The obvious choice isn’t always the right choice. Assuming you agree with my decision to open the card in the first place, I’m sure the consensus from others getting the card would be to close it after one year no matter what. There is no upside to renewing such as bonus points or other upfront perks that other cards offer for renewing. However, by digging down just a little bit, I realized I could make a profit by renewing this card if I used some Amex offers, took advantage of Small Business Saturday and added some authorized users. The icing on the cake would be if I got a retention offer as well. When I did the math above, I came out net positive so I kept the card as well as helping my credit score by not closing another card and shortening the average length of my accounts.

Do you agree with my rationale to keep my card open another year?

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One thought on “I Made Money by Paying a $40 Annual Fee on the JetBlue American Express Card

  1. Interesting post! I never thought to add authorized users to my 1 Amex card… I think I will do this to take advantage of the small biz Saturday and what not. New to your blog, but I’ve already read a few post. Good stuff!

    Like

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