The Delta SkyMiles Gold American Express Card. My renewal decision ultimately came down to whether TakeOff 15 could recover roughly $50 of remaining annual fee.
When the $150 annual fee for my Delta SkyMiles Gold American Express Card hit the account, I expected the decision to take about five minutes. Because the first year carried no annual fee, this is really the first time I’ve had to decide what the card is actually worth.
The immediate problem was entirely of my own making. My annual fee is due in a few days, yet I still haven’t used this year’s $100 Delta Stays credit. Ideally that credit should already have been used months ago. By leaving it until the last minute, I’d created a completely unnecessary race between using the benefit and deciding whether to keep the card.
At first, I found myself thinking about the mechanics. Could I still book a qualifying Delta Stays reservation? Would the statement credit post before renewal? What would happen if I cancelled the card shortly afterwards?
Those were interesting questions, but I eventually realized I was asking the wrong one. Before worrying about the timing, I wanted to know whether renewing the card stood on its own merits. If it did, the timing became little more than an unnecessary headache of my own making.
Starting With the Obvious Arithmetic
The renewal calculation initially looked straightforward. Another $150 annual fee would allow me to use this year’s remaining $100 Delta Stays credit before December 31 and another $100 credit after January 1. On paper, that’s $200 of hotel credits against a $150 annual fee, and it’s easy to see why many people would stop their analysis there.
But the first $100 credit doesn’t exist because I renew. It already exists because I signed up for the card late in the prior calendar year. Assuming I use it while the account is still open and the statement credit posts as expected, I’ll receive that benefit whether I renew the card or not. It has already been earned.
There is some uncertainty around the credit posting in time, but it still feels correct to cross that credit out of the renewal calculation, and in doing so the balance changes: Renewing the card doesn’t buy me $200 of hotel credits. It buys me one additional $100 hotel credit.
The question therefore stopped being whether a $150 annual fee was justified by $200 of benefits. Instead, I was trying to decide whether the rest of the card was worth roughly fifty dollars.
What Does Fifty Dollars Buy?
My first instinct was to assign a dollar value to every remaining benefit individually. A checked bag, Main Cabin 1 boarding and the inflight discount all have value, but the more I thought about it, the less sense that approach made.
The main reason I’d keep this card is TakeOff 15. If I expect to redeem Delta-operated award flights over the next year, the mileage discount has genuine value. Once I make that assumption, the rest of the card starts to look different. Free checked bags, Main Cabin 1 boarding and the inflight discount aren’t independent reasons to renew. They’re benefits that naturally come into play because I’m already flying Delta. I don’t need to convince myself that any one of them justifies another annual fee on its own, but it would also be wrong to value them at zero because they’re all likely to be used if the reason for renewing the card proves correct.
The real question became much simpler:
How much value does TakeOff 15 have to generate before the remaining renewal decision looks sensible?
TakeOff 15 gives eligible Delta SkyMiles American Express cardholders a 15% discount on the mileage cost of eligible Delta-operated award flights. It became the key variable in my renewal calculation.
Working Backwards
According to Frequent Miler’s Reasonable Redemption Value (RRV), Delta SkyMiles are worth about 1.1 cents each. If the remaining cost of renewal is roughly fifty dollars, then TakeOff 15 only needs to save me about $50 worth of SkyMiles before it has recovered that amount.
At 1.1 cents per mile, fifty dollars is equivalent to 4,545 SkyMiles. TakeOff 15 reduces the mileage cost of eligible Delta-operated awards by 15%, so I worked backwards one more step.
How many SkyMiles would I need to redeem before a fifteen percent discount saved me roughly 4,500 miles?
Calculation | Result |
|---|---|
Annual fee | $150 |
Less: Next year’s Delta Stays credit | -$100 |
Remaining cost to justify | $50 |
SkyMiles valuation | 1.1¢ each |
SkyMiles savings needed | 4,545 |
TakeOff 15 discount | 15% |
Delta-operated award redemption needed | ≈30,300 SkyMiles |
Applying It To My Own Situation
Delta SkyMiles aren’t one of my larger points balances. I currently have about 53,000 miles sitting in my account, so needing to redeem around 30,000 over the next year doesn’t feel like an ambitious assumption. Delta also periodically releases award sales that can represent excellent value, and even if I eventually needed to top up the balance, I wouldn’t hesitate to transfer Membership Rewards at the standard rate if Delta happened to offer the best itinerary.
I don’t need to assume that I’ll redeem every remaining SkyMile in my account. If I redeem roughly 30,000 SkyMiles on eligible Delta-operated flights over the next year, TakeOff 15 alone has probably covered the remaining cost of renewal. Everything else the card provides, whether that’s checked bags, boarding privileges or inflight savings, simply improves the economics from there.
That conclusion deliberately ignores a few smaller benefits added more recently, including a monthly rideshare credit after the first renewal (enrollment required). I haven’t relied on those in my calculations because I wanted to know whether the card justified itself without them. If I end up using them, they’ll simply strengthen the case for keeping it.
A Better Renewal Question
Leaving the Delta Stays credit until the week my annual fee became due was a silly mistake and I’ll certainly avoid doing that again. But assuming that every benefit attached to the card belonged in the renewal calculation was also off track.
Separating benefits I’d already earned from benefits another annual fee would create made the renewal decision much clearer.
Looking back, I don’t think the important question was ever whether the Delta SkyMiles Gold Amex is “worth” $150 a year. The better question was whether I expect to redeem around 30,000 Delta SkyMiles over the next twelve months. For me, the answer is probably yes. Once I’d reframed the decision that way, renewing the card became much easier to justify.