Originally Posted by
RedSun
It is just so funny some so called "road warriors" want to take the public AmEx Centurion lounges to themselves and keep other people out. They want to stay there weekly, bi-weekly, or monthly and won't want other folks to stay there 2-3 times a year. AmEx Centurion lounges are not private clubs.
Centurion lounges are most certainly not "public" and are by definition "private clubs."
AmEx won't make money by giving out 5x MR for those "road warriors" to charge the expensive air tickets on its Platinum cards. Period.
What AmEx wants cardholders to do is to charge EVERYTHING, like grocery, dining and everyday spending on the Platinum card. And they only give out 1x MR on those other spendings.
Credit cards make money from AFs and card swipe fees. If the expenses like lounges, Saks, Uber, airline credits, Doordash cost more than AFs collected, AmEx won't make money. Also if the awards on spending like 5x on airfare, 4x on grocery+dining can't cover the swipe fees, then AmEx won't be making money too. AmEx makes the most from folks who pay AFs, but do not travel and do not use any of the "benefits". Also from the folks who put on 1x charges on the "wrong" cards.
Amex negotiates those credits with Saks, Uber, Doordash, etc. For the end consumer they have a $10, 15, 200 redemption value but Amex doesn't actually eat that full amount. They negotiate a discount through those merchants because they're going end up with more sales overall. It's no different than their bulk purchasing of airline miles, they pay a wholesale rate that is not accessible to individual consumers.