American Express Halves Cashback On Major Credit Cards As Of This Week: Should Customers Go Elsewhere?
- Amex offers free credit cards and refunds of Â£ 25 per year paying up to 1.25%
- Payments will be reduced based on the amount spent
- Those who spend between Â£ 5,000 and Â£ 10,000 on the free card are the most affected
- Cards remain the best cashback offers
American Express and its market-leading cash back credit cards are getting a little less generous, with the provider cutting customer revenues by 50% in some cases.
Payments on the free American Express Platinum Cashback Everyday and Platinum Cashback credit cards of Â£ 25 per year can currently total hundreds of pounds per year with refund rates of up to 1.25%.
However, for newcomers starting today and for existing customers starting August 4, the cash back rates will be reduced.
American Express reduces cashback paid on some of its credit cards
The free card currently pays 0.5% on up to Â£ 5,000 per year and 1% cash back on higher spending. However, depending on the changes, all spending up to Â£ 10,000 will only earn 0.5%.
Spending more than Â£ 10,000 will pay the same return, but those spending between Â£ 5,000 and Â£ 10,000 could see what they earn cut in half.
Meanwhile, the Â£ 25 per year card currently pays 1% on spending up to Â£ 10,000 per year and 1.25% cash back on higher spending. But as a result of the changes, cashback earned on expenses of up to Â£ 10,000 will be reduced by a quarter to 0.75%.
Both cards come with a generous sign-up bonus of 5% cash back on purchases made in the first three months, capped at Â£ 125 for the paid card and Â£ 100 for the free version. These are not affected by the changes.
But despite cuts that eat away at cardholder feedback, Rob Burgess, editor of the frequent flyer website Head for Points, said it didn’t make a substantial difference for the cards.
“These cuts do not change our view of the best card,” he said. âThe breakeven point remains at Â£ 10,000. In other words, if you spend more than Â£ 10,000 per year, you have to pay the Â£ 25 annual fee. If you spend less than Â£ 10,000 a year, it’s not worth it.
âStick to the free Platinum Cashback Everyday card.
|Menu||Old cashback on Â£ 5,000||New cashback on Â£ 5,000||Old cashback on Â£ 10,000||New cashback on Â£ 10,000||Old cashback on Â£ 20,000||New cashback on Â£ 20,000|
|Platinum Silver Rebate||Â£ 25||Â£ 12.50||Â£ 75||Â£ 50||Â£ 225||Â£ 175|
|Platinum cashback every day||Â£ 25||Â£ 25||Â£ 100||Â£ 50||Â£ 200||Â£ 150|
|Santander all-in-one Mastercard||N / A||– Â£ 11||N / A||Â£ 14||N / A||Â£ 36|
|Barclaycard Rewards credit card||N / A||Â£ 12.50||N / A||Â£ 25||N / A||Â£ 50|
|Source: It’s money / Head for points (figures are net, fees included)|
Spending Â£ 5,000 would earn Â£ 12.50 on the Â£ 25 per year card after factoring in the charges, and Â£ 25 on the free card, despite the lower refund rate.
Spending Â£ 10,000 would bring in Â£ 50 after charges, and the same amount on the free version. But spending Â£ 20,000 would earn Â£ 175 on the Platinum Cashback card, compared to Â£ 150 on the Everyday card.
He added: ‘These are still good cards, despite the reduced cashback rates. However, small spenders have less reason to get excited â.
Amex redemption cards are featured in This is Money guide to the best credit cards and both remain among the most generous offers out there. The only comparable offer is offered by Santander.
Its all-in-one Mastercard credit card pays 0.5 percent cash back on purchases and offers a range of other perks, but comes with a monthly fee of Â£ 3, or Â£ 36 per year .
Meanwhile, Barclaycard, which has made headlines in recent weeks for announcing drastic cuts to borrower credit limits, is offering a card that pays 0.25% cashback on all purchases. It also comes with free overseas spending and an APR of 22.9%.
In contrast, the free Amex has an APR of 22.2% and that of Â£ 25 per year of 27.3%.