Cashback cards don’t get a huge amount of attention on Tricks of the Trade. That’s mainly because if you’re looking for an outsized return on your credit card spending, cashback doesn’t really get the pulses racing in the same way that miles and points do.
But should it?
Today, I’m going to take a closer look at the American Express Platinum Cashback Everyday Credit Card.
This card currently offers 5% cashback on all of your purchases (capped at £100) for the first three months of card membership.
This is a significant downgrade over the welcome bonuses on other Amex cards. The Amex Gold card, for example, offers 20,000 Membership Rewards points (worth 20,000 Avios) when you apply and spend £2,000 in the first three months.
£100 cashback versus 20,000 miles = a no-brainer. You’re effectively buying (by choosing not to take cashback/putting this spending on a cashback card) 20,000 miles for £100 – which is a solid deal.
This card has no annual fee.
Representative 22.9% APR variable. Based on purchases rate 22.9% p.a. variable and no annual fee.
Day-to-day earnings rate
Spend £0 to £5,000 and receive 0.5% cashback on purchases
Spend over £5,000 and receive 1% cashback on purchases
But beware: you must spend at least £3,000 on your card in a membership year in order to receive any cashback.
You should also know that cashback is only paid once a year, in the month after you applied for the card. This is a disappointment and a major downside versus a miles and points card, where the points are available to use within a few days, in the case of Membership Rewards points, or they are swept across to your British Airways or Starwood accounts once a month.
Refer-a-friend for extra cashback
Much like many of the other American Express cards, there is a refer-a-friend system available on this card:
Earn a £20 bonus for each approved referral – up to £150 a year.
Here’s where the cashback card(s) really loses out. £20 per approved friend really isn’t very appealing. In comparison, an Amex Gold cardholder will earn 9,000 Membership Rewards points for every approved friend.
£20 or 9,000 points? There’s only one winner – it’s going to be the points every time!
Am I eligible for the welcome bonus?
You are eligible for the sign-up bonus UNLESS you hold or have held any of the Amex Cashback cards in the last 6 months.
You WILL still receive the sign-up bonus on this card if you hold/have held the Amex Gold/Platinum, BA Amex cards, Starwood card or Nectar Card.
There are NO minimum income requirements to be eligible for any cards issued by American Express. This restriction was removed a number of years ago.
I’ll take a proper look at the cashback v miles and points debate next week when I review Amex’s other cashback card; the Platinum Cashback Credit Card. One thing is clear though, for day-to-day spending the argument for using a miles and points card is under scrutiny!
Say the alternative card for you would be the free British Airways Credit Card. To get a ‘free’ return flight via Reward Flight Saver to the likes of Paris or Amsterdam (off-peak), you’d need to spend £8,000 on your card. Alternatively, this card will give you £80 cashback (at the end of the year mind). As long as you’re not looking at the very last minute, you can often find cheap non-stop return flights from Paris to London for that £80 or less.
If cashback is your thing, this card offers a good return for a no-fee product.
The real let-down of this card for me is the fact that cashback is only paid once a year, after your card anniversary date. If you’re looking to earn rewards on your spending, having to wait a year to see a return on your money is not particularly encouraging.
Do you prefer earning cashback or miles/points on your spending?
Disclaimer: The above information is intended solely as a helpful guide to relevant card products on the market and the various rewards they offer. You should, of course, always conduct your own research as the recommendations provided within may not be suitable for your personal financial requirements.