American Express (Amex) has announced major changes to its credit cards, which will affect both existing and new customers.
The main changes, coming into force from 1 October, include:
- a dormancy fee of £20 if you don’t spend on your card for 12 months
- a higher minimum cashback threshold, meaning you’ll have to spend more on your card to qualify for any cashback at all
- changes to cashback tiers, reducing the maximum cashback earned by new customers from 1.5% to 1.25%, but also lowering the level of spending at which you start earning that rate
- an increased interest rate (APR) of 19.9% for new customers
New Amex cashback cardholders
With immediate effect, some new rules will affect anyone applying for an Amex cashback card:
- Cashback is payable at 0.5% on amounts up to £3,500, 1% on spending additional up to £7,500 and 1.25% on amounts above £7,500. While the top rate has reduced from 1.5% to 1.25%, it is now payable on spending above £7,500, rather than the previous £10,000 threshold, so the net effect of the change will depend on how much you spend. For example, if you spend £10,000 a year on your credit card, you’ll be better off under the new system, but if your spending rises to £15,000, you’ll receive less cashback than you would have before.
- The minimum monthly repayment has increased to 10% of the total balance on the card or £50, whichever is greater. If you pay off your bill in full every month, you won’t be affected by this change. If you don’t pay off your bill and therefore borrow on the card, your minimum repayment will rise. However, with an interest rate of 19.9%, the Amex cashback card is not competitive for borrowing and you’d be better with a Best Buy credit card for borrowing, such as the Barclaycard Simplicity Visa card, which has an advertised interest rate (APR) of just 6.8%.
- No cashback is payable if you spend less than £3,000 a year on the card, not including cash advances and balance transfers. This limit was previously £2400.
- The typical interest rate (APR) on the card has increased to 19.9%
Existing and new customers for all Amex cards
From 1 October, card users will have four fewer days to pay their bill. The period between the statement date and the due date used to be 18 days, but will now drop to 14 days. If you pay by direct debit and have lined up your credit card payment date to coincide with payday, you should consider asking Amex to put back your statement date by four days to avoid missing payments or going overdrawn at the end of the month.
Existing Amex cashback cardholders
From 1 October, some of the changes to the Amex cashback card will also affect existing customers:
- A dormancy fee of £20 per year will be payable if the aggregate amount of all transactions, other than cash advances and balance transfers, over the preceding 12 months is zero.
- The minimum cashback threshold is increasing to £25 per year. If you earn less than £25 cashback over the 12-month period, you’ll lose it. At standard cashback rates, you’ll need to spend at least £4,250 a year on your card to guarantee that you’ll receive any cashback at all.
- Both the APR of 18.9% and cashback levels remain as they were.
We’ll be analysing these changes further in October’s Which? Money magazine. Why not try two trial issues for just £2?
To find the best cashback credit card for you, check out the Which? review of cashback cards.
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