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American Express to cut credit card cashback rewards from August – should you switch?

Find out whether other cashback schemes are more generous

American Express to cut credit card cashback rewards from August – should you switch?

American Express is shaking up the cashback scheme on its Platinum Everyday and Platinum Cashback credit cards from 4 August 2021, meaning some cardholders will lose out on up to £25 a year.

Amex says it started writing to existing cardholders on 10 May 2021 to inform them of the changes – but can you get better cashback offers elsewhere?

Here, Which? explains how the credit card deals will change, and what it means for your potential cashback earnings.


How will the American Express cashback scheme change?

The American Express Platinum Cashback Everyday Credit Card currently pays 0.5% cashback on spending up to £5,000 and 1% cashback on spending over £5,000.

From 4 August cardholders will get 0.5% cashback on spending up to £10,000, and 1% on spending over £10,000.

There will still be a requirement to spend at least £3,000 to qualify for any cashback, no annual card fee, and interest will remain at 22.2% representative APR (variable). Credit subject to status. Terms apply.

As for the American Express Platinum Cashback Credit Card, cardholders currently earn 1% cashback on spending up to £10,000 and 1.25% on spending over £10,000.

This will change to 0.75% cashback on spending up to £10,000, but spending above this threshold will still earn 1.25%. There’s a £25 annual fee and representative APR (variable) of 27.3%. Credit subject to status. Terms apply.

What’s not changing is the 5% introductory cashback rate, available on both cards for the first three months. This allows you to earn a maximum of £100 for the Platinum Cashback Everyday card and up to £125 for the Platinum Cashback card.

Complimentary supplementary cards will also continue to be available for family members so you can maximise cashback opportunities while spending.

Despite these forthcoming changes, it’s worth noting that American Express is a Which? Recommended Provider, as it scored an overall score of 79% in our customer satisfaction survey, with customers giving top marks for its customer service and online account management.

 

Does this mean you’ll earn less cashback?

Those who spend more than £5,000 with the American Express Platinum Cashback Everyday card will lose out on 0.5% cashback on a portion of their spending, but those who spend less than £5,000 won’t see any difference.

Yet, with the American Express Platinum Cashback Credit Card, all cardholders will see a 0.25% cashback reduction as it affects all spending of less than £10,000.

The table below shows how cashback you can earn over the course of a normal year may change, excluding the 5% bonus cashback offered when the cards are first taken out.

£3,000 spend per year now £3,000 spend per year after 4 August £7,000 spend per year now £7,000 spend per year after 4 August £12,000 spend per year now £12,000 spend per year after 4 August
American Express Platinum Cashback Everyday Credit Card (no annual fee) £15 £15 £45 £35 £95 £70
American Express Platinum Cashback Credit Card (annual fee £25) £30 £22.50 £70 £52.50 £135 £110

As the table shows, those who have the Platinum Cashback credit card and spend £3,000 per year will no longer be able to make back the £25 annual card charges after the cashback changes come into force, unless they are benefiting from the introductory 5% rate in their first three months with the card.

Why is American Express making these changes?

While American Express customers are likely to be disappointed at the cashback changes, the rates on offer are still arguably better than other cashback credit cards, as they apply to all spending rather than just certain retailers or bills.

As to why the changes are being made, an American Express spokesperson told Which?: ‘American Express regularly reviews its cards to ensure that we continue to offer our cardmembers competitive credit cards that represent good value and a full range of benefits.

‘Following a recent review, we have made some changes to the rate of cashback that can be earned on our Cashback Credit Cards for new and existing cardmembers. Our cashback cards continue to be market-leading.’

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How do other cashback credit cards compare?

Virgin Money launched a new cashback scheme called ‘Virgin Money Back’ in February, offering up to 15% cashback from certain retailers, in addition to Virgin Points if you hold a Virgin Atlantic credit card. This is different from the cashback schemes offered by most other credit cards, which tend to have a lower flat rate that you receive on all spending, rather than varying rates available with certain retailers.

This is available across Virgin Money’s full range of credit cards including the Virgin Money 29-Month Balance Transfer Credit Card. In addition to the 29-month 0% balance transfer (which comes with a 3% balance transfer fee), it offers 0% on purchases for the first three months and 20% off Virgin Experience Days and other Virgin Group discounts.  It has a representative APR of 21.9% (variable) and requires a minimum annual income of £7,000. Credit subject to status. Terms apply.

You might also consider the Santander All In One Credit Card. It offers 0% on balance transfers for the first 26 months, 0% on purchases for the first 20 months, 0.5% cashback on purchases which increases up to 15% with certain retailers, no foreign transaction fees and up to 56 days interest-free credit on purchases. You can also get up to three additional cardholders. Note that there’s an annual card fee of £36, and it has a representative APR of 23.7% (variable). Credit subject to status. Terms apply.

Other ways to earn cashback

You don’t have to sign up to a credit card to take advantage of cashback offers, as there are many other ways to make a return on your spending.

Cashback sites

Websites such as Quidco and TopCashback pay you a cash reward when you click through from their websites to buy goods or financial products. To use them, you’ll need to set up an account and then use the cashback website to search for the retailer or service provider you want to buy something from.

As long as you click on the affiliated link, you can make the purchase as usual, and the retailer will then send commission back to the cashback site, which will then pass a certain percentage back to you.

Debit cards

Some bank accounts also offer cashback, but many come with a monthly fee so you should make sure you’ll use enough of the account’s perks to warrant what you spend on it.

You can earn up to £7 a month in cashback with Barclays Blue Rewards Account, however, you need to set up at least two direct debits to be paid from the account, pay in at least £800 a month and pay a fee of £4 a month.

If you have additional Barclays financial products you may be able to earn more. For instance, you can get £5 a month if you have a Barclays mortgage; up to £5 a month with Barclays life insurance with critical illness cover; £3 for Barclays building and contents cover and £1 if you take out a Barclays personal loan.

Barclays customers must sign up to online or app banking by 3 August or risk having their membership cancelled.

Elsewhere, Santander’s 123 account offers 1%, 2% or 3% cashback on certain household bills and Santander financial products, capped at £5 for each tier – so £15 cashback overall. You have to pay in at least £500 each month, and the account costs £4 a month.

Finance apps

There’s also a number of slick open-banking budgeting and savings apps that come with cashback perks. As well as linking to your bank accounts to give an overall view of your finances, Emma offers cashback rewards within its app – rates vary, but you can earn more cashback if you opt for paid-for Emma Pro.

Elsewhere, budgeting app Snoop helps to seek out online cashback offers for your favourite retailers, while it checks that you’re not paying too much for things like energy and broadband bills.


Editor’s note: This article was updated on 13 May 2021 with the detail that Barclays Blue members must sign up for online or mobile app banking to avoid losing their membership.


 

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