Get paid to spend interest-free

The American Express Platinum Cashback Card has always been a popular choice, but now it's offering you even more benefits.

The American Express Platinum Cashback Credit Card has been leading the way with its currently unbeatable cashback offer.

Right now, you can enjoy a whopping 5% cashback in the first three months on virtually all your spending up to a maximum of £100. That's right, £100 in your pocket in return for nothing but a spot of credit card spending!

After this generous introductory period has ended, cashback will be earned like this:

American Express Platinum cashback rates

Aggregate amount of spending	Cashback rate
Up to £3,500	0.5%
£3,501 to £7,500	1%
£7,501+	1.25%

There’s no limit on the amount of cashback you could earn. You can spend to your heart’s content, safe in the knowledge that you’re getting a little bit back. You'll receive your cashback once a year on the anniversary of opening your card.

But how much extra might you get? Let's say you spend £1,000 every month using the card, you would earn a grand total of £203.75 in cashback.

You should be aware, however, that you’ll need to spend at least £3,000 during the year to qualify for these cashback rates. But this should be pretty easy to do. After all, to make the most of the cashback, it’s best to put as much of your day-to-day spending and large purchases on the card as possible.

Fancy making some free money just by being clever with your credit card? These are the plastic friends you need!

Extra rewards

There’s no question that the cashback offer from American Express is the most generous on the market right now. But there’s even better news in the form of extra rewards.

In addition to this great cashback scheme, American Express has just added a 0% on purchases deal into the mix, which enables you to enjoy ?six months interest-free spending on the card too. This could come in handy if you have a large purchase to make. Just remember, you must pay the card off in full before the introductory period ends, or you’ll be hit with heavy interest charges once the standard APR kicks in.

Given that the standard rate is a whopping 19.9% (variable) this should be avoided at all costs. After all, it could quickly wipe out any cashback you may have earned.

Boost the rewards even more

I know many of you are keen to make your money work as hard for you as it can. With that in mind, you may be wondering whether stoozing using the American Express card might be worth your while.

If you’re not too familiar with it, you should read The ultimate guide to stoozing first. Basically, stoozing involves juggling money between a credit card with a 0% deal and a savings account to make a little extra cash. Stoozing can work with both 0% balance transfer cards and 0% purchases cards.

So, using the American Express Platinum Cashback Credit Card as an example, this is how it works:

You put all your spending on the card, but you only pay back the minimum repayment. In this case, that means paying 10% of your outstanding balance. So, instead of paying the card off in full every month, you put an amount - which is equivalent to the balance left on the card - into a ?savings account.

You do this every month until the interest-free period ends in six month’s time. At this point, you use the balance held in the savings account to clear the balance left on your American Express card. But, you get to keep all the interest you have earned on those savings during the introductory 0% period.

Just remember, you should only stooze if you can be disciplined. If you don’t stock up your savings account, you’ll do nothing except amass a large debt.

There's a great new credit card which allows you to earn extra cash when you're doing your Christmas shopping.

Is it worth it?

So, you can see, stoozing is just a way of earning a bit of extra cash, but is it worth it using the American Express card? After all, the interest-free period is quite short relative to the market-leaders, and savings rates have fallen far from where they were a couple of years ago.

The table below shows the additional rewards you could earn using the American Express card to stooze.

I’ve assumed that you’ll spend £1,000 on the card every month for the next six months. After paying the 10% minimum repayment, the amount of cash you would have used to clear your card balance in full is moved over to a market-leading savings account. In this example, I’ve used the market-leading easy access account - the AA Internet Extra Account - which pays a rate of 2.8%.

Before we look at the figures, I’ll just remind you that you have to meet the minimum 10% repayment or else you’ll incur extra charges. Also, just before the six months period is up, you must pay the card balance off in full using the balance from your savings account. This will ensure you escape that huge standard APR.

Stoozing with the American Express card

Month	Amount spent on the American Express card	Minimum monthly repayment (10% of the outstanding balance)	Outstanding balance on your American Express card	Balance in your savings account (with a rate of 2.80%)	Interest earned on your savings*
1	£1,000	£100	£900	£900	£2.07
2	£1,000	£190	£1,710	£1,710	£3.94
3	£1,000	£271	£2,439	£2,439	£5.62
4	£1,000	£343.90	£3,095.10	£3,095.10	£7.20
5	£1,000	£409.51	£3,685.59	£3,685.59	£8.49
6	£1,000	£468.56	£4,217.03	£4,217.03	£9.72
Total interest earned					£37.04

*Assumes the savings account doesn’t pay compound interest.

By juggling your money in this way over the next six months, you’ll earn an extra £37.04 in interest - but don’t forget, tax may need to be deducted from this amount depending on your own tax rate.

I must admit, I think this is rather a lot of effort to go to for a comparatively low return. After all, it entails moving money into your savings account every time you make a purchase on your American Express card. That said, you may feel differently.

On top of this, you’ll also earn a fantastic £115 in cashback. You’ll have spent £3,000 in the first three months, which entitles you to the maximum cashback of £100 based on the special 5% introductory rate. After this, you’ll get a cashback at a rate of 0.5% on the next £3,000 you spend over the final three months.

And, of course, you could carry on spending more on the card to build up even more cashback throughout the rest of the year.

A word of warning?

Unfortunately, American Express isn't accepted everywhere. And as I mentioned earlier, the rates of cashback are tiered - you will earn just 0.5% cashback after the first three months if you spend £3,500 or less. For this reason, you may prefer the Egg Money Mastercard. This card pays 1% cashback on all purchases, regardless of how much you spend. However, be aware there is a £1 monthly fee associated with this card, and if you spend more than £7,500 on your card over the year, you're better off with Amex, as you'll earn a higher rate of cashback.

Compare credit cards and savings accounts at lovemoney.com

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