American Express now offers two credit cards that both give you a cracking 5% return on your spending.
American Express has launched a new fee-free cashback credit card, meaning it now offers two cards that will pay you 5% cashback in the first three months you have the card.
But which one should you go for? Let’s take a look at what each of them have to offer.
Platinum Cashback Everyday Credit Card
First up is the Platinum Cashback Everyday Credit Card which offers 5% cashback on the first £2,000 you spend in the first three months. The amount you can earn in this time is capped at £100.
Once the introductory period has finished, the cashback offer is tiered. You can get 0.5% on your annual spending up to £3,500, 1% between £3,500 and £7,500, and then 1.25% on your spending over £7,500.
The great news is you can get the card with no annual fee, which means that you make a profit the moment you start spending. But that’s only as long as you clear your balance every month. Otherwise interest charges will start to pile up and they'll wipe out any gains you've made in cashback.
The Everyday card comes with an APR of 19.9% so you won’t want to be caught out!
Platinum Cashback Credit Card
Next is the Platinum Cashback Credit Card. This card also offers 5% cashback for the first three months you have the card. However, the cap on cashback at that rate is a bit higher at £125.
Unlike the Everyday card you get paid a flat fee of 1.25% on purchases once this introductory offer ends. So you will be able to keep track of what you are earning very easily.
To top it off, your cashback rate will be bumped up to 2.5% for one month each year - that's on the anniversary of when you took out the card. However you do need to spend £10,000 in the previous year to qualify for the special 'anniversary' 2.5% rate.
[SPOTLIGHT]But to get all this you will need to pay a £25 annual fee. Paying a fee in order to earn cashback can feel counter-intuitive but the flat 1.25% rate means you could end up making more money with the main cashback card rather than the fee-free Everyday card.
One problem
Personally I think these cards sound great. But then there’s the American Express problem. Sadly, Amex cards aren’t accepted everywhere. More places do now than ever before, but you will find some retailers just won’t accept them. So you might need to use another payment method which won’t help you earn any further cashback – a wasted opportunity.
But not to worry, there are plenty of rival cashback credit cards out there if you think the Amex cards won't match your spending habits.
Other cashback contenders
Pays 6% cashback in the first three months capped at £120. After the introductory rate you can earn 2% on your five most expensive monthly purchases and 0.5% on anything else. But the card comes with an annual fee of £24.
Pays a tiered system of interest depending on where you spend. Earn 1% at supermarkets, 2% at department stores, 3% at petrol stations and 3% on National Rail or TfL travel. Only the rail and TfL travel spend is capped at £300 a month. This card also comes with an annual fee of £24 but you can avoid it for a year by opening a 123 Current Account.
If you have a bad or non-existent credit history this card could really help you out and earn you some cashback along the way. The aqua card offers a flat rate of 3% cashback on anything you buy all year. It comes with no annual fee and no foreign exchange fees but does have a sky-high APR of 34.9%.
Sainsbury’s Bank Cashback Credit Card
If you shop at Sainsbury’s, its cashback credit card could suit you. It allows you to earn 5% cashback on your Sainsbury’s shopping for the first three months capped at £150. You also get £5 cashback each month you spend £250 at Sainsbury’s and £250 elsewhere. But if you don't shop in Sainsbury's, this card is unlikely to deliver the most cashback on your spending.
Here is another card which offers a cracking 5% cashback. The rate applies for the first three months capped at £100 and tiered rates apply thereafter up to 1.25%. You get 0.5% on purchases up to £5,999.99, 1% cashback if you spend £6,000 to £9,999.99 and then 1.25% cashback if you spend above £10,000.
Best of all, there is no annual fee.
Making a choice
All of these cards are quite varied. Working out the best one for you will depend on what your spending habits are like and where you shop. That way you can get the most from spending on your credit card.
More on credit cards:
Why cash and credit cards don't mix!
The best cashback credit cards
The best reward credit cards
Barclaycard launches 6% cashback card
Barclaycard launches Freedom Rewards credit card