There's a seriously good new credit card that allows you to earn some extra cash when you're doing your shopping.
American Express has offered one of the market-leading cashback credit cards for a very long time. So it was pretty exciting news when the company launched a brand new card for shoppers earlier this month.
John Fitzsimons looks at an exciting new credit card which offers terrific rewards on your everyday spending.
The original American Express Platinum Express Cashback Card has been a hugely popular choice. It offers cashback worth between 0.5% and 1.25% of your spend with a great introductory deal of 5% on purchases made in the first three months (up to a maximum of £100).
This card works out to be a good choice for big spenders or those who are planning to make a big purchase in the first three months when the massive 5% rate applies.
But can the new Express Rewards Credit Card from American Express live up to the same reputation? You can check out our review in this video, Earn £200+ while you shop.
Cashback versus rewards
Generally-speaking I prefer cashback credit cards to rewards credit cards. That's because I think cashback is more flexible. Normally you'll receive a rebate on your credit card bill which reduces the amount you owe, freeing up more of your cash to spend wherever you like.
But with rewards cards, you'll usually earn loyalty points which can only be redeemed at certain outlets or exchanged for specific rewards. For example, with the American Express British Airways Card you'll earn airmiles for every £1 you spend. Meanwhile with the MBNA Rewards Card, points can be used for travel, entertainment, shopping and wine, or can even be exchanged for cash. You'll earn 1 reward point per £1 spent.
How good a reward card is depends on the generosity of the loyalty scheme, of course. A 1-for-1 scheme is pretty common - that is, 1 point earned for every £1 spent. But what's even more important is that the rewards on offer are genuinely useful to you.
What rewards will I earn?
With the Express Rewards Credit Card you'll earn reward points on your spending which are converted into vouchers or gifts cards rather than cash. The vouchers you'll receive can be spent - usually in £25 increments - at a range of popular retailers online and in store.
How do I earn rewards?
Points will be awarded like this:
- 3 points for almost every £1 spent at major UK supermarkets*
- 2 points for almost every £1 spent at major UK department stores
- 1 point for almost every £1 spent elsewhere
*Spend over £500 a month in supermarkets will qualify for 1 point per £1. 1 point per £1 is earned on any petrol spending.
Where can I get rewards?
You can get rewards at a wide range of high street and online retailers, for example:
- Amazon
- Boots
- Comet
- Harrods
- Homebase
- House of Fraser
- HMV
- iTunes
- Marks & Spencer
- Molten Brown
- Net-a-porter
- Tiffany & Co
- Waterstones
If this list includes shops where you buy items regularly, the card good be a choice for you.
How much are the rewards worth?
Once you have earned 5,000 points you can exchange them for a £25 gift voucher. So you'll need to put most of your day-to-day spending on the card to accumulate enough points to reap the benefits. In the first year 6,000 bonus points - worth £30 - will be credited if you spend £500 on the card in the first three months. f
American Express calculates that the average family spends around £18,000 a year on everyday expenditure. If all that was paid for using the card, you would earn over £200 worth of rewards in the first year which is pretty impressive in return for doing nothing but a spot of shopping. But, of course, your own spending pattern could be completely different to this.
If you spent that same £18,000 on the American Express Platinum Express Cashback Card instead, you could earn around £279 of cashback in year one, making it more generous than the rewards card. But it would be a different story in year two once the high introductory cashback rate has disappeared. (You may also want to consider the Egg Money Mastercard, which pays a flat rate 1% on all purchases and is more widely accepted than Amex. Find out more about this card here.)
But overall, I think the new Express Rewards Card is still a pretty good addition to the card market and am welcoming its arrival in the market.
I'll just finish by saying you'll also be offered a special interest-free deal on your spending for the first six months. This can help you to spread the cost of your festive purchases, but I would urge caution here. If you're going to take advantage of the 0% period, please make sure your spending is completely paid off before it expires. Otherwise the far higher typical APR of 17.9% will kick and totally destroy the value of any rewards you have earned.
If you're having trouble clearing your bill, try joining our Pay off credit card debts goal to kick your borrowing into touch for good. Also check out our Get out of debt video where we investigate the best places to go for free advice.
Compare cashback credit cards at lovemoney.com or apply for the Express Rewards Credit Card