Maximise your Avios, air miles and hotel points

Amex cuts the rewards on its cashback cards – a sign of things to come?

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

American Express relaunched its two Platinum cashback cards yesterday with reduced rewards.

Whilst this is not strictly relevant for Head for Points, because the cards do not give miles or points, it is an interesting indication of how Amex is thinking.  This is because these cards are immune to the EU cap on interchange fees.  Whilst there is some dispute over whether the BA card is immune – as it is co-branded – the cashback cards are definitely OK.

Despite this, Amex is still trimming the benefits.  Why is it doing this?  Possible options are:

to make up for losses on other cards which are subject to the interchange fee cap, or

because the card market is now less competitive with MasterCard and Visa issuers restricted in what they can pay out in rewards once existing contracts expire

That said, the cards are still pretty good as I will outline below.

Before going on I am, as usual, obliged to tell you that the Platinum Cashback credit card has a representative APR of 28.2% variable, including the £25 fee, based on a notional £1,200 credit limit.  The interest rate on purchases is 22.9% variable.  The Platinum Cashback Everyday credit card has a representative APR of 22.9%.

What is the difference between the Amex Platinum Cashback and Cashback Everyday cards?

Basically, the annual fee and the cashback tiers.  The Platinum Cashback card comes with a £25 annual fee.  The Platinum Cashback Everyday card does not.

Following the changes yesterday, the £25 Platinum Cashback card pays you cashback at the following rates:

  • 5% cashback on all your spending in the first three months, up to £2,500 of purchases
  • 1% back if you spend under £10,000 from month 4 to month 12 (and annually thereafter)
  • 1.25% back on your spend over £10,000 from month 4 to month 12 (and annually thereafter)

This is a drop on the old structure which was:

  • 5% cashback on all your spending in the first three months, up to £2,500 of purchases
  • 2.5% cashback, uncapped, in your ‘card anniversary month’ if you spent over £10,001 in the previous year
  • 1.25% on all spending

Ignoring the sign-up bonus, someone spending £800 per month on the card would now get an annual return of £71 (1% of £9600 – £25 card fee) compared with £95 (1.25% of £9600 – £25 card fee).

The free Platinum Cashback Everyday card has a different tiered system:

  • 5% cashback on all your spending in the first three months, up to £2,000 of purchases

After the first three months, you will earn:

  • 0.5% on the first £5,000 of spend (but you get nothing if you spend under £3,000)
  • 1% back on your spend over £5,000

The old structure looked like this:

  • 5% cashback on all your spending in the first three months, up to £2,000 of purchases

After the first three months, you would earn:

  • 0.5% on the first £3,500 of spend (but you get nothing if you spend under £3,000)
  • 1% back on your spend between £3,500 and £7,500
  • 1.25% back on your spend above £7,500

Cashback is paid in a lump sum at the end of each card year.

Ignoring the sign-up bonus, someone spending £800 per month on the Platinum Cashback Everyday card would see their return drop from £83.75 to £71.

An unintended consequence …..

I’m not sure that American Express has done their maths properly here.

Under the old reward structure, and ignoring the opening bonus which is only available in the first year, your break-even point for the £25 annual Platinum Cashback card was £3,350.

Anyone spending more than £3,350 would have been better off, even after paying the £25 fee, with Platinum Cashback rather than the free Platinum Cashback Everyday.

However, that has now changed.

The break-even point is now £10,000.  For everyone except the highest spenders, you are now better off with the free Platinum Cashback Everyday card.

For example:

spend £9,000 per year and you will receive £65 on the free Platinum Cashback Everyday and the same £65 on the Platinum Cashback card, adjusting for the fee

spend £11,000 per year and you will receive £85 on the free Platinum Cashback Everyday and £87.50 on the Platinum Cashback card, adjusting for the fee

I can’t believe that Amex intended this to happen.

Under the old structure, the break-even point was £3,350.  Why?  Well, £3,350 of spend on the Cashback card earned you (at 1.25%) £41.88 back.  £3,350 on the Cashback Everyday card got you £16.75 back.    After £3,350 of spend, your £25 fee had already been covered by the additional cashback earned.

For the majority of people, it now makes more sense to have the free Platinum Cashback Everyday card.

What is the sign-up bonus?

Both cards have the usual generous American Express sign-up bonuses:

The Amex Platinum Cashback card pays you 5% back on your spending in the first three months, to a maximum spend of £2,500 (so capped at £125 back).

The Amex Platinum Cashback Everyday card pays you 5% back on your spending in the first three months, to a maximum spend of £2,000 (so capped at £100 back).

However, unless you are planning on spending over £10,000 between month 4 and month 12, I would not necessarily be tempted by the extra £25 as the free card is better long term.

What more should I know?

You do not receive your cashback month by month.  Instead, it is paid onto your Amex statement at the end of each card year.

However, this does not mean that it is more difficult to cancel the Cashback card with the £25 fee.  This is because Amex will refund your fee, pro-rata, when you cancel.  If you feel like dumping the card at any point, wait until the start of your next card year for the cashback from the previous year to arrive.  You can then cancel, and should get back at least £23 of your £25 fee as a pro-rata refund.  If you have not used the card since your renewal date, you should get the full fee back.

American Express no longer has a minimum income requirement for its cards.

That is a far longer analysis than I planned to write!  However, the original point of the article – that Amex appears happy to cut benefits on cards which are not subject to the interchange fee cap – is worth noting.


Want to earn more points from credit cards? – August 2021 update

If you are looking to apply for a new credit or charge card, here are our August 2021 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the other top current deals:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Virgin Rewards Plus credit card

Virgin Atlantic Reward+ Mastercard

15,000 points bonus and the most generous non-Amex for day to day spending Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

Earn both Avios and BA On Business points with your business spending Read our full review

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending:

Barclaycard Select Cashback Credit Card

1% cashback and no annual fee Read our full review

Comments (38)

  • Stu R says:

    Apologies for going immediately OT, but has anyone has their BA Amex PP letter about the annual fee increasing from £150 to £195, and if so, what’s the effective date of the change on your letter please?

    I ask as I’m curious as to whether the fact my increase being in line with my statement date is deliberate or coincidental, as if it’s coincidental, I’ll be twerking my statement date by a couple of days to avoid they increase until next year!

    • Stu R says:

      * tweaking * …. autocorrect at it’s best!!

    • Andrew says:

      Hi. I had mine and the fee increase was from my card anniversary date (I.e. the date my annual fee would become due as usual). In my case this is 02 May but I’ll not get the statement which includes the fee until the end of May. Hope this helps

      • Danksy says:

        I had mine through and switched to the free version… I’ve got 2 x BA vouchers to use still and seem to be acquiring avios faster than I can spend them due to the cheap flights from Qatar etc.

  • David says:

    Do these changes also apply to existing users?

    • Rob says:

      With the BA changes, they left it a few months and then hit existing cardholders – although only from your next renewal.

  • Graeme says:

    the platinum everyday cash back one does, I have one….

  • Rob says:

    Some people last week mentioned this. Must be widely available if 140,000 slots but not on our 4 family cards …..

  • Nick says:

    Worth noting that the basic cash back card comes with 21 months interest free, if you apply through (I think) MSE.

    • Nick says:

      Although I don’t think there is an intro period 5% rate if applied for like that.

  • Adam says:

    Eugh, a sign of things to come elsewhere with AMEX I’m sure. Rather than attract hoards of business when MBNA/Lloyds etc inevitably cut their returns for customers, Amex look like they want to play the race to the bottom.

    The £10K break even shows someone’s not thinking..

  • Dave says:

    Yep, the £25 fee card also has the statement credit offers – I have one!

  • Pol says:

    OT. Currently have Amex Plat rewards. Wanted to refer husband for gold but only seems to allow to refer for plat. Any way around this?

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.