On Tuesday, I told you about some major changes to the little-known American Express Rewards Credit Card (ARCC). Two of the three versions of the card have been closed to new applicants with immediate effect.
My full article on the Amex Rewards Credit Card changes is here. You can apply here.
What is the American Express Rewards Credit Card?
ARCC is a standard Amex-branded credit card. It has no annual fee and no substantial benefits, except for the ability to collect Membership Rewards points at 1 point per £1 spent.
There WERE three versions of the card available:
a low interest rate version
a ‘0% interest on purchases’ version, and
a ‘standard’ version
You can probably guess which two versions have been closed down. Yes …. the one with the 9.9% interest rate and the one which offered 0% interest on purchases.
The one version which remains is the ‘standard’ one with a 5,000 Membership Rewards points bonus (click here). You need to spend £2,000 within three months to receive the bonus.
Here is legally required interest rate information:
American Express Rewards
Sign-up bonus and earnings rate:
- Get 5,000 Membership Rewards points when you spend £2,000 within 90 days
- Earn 1 Membership Rewards point per £1 spent
- Points transfer at 1:1 into Avios, Virgin and other airline schemes
- Your best choice if you want a ‘free for life’ card which earns Membership Rewards points
- A good choice if you want to close a Gold or Platinum card but keep your points intact
- Annual fee: Free
Representative 22.2% APR variable
You will receive 5,000 American Express Membership Rewards points as a sign-up bonus on the American Express Rewards card if you spend £2,000 within 90 days of signing up.
Membership Rewards points are hugely flexible. You can transfer them into Avios, Virgin Flying Club or other airlines (at 1:1) or into various hotels schemes, into Club Eurostar or use them for shopping vouchers.
To qualify for the bonus, you must NOT, currently or in the previous 24 months, have held any other personal American Express card.
You are OK if you had a supplementary card on someone else’s American Express account.
You are OK if, currently or in the previous 24 months, you have held a Business American Express card.
For clarity, you can still apply for the American Express Rewards card even if you do not qualify for the bonus. You may want to do this if you are thinking of swapping your Preferred Rewards Gold or Platinum card for a free alternative, and would prefer to keep your existing Membership Rewards points balance alive.
American Express Rewards is the only ‘free for life’ American Express card which lets you collect Membership Rewards points.
We do NOT recommend this card if you would also qualify for the sign-up bonus on American Express Preferred Rewards Gold. The Gold card is free for the first year, comes with two free airport lounge passes and has a higher sign-up bonus of 10,000 points.
The best reason to get American Express Rewards is if you are coming to the end of your free first year with American Express Preferred Rewards Gold, or no longer want to pay the fee on The Platinum Card, but want to keep your Membership Rewards points intact.
For many people, there is only good reason to get this card. If you currently have an Amex Gold or Platinum card and want to cancel it but do not want to cash in your Membership Rewards points, this card is your answer.
Apply for the one remaining variant of the American Express Rewards Credit Card. Once it is active, you can cancel your Gold charge or credit card or Platinum charge card safe in the knowledge that your Membership Rewards balance is safe.
The Amex Rewards Credit Card is more powerful than you think
The main reason people get this card is to protect their Membership Rewards points if they are cancelling Gold or Platinum. Rhys got one recently for that very reason.
However, when you look at the card, you realise something else. ARCC is fundamentally better than the free, and hugely popular, British Airways American Express credit card.
Let me explain why the ARCC card may be better for you than the free BA card.
Do you spend £20,000 per year on your free BA Amex card?
I have long argued that no-one should have the free BA Amex card if they intend to trigger the 2-4-1 voucher for spending £20,000.
The 241 voucher on the free BA Amex is only valid for one year, instead of two years for the BA Premium Plus voucher, which is a major issue if you want to book seats 355 days in advance!
The £10,000 of ‘extra’ spending required to trigger the voucher (£20,000 compared to £10,000 on the Premium Plus card) could be directed elsewhere, triggering sign-up bonuses on other cards
You earn an extra 0.5 Avios per £1 spent, which offsets much of the £195 annual fee on the Premium Plus card
(You need to call Amex to do this and you won’t get any bonus for doing so, but it is worth it. Your card year remains the same, and if you have already spent £10,000 this card year on the free card then your 2-4-1 companion voucher is triggered immediately.)
If you spend between £10,000 and £20,000 per year, so you don’t trigger a voucher at the moment but would with the Premium Plus card, it also logically makes sense to switch.
The only reason to have the free British Airways American Express card is if you spend LESS than £10,000 per year. You don’t spend enough to earn a 2-4-1 voucher but you appreciate the high Avios earning rate.
If you don’t spend £10,000 per year on the free BA Amex credit card, you are better off with the American Express Rewards Credit Card.
Why is the Amex Rewards Credit Card better than the free BA Amex card for low spenders?
Here’s the interesting bit:
The free British Airways American Express card earns 1 Avios per £1 spent
The free Amex Rewards Credit Card earns 1 Membership Rewards point per £1 spent. These transfer 1:1 into Avios points if that is what you choose to do.
What you get with the ARCC card is flexibility.
Yes, you can use your points for Avios. You can send them over to BA via the Amex website and they will arrive within 48 hours.
However, you have other options. Membership Rewards points can also be sent to Virgin Atlantic, Flying Blue, Emirates, Etihad, Delta among other airline partners. You can also send them to Hilton Honors (1:2), Marriott Bonvoy (2:3) and Radisson Rewards (1:3). You can convert them to Club Eurostar (15:1). You can even use them for shopping vouchers. You can see the airline partners here.
The Amex Rewards Credit Card gives you more choice. You can still take Avios if you want, and at the same 1 Avios per £1 earning rate. If you suddenly decide that you want hotel points, or that Virgin Atlantic miles make more sense, or even that you want to abandon Avios altogether, you can. Simply move your Amex points somewhere else instead.
With the free BA Amex card, your points are sitting in Avios from Day 1 and you can’t do anything else with them. If Avios devalues its rewards, if BA stops flying your preferred route, if reward availability suddenly gets a lot harder to find, if Reward Flight Saver fees jump up, if new surcharges get added ….. you’re stuck.
Swapping to the Amex Rewards Credit Card gives you more control over your points.
The only good reason NOT to drop your free BA Amex is that having the ARCC card means that you cannot get a sign-up bonus on an Amex Gold or Amex Platinum card in the future. You would have to cancel ARCC and wait 24 months.
There are good reasons for EVERY holder of the free British Airways American Express card to reconsider.
If you spend over £20,000 on the free BA Amex card to trigger the 241 voucher, I think you’re making a mistake as my old article here explains
If you spend between £10,000 and £20,000 on the free BA Amex card, you are making a huge mistake because you would be earning the 2-4-1 voucher if you upgraded to the Premium Plus version
If you spend under £10,000 on the free BA Amex, I believe that the Amex Rewards Credit Card offers a compelling alternative – just be careful that you don’t compromise your ability to get future sign-up bonuses
You can apply for the one remaining version of the American Express Rewards credit card here.
(Want to earn more miles and points from credit cards? Click here to visit our dedicated airline and hotel travel credit cards page or use the ‘Credit Cards Update’ link in the menu bar at the top of the page.)
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending financial products on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.