Amex cuts the payout on its Platinum Cashback credit cards

American Express has cut the cashback rate on its two Platinum cashback credit cards.

The new rate comes in today for new applications. If you currently hold the Platinum Cashback or Platinum Cashback Everyday card, the new rates will come into effect from 4th August.

Changes are also being made to the invite-only Vitality American Express, although we are not covering that. They will match the new rates on Platinum Cashback Everyday. Details are here.

There are two different American Express Platinum Cashback credit cards – Platinum Cashback and Platinum Cashback Everyday.

Here is the required interest rate information:

Platinum Cashback has a £25 annual fee but has a higher cashback rate than the Everyday card, which is free.

What are the new American Express cashback rates?

Here are the new cashback rates:

Platinum Cashback

• PREVIOUS: 1% cashback on spending up to £10000 per year, 1.25% cashback beyond this

• NEW: 0.75% cashback on spending up to £10000 per year, 1.25% cashback beyond this

Platinum Cashback Everyday

• PREVIOUS: 0.5% cashback on spending up to £5000 per year, 1% cashback beyond this

• NEW: 0.5% cashback on spending up to £10000 per year, 1% cashback beyond this

Are the sign-up bonuses changing?

No.

New cardholders who qualify for a sign-up bonus will still receive a higher cashback rate of 5% on their spending for the first 90 days.

This is capped at £125 for the ‘annual fee’ Platinum Cashback card and £100 for the free Platinum Cashback Everyday card.

Do these cuts change our view of which card is best?

Oddly enough, no.

The ‘break-even’ point remains at £10,000. Put another way, if you spend more than £10,000 per year, you should pay the £25 annual fee for Platinum Cashback.

If you spend less than £10,000 per year, it isn’t worth it. Stick with the free Platinum Cashback Everyday card.

Here are three examples:

• £5,000 spend – Platinum Cashback earns £12.50 net of fee, Platinum Cashback Everyday earns £25

• £10,000 spend – Platinum Cashback earns £50 net of fee, Platinum Cashback Everday earns £50

• £20,000 spend – Platinum Cashback earns £175 net of fee, Platinum Cashback Everyday earns £150

Are these still good cards, despite the cut in the cashback rates?

Yes.

Spend £10,000 on either card and you will receive exactly £50 (0.5%) back.

Spend more and you receive more.

If you push your annual spending up to £20,000, your return increases to £175 (net of the £25 fee) on Platinum Cashback, which is 0.875%. On the free Platinum Cashback Everyday, £20,000 of spending gets you £150 (0.75%) cashback.

Low spenders have less to get excited about.

Spend £5,000 on the Platinum Cashback card and your return, netting off the £25 fee, is only £12.50 (0.25%). On the free Platinum Cashback Everyday card, you would have received £25 (0.5%).

What is the best Visa or Mastercard to pair with Amex Platinum Cashback?

If you want a cashback Visa or Mastercard to use alongside your Platinum Cashback card, you are going to struggle to get a good return.

The typical return on a free cashback or store rewards card (eg Amazon, Marks & Spencer, John Lewis, Barclays Rewards) is now around 0.2% to 0.25%. The Santander All In One card pays 0.5% cashback but has a £3 monthly fee.

The free Virgin Atlantic Reward Mastercard – the most generous Visa or Mastercard on the market – is up there with the American Express cards, albeit you receive Virgin Points and not cash.

This card is free and earns 0.75 Virgin Points per £1 spent.

If you thought you could get 1p per Virgin Point by redeeming for premium cabin flights (and we believe you can) your implied return is 0.75%. Virgin Points are not as flexible as cash, of course.

How does Platinum Cashback compare with the Nectar or free British Airways Amex cards?

We’ll look at this topic again later in the week.

The Platinum Cashback cuts simply reiterate the position of the free British Airways American Express as the best pseudo-cashback credit card in Britain. This assumes that you convert your Avios from the credit card to Nectar points and spend them in Sainsbury’s, Argos or eBay.

As a reminder, the conversion rate from Avios to Nectar points is 1 : 1.6 and a Nectar point is worth 0.5p in most cases.

You would now need to spend £17,000 before the £25 Platinum Cashback card outperforms the 0.8% pseudo-cashback that the free BA Amex pays.

The free Platinum Cashback Everyday card will never outperform the free BA Amex, irrespective of your spending.

Using the free BA Amex as a pseudo-cashback card even has potential upside, because there are occasional promotions which make Nectar points worth more than the usual 0.5p.

More on this later in the week though ….

Remember that, if you currently have a Platinum Cashback credit card, these changes do not apply immediately. They kick in from 4th August.

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Want to earn more points from credit cards? – May 2023 update

If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

SPECIAL OFFER: Until 30th May, the sign-up bonus on the Barclaycard Avios Plus Mastercard is doubled to a crazy 50,000 Avios! Apply here.

SPECIAL OFFER: Until 30th May, the sign-up bonus on the free Barclaycard Avios Mastercard is doubled to 10,000 Avios. Apply here.

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.

SPECIAL OFFER: Until 13th June, the sign-up bonus on The Platinum Card is doubled to 60,000 Membership Rewards points – and you get £200 to spend at Amex Travel too! Apply here.

SPECIAL OFFER: Until 13th June, the sign-up bonus on the Virgin Atlantic Reward+ card is doubled to 30,000 Virgin Points. Apply here.

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:

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.