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How the Amex Cashback Credit Card works, its benefits and fees
With more Young Aussies becoming more financially savvy, there is a need for the old financial institutions to innovate to get new customers. American Express commissioned a survey to help them understand the younger financial consumer, which led them to offer the AMEX Cashback Credit Card.
The survey results found an increasing preference for cashback over traditional credit card reward points among Gen Z. It also indicated that a low monthly fee would be more attractive than an annual one.
This information showed that offering the cashback rewards plus American Express card is what these young consumers were after. American Express launched one of the first credit cards in the Australian market that lets customers earn cash back on eligible spending. Typical cashback offers found in the credit card market are offers of cash upfront when you sign up with the card, but this one was different.
How does the AMEX Cashback Credit Card work?
The American Express Cashback Credit Card allows you to earn cash back on eligible purchases without any cap on the amount of cashback. You’ll receive 1 per cent cashback for every $1 spent. In the first few months, you may be eligible for an additional cashback of up to 5 per cent. However, this is capped at $200. Your cashback is halved when you use the AMEX Cashback Credit Card for paying the ATO.
There’s no annual fee associated with the card. Instead, you pay $10 a month to use the card.
The main benefit the AMEX Cashback Credit Card offers is the competitive cashback rate of one percent cashback for every $1 spent on the card. So, if you spend $100, you'll receive $1 cashback on your account.
This rate is almost as good as any supermarket credit card, but you’re not as limited to where you can shop to access the cashback with the AMEX Cashback Credit Card. The one per cent cashback is reduced to half when you use the card to pay government bodies, such as the ATO or the Australia Post.
You may also get a bonus cashback when you first sign up for the card, where you can earn up to five per cent additional cashback in the first three months. However, the maximum bonus cashback you can earn is limited to $200, approximately equal to purchases worth $4,000.
Other benefits include a free BINGE basic subscription valued at $10 per month and other AMEX benefits. There are attractive insurance inclusions, such as a smartphone screen insurance covering your smartphone screen repairs for up to $500 per repair. You also get a 90 days purchase protection with the AMEX Cashback Credit Card covering you for up to $2,500 per claim if an eligible item is stolen or damaged within three months.
The AMEX Cashback Credit Card fees, payments and interest rates
You typically do not pay an annual fee with the AMEX Cashback Credit Card. Instead, you pay a monthly fee of $10, which amounts to $120 annually. A simple calculation, using the cashaback benefits, will tell you that you need to spend $12,000 over a year to break even on this cost. This excludes any payments to government bodies that earn cashback at a lower rate.
One of the biggest drawbacks of this card is the higher than average purchase rate. AMEX does provide you with 55 interest-free days so that you have a window to pay off your credit card balance in full without incurring interest. Still, you could incur hefty interest charges at the purchase rate depending on the balance once the interest-free period is over.
If you’re planning a big purchase on your card, and you’re trying to avoid paying interest, you may want to consider the Plan It feature to manage your expenses. Plan It allows you to make your repayments in instalments and spread them out over a few months. This offers you a more flexible way to manage your debt. Read the terms and details of Plan It on the AMEX site.
Who can apply for an American Express Cashback Credit Card?
If you’re an Australian citizen or permanent resident aged 18 or over, you can apply for the American Express Cashback Credit Card. To be eligible, you must earn over $40,000 per year and not have any bad debt on your credit file.
You can apply for the AMEX Cashback Credit Card online in a few simple steps. As long as you meet the eligibility requirements, you should hear back on your application quickly and receive your new card in the mail within weeks.
Overall, the cashback credit card by AMEX could be worth considering. It offers an affordable monthly fee structure and the benefits AMEX cards are well known for. The card allows you to use your money twice to some extent by crediting your account with a one per cent cashback on every spend. However, ensure you read the full terms and conditions before deciding if the card is right for you.
You must decide whether the AMEX Cashback Credit Card suits your spending needs and financial situation. Or if instead, you want to compare other cashback credit cards to see if you could land a better deal.
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Product database updated 09 May, 2024
