American Express launched a new cash back credit card on Thursday morning — the American Express Cash Magnet Card. The Cash Magnet is now available for applications and comes with a hefty welcome bonus for a no-annual fee card, but a somewhat uncompetitive earning rate.
Here are the key details of the Amex Cash Magnet:
- 1.5% cash back on all purchases, with no caps or limits
- No annual fee
- 0% intro APR on purchases and balance transfers for first 15 months, then a variable APR of 14.49% to 25.49%
The card currently offers a $300 tiered welcome bonus, where you can earn $150 after spending $1,000 in the first three months and another $150 after spending an additional $6,500 in the first 12 months of cardmembership. That’s a total of $7,500 in spend for the $300 bonus. The information for the American Express Cash Magnet Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Cash back earned with the card can be redeemed for statement credits, gift cards or merchandise. Along with the cash back, the Cash Magnet card comes with a few other benefits, including car rental insurance, travel accident insurance, ShopRunner membership and purchase protection. This card will also participate in the popular Amex Offers program.
Amex is also implementing its “Pay It Plan It” program on this card, which is a way to pay off individual items that cost more $100 over a period of three to 24 months without interest but with a fixed monthly fee. The card also charges a 2.7% foreign transaction fee, so if you’re traveling overseas a lot, this would be a card to leave at home.
Since the Cash Magnet is a brand new card, no one will be ineligible for this welcome bonus under Amex’s one-bonus-per-lifetime rules. But the issuer has recently been cracking down on those who repeatedly open and close its cards, which means it’s possible you could be denied the bonus on those grounds. On Wednesday, Amex launched a welcome bonus qualification tool that reports your eligibility for a bonus before you apply for a card and receive a hard pull on your credit, so you can find out if you’re on Amex’s naughty or nice list before completing your application.
Rewards earning with the Cash Magnet isn’t anything special, particularly when you compare it to other no-annual fee cash back options. Although some of its benefits have been reduced, the Citi Double Cash Card beats the Cash Magnet card on the earning side, since it earns 2% cash back on all purchases, 1% when you make a purchase and another 1% when you pay for it.
While at first glance the Chase Freedom Unlimited would seem quite similar to the Cash Magnet since they both earn 1.5% cash back on all purchases and don’t charge an annual fee, the Freedom Unlimited has a major advantage. That’s because if you have a Chase Sapphire Preferred Card or Chase Sapphire Reserve, cash back earned with the Freedom Unlimited can be converted to valuable Ultimate Rewards points and transferred to Chase’s airline and hotel partners. With the Cash Magnet, you’ll be barred from earning Amex Membership Rewards, even if you have another MR-earning card.
If you’re willing to pay an annual fee, the Capital One Venture Rewards Credit Card and the Bank of America Premium Rewards Credit Card are both worth looking at. The Venture essentially earns 2 miles per dollar on all spend which can be redeemed toward travel purchases, while Premium Rewards can earn up to 3.5% back on travel and dining and 2.625% back on all other purchases. Neither of the cards charge foreign transaction fees.
The welcome bonus on the Amex Cash Magnet is higher than average for a no-annual fee card, though it requires some significant spend to earn the entire $300. But the earning rate on this card is somewhat disappointing, since its direct competitors offer either a higher rate or flexibility in redeeming rewards. So if you’re interested in earning either cash back or travel rewards, it probably make sense to look at other options.
Featured image courtesy of American Express.