American Express Launches The Cash Magnet Cash Back Card….But Is It Any Good?


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American Express already offers the Blue Cash Everyday Card and the Blue Cash Preferred Card to compete in the cash back arena so I was surprised to see Amex launch the Cash Magnet Card last week. Still, a new card is a new card and as there’s no knowing what Amex may have included in its new product I’ve taken a closer look at it too see what it offers.

American Express Cash Magnet Card

Welcome Offer

$150 after you spend $1,000 or more in purchases on the card in the first 3 months of card membership + an additional $150 after you spend an additional $6,500 in purchases within the first 12 months of card membership.

Headline Features

  • No annual fee
  • Unlimited 1.5% cash back on all purchases.

The welcome offers are received in the form of statement credits and the cash earned from using the card is received in the form of Reward Dollars that can be redeemed as a statement credit.

Thoughts

The only way I know to determine if a credit card is any good or not is to compare it against other similar cards that are also available….so here goes:

Within Amex’s portfolio the obvious comparison to make is with the Blue Cash Everyday card. Both cards come with no annual fee but, where the Cash Magnet card offers 1.5% on all purchases, the Blue Cash Everyday card offers 3% back on groceries (up to $6,000 in purchases), 2% back at US gas stations and select department stores and 1% back on all other purchases.

Unless you make a lot of purchases outside of gas stations and grocery stores that aren’t covered by other credit cards in your portfolio I can’t see why you would choose the Cash Magnet Card over the Blue Cash Everyday card.

if we look outside of the American Express offerings two logical comparisons to make are with the Chase Freedom Unlimited card and the Citi Double Cash Card….and the Cash Magnet doesn’t come out looking too good here either.

The Chase Freedom Unlimited card comes with no annual fee and also offers 1.5% cash back on all purchases….but if you hold one of the Chase Sapphire cards it becomes a lot more powerful.

If you have both the Chase Freedom Unlimited and a Chase Sapphire Reserve/Preferred card the cash back from the Freedom card can be converted into Ultimate Reward points.

1.5% cash back = 1.5 Ultimate Rewards points and, as I value Ultimate Rewards points conservatively at around 1.5 cents each, that makes the cash back from the freedom card worth at least 2.25 cents/dollar spent (or 2.25%) – that’s noticeably better than what the Cash Magnet Card offers.

The Citi Double Cash card is a very simple card no annual fee card and is one that doesn’t get as much recognition as it deserves – I really like this card.

It’s simple because there’s nothing to difficult to understand about how the card works – it just offers cash back – and I really like it because it offers 2% cash back on all purchases ( 1% when you buy & 1% when you pay your bill).

Both the Chase Freedom Unlimited and Citi Double Cash cards don’t charge annual fees and can be more rewarding than the new American Express Cash Magnet card – I would choose either of these over Amex’s latest offering.

Bottom Line

I’m not sure what Amex is thinking with the new Cash Magnet card because there appear to be better alternatives readily available elsewhere (and within Amex’s own portfolio too).

Can anyone see any benefit to getting the Cash Magnet Card that I’ve missed? I’m struggling to think of anyone who would benefit from getting this card but perhaps I’m missing something.