Amex Hopes New Cash Magnet Card Attracts Cardholders
American Express has launched a new credit card to its portfolio called Cash Magnet, its third cash rewards card. The card features a simple rewards structure and is geared toward younger cardholders who have busy lifestyles.
The Cash Magnet card offers unlimited 1.5 percent cash back on all eligible purchases, regardless of purchase category. Although it's billed as "cash back," Amex's term is "reward dollars." These are redeemable for statement credits whenever your reward dollar balance hits 25 or more, but according to the card's terms, conditions and disclosures, "You cannot use cash back to pay your Minimum Due."
Amex says it may offer other ways to use your cash back, such as offering the option to turn it into gift cards or use it to purchase other merchandise. It doesn't seem to offer the option of getting actual currency as a reward.
Cash Magnet also includes American Express' Pay It Plan It payment tool that gives cardholders a couple of different ways to manage their account and how to pay a statement balance.
The Pay It feature lets cardholders pay smaller amounts throughout the billing cycle via American Express' mobile app. Once a purchase under $100 shows up on a cardholder's billing statement, they can log into the app and pay it off. Technically, the amount paid goes to paying off the overall statement balance and not that specific purchase, according to how Amex applies payments, but that's the general sense of this program, which lets you use the card to buy things and pay them off right away to help you manage your account balance better. It seems to be like having a debit card, except you're earning rewards, which most debit cards don't offer, but you have to do an extra step to pay for the purchase if you're trying to avoid carrying a balance.
Plan It gives cardholders the ability to create a payment plan to pay back large purchases. This option is good on qualifying purchases that are $100 or more. The cardholder selects a purchase from their account statement and chooses the length of time they wish to pay it back. Then they pay a fixed amount on that purchase for the duration of their payment plan. Instead of interest, they'll play a fixed monthly fee each month the plan is active.
While it's not a completely free program, the plan fee could be less than the amount of interest you'd pay over that same amount of time, but it would be wise to do some comparison math to make sure that the flat-rate fee doesn't cost you more, particularly at the end of the payment plan when the interest rate on that amount could be lower.
One of the other aspects of Plan It is that cardholders can have up to ten different active payment plans on their account. Having multiple payment plans is ideal for times of the year when you might be making several large purchases or if you're going through a big life event such as moving, which can also require many large purchases. The card also features no annual fee and a zero percent APR for 15 months. After that, its APR for purchases is 14.74% to 25.74%, based on creditworthiness. Its cash advance APR is 26.99%.
As a special launch offer, for those who apply for the card by July 18, 2018, Amex is offering a $150 statement credit after spending $1,000 or more on the card within the first three months of membership. If you spend an additional $6,500 on the card within the first year, you'll get another $150 statement credit.
Why choose this card compared to Blue Cash Everyday, which also has no annual fee and the same interest rates? Its rewards structure is a lot simpler, and if you don't spend a lot of money at grocery stores, gas stations and department stores--the three categories that offer higher rewards than Cash Magnet--this card might actually net you more reward dollars. Having the option of a payment plan may also be a good way to budget and pay for large purchases without getting socked with a lot of interest fees.