There’s a new credit card available to U.S. consumers called the “American Express Cash Magnet Card,” which as the name implies can bring some much-needed cash back into your wallet.
Let’s see if it’s a good deal or just another run-of-the-mill offer in a very crowded space.
Amex Cash Magnet Offers 1.5% Cash Back
- The main draw is unlimited 1.5% cash back on all purchases
- Similar to the Chase Freedom Unlimited card
- The drawback is that it’s only cash back
- Unlike Chase which earns Ultimate Rewards
The new Cash Magnet Card offers unlimited 1.5% cash back on all purchases, something that is new to American Express but not unique to other credit card issuers.
As noted, there is a very similar existing offer in the Chase Freedom Unlimited card, which comes with 1.5% cash back on all purchases.
The big difference is the way you can redeem the cash back. With Amex, you can only use the cash back as a statement credit, or to buy gift cards and random merchandise.
With Chase, you earn Ultimate Rewards, which can then be used for all types of stuff, giving them a potentially much higher value, especially if you have a premium UR-earning credit card that allows transfers to frequent flyer programs.
Cash Magnet Comes with a Unique Sign-Up Bonus
- You earn $150 for spending $1,000 in the first 3 months
- And an additional $150 if you spend another $6,500 in the first year
- Comes as a $300 statement credit if you meet all requirements
- But requires $7,500 in spending in 12 months
If you’re able to muster $1,000 in spending during the first three months, you get a $150 cash bonus. If you go a step further and spend an additional $6,500 during the first 12 months, you get another $150.
That’s $300 combined, plus the $112.50 you’d earn for spending $7,500. All told, you’d be looking at $412.50 for spending $7,500 in the first year.
The cash back rate works out to 5.5%, which is pretty solid as credit card cash back rates go.
The publicly available Chase Freedom Unlimited offer is just $150 for spending $500 in the first three months, so this is the superior offer, despite having fewer redemption options with Amex.
Cash Magnet Offers 0% APR and No Annual Fee
- You also get 0% APR on purchases and balance transfers
- For a full 15 months
- 3% balance transfer fee and BT must be requested in first 60 days
- No annual fee
Another plus to this new credit card is the lack of an annual fee, along with promotional APR of 0% on purchases for 15 months.
Additionally, if you make a balance transfer request in the first 60 days, you can enjoy 0% APR for 15 months on any transfers as well.
One negative in the fee department is that foreign transactions are assessed a 2.7% fee, so it’s not a good credit card to use while traveling abroad.
Magnet Cash also offers purchase protection, and they specifically mention “dropped your phone” as a potential benefit.
It provides reimbursement up to $1,000 per occurrence, but acts as secondary coverage to any other insurance you might already have.
The card also comes with return protection for 90 days from the date of purchase if the merchant won’t take back at item you purchased. It’s limited to $300 per item and $1,000 per calendar year.
Final Thoughts on Amex Cash Magnet
- It’s not a game changer by any means
- But Amex needed a competitive card in the cash back space
- If you can hit the two sign-up bonuses
- You earn an effective 5.5% cash back
All in all, while not a game changer, Amex Cash Magnet is a decent credit card offer if you’re looking for cash back and think you can spend $7,500 in a year or less.
Those who have a large purchase in mind might be able to snag the sign-up bonuses with little effort and earn an effective 5.5% cash back.
The downside is that you can only redeem the cash for a statement credit, gift card, or select merchandise. And let’s face it, you’re probably not going to go for those latter redemption options.
It’s good for someone looking for a bonus who has exhausted better options, or perhaps is over 5/24. But it’s really only good for the first year and if you plan on spending a lot during that time.
After that, you’d be better off with one of the several 2% cash back credit cards available.
(photo: Marcin Wichary)