Is this the best Amex credit card?
There have been some big changes to the Amex Preferred Rewards Gold credit card – potentially making it the highest paying reward card out there.
Here’s what you need to know about the card, how to hack the point redemption to earn more money and how it compares to other cashback cards.
Earning Reward points
You earn points for the American Express Preferred Rewards scheme rather than cashback. There are different levels when you spend with the Amex Gold Rewards card. You’ll get:
- 1 point per £1 spent
- 2 points per £1 spent with airlines or in foreign currencies
- 3 points per £1 spent at American Express Travel
Personally I’d ignore the double and triple points unless you happen to get the best deal direct with an airline or Amex Travel. It’s better to get a lower price elsewhere even though you’ll earn half the points back. You’ll also be better off using a fee-free card to spend in foreign currencies.
One of the big changes in October 2022 is to the bonus points you can earn through your spending. The new system staggers the bonus so you get 2,500 bonus points for each £5,000 you spend.
The bonus points will be added to your account as soon as you reach the spending threshold. It’s capped at a spend of £20,000 a year meaning the most you could get in a year are 10,000 additional points. Here’s how that’ll work:
Previously there was just a single 10,000 point bonus when you spent £15,000 over a year, which meant many would have missed out.
The revamp means lower spenders will now get something rather than nothing, and those spending more than £20,000 will get the same bonus. But higher spenders between £15,000 and £19,999 a year will lose out.
How much will you make from the Amex Gold?
It’s all very well talking about these points, but how do you use them and what are they worth? The former is easy. You can exchange your points as soon as they are paid via the Membership Rewards website.
But the value of the points depends on how you redeem them. They’re worth 0.45p when swapped for bill credit or used on retailer sites. So 1,000 points will be worth £4.50.
That increases to 0.5p (£5 per 1,000 points) when exchanged for a gift card at retailers such as M&S, Amazon, Selfridges and Waterstones, or converted to Nectar points directly with Nectar. This means the cashback equivalent is 0.5%.
However, if you convert them to Avios (at 1:1) and then convert them to Nectar points they’re worth 0.67p, or 0.67% (they used to be worth 0.8p but it was devalued in late 2022). So 1,000 points are worth £6.70. However, there is a downside to using this conversion trick – you’ll only be able to spend your points at Nectar partners such as Sainsbury’s, eBay and Argos.
You can also swap them to your Avios or other airline schemes at a rate of 1:1. Personally I think most people are better off getting a cash value they can use on everyday spending than be restricted to using them as part of a flight loyalty scheme.
Factoring in the spending bonus
But the new spending bonuses mean the actual cashback could actually be higher. Let’s see how it impacts the equivalent cashback rate as a percentage.
If you spend £5,000 (ignoring the welcome bonus which I’ll come back to), you’ll actually get 7,500 points, not 5,000.
Convert those to Nectar, via Avios and it’s worth £60. That’s now an effective cashback rate of 1%. But only if you spend in multiple of £5,000 up to £20,000. Here’s how it’d pan out based on annual spending with the card.
|Annual spend||Points earned||Additional bonus points||Total value as gift card||Equivalent cashback rate||Total Nectar points value (via Avios)||Equivalent cashback rate|
So really you’re looking at at least 0.83% on this card for spending over £5,000 if swapping to Nectar, and close to 1% if you are on or just over a £5,000 threshold. Only super high spenders will eventually earn less than this.
New American Express customers who haven’t had an Amex in their name in the last 24 months (more on this rule here) will get a welcome bonus worth 20,000 Reward Points when they spend £3,000 in the first three months. You have to spend the full £3,000 to get the bonus. Spend even 1p less and you won’t get it.
This would be valued at £100 if converted to a gift card, but thanks to the Nectar/Avios partnership this could be worth £134.
The bonus is earned alongside the points given for each £1 spent, meaning that the initial £3,000 spend is actually worth £153 when using the Nectar/Avios trick, or £115 if converted at 0.5p.
There are also regular boosted bonuses, increasing the welcome points available to 30,000 or 35,000 (depending on the offer). When converted to Avios then Nectar the latter (along with the 3,000 points earned from spending) can be worth a huge £253. Check my Amex deals page to see if there’s an offer like this running right now.
Be aware that getting this card (bonus or not) will rule you out of earning the welcome bonus from the Platinum Amex, one of the only cards that allows a second bonus.
Other Amex Gold perks
£10 Deliveroo credit a month
There’s potentially £120 back in credit for spending at Deliveroo with the Gold card. It’s actually two lots of £5 per month, each requiring a £5 minimum spend. This offer needs to be activated on your card, and won’t apply to any supplementary cards.
Free airport lounge passes
You also get four airport lounge passes each year. These can be used at Priority Pass locations, which can be hit and miss – it all depends on which airport you are at. In the past I’ve not bothered to use them. You can find a lounge here.
This is something previously limited to Platinum card holders. You’ll be able to book on (and pay for) events and exclusive food and drink deals throughout the year.
Other cashback offers
Something I love about Amex are the extra offers you can select via the app and your online account. Though these are retailer specific and won’t always be relevant, the Shop Small promotion in particular is a great way to support local shops and make more cashback.
Annual fee and charges
This card is free in the first year. However after this it comes with an annual fee of £160 (increased from £140 in October 2022).
I can’t see how it’s worth paying this much when you can swap to a free or much lower fee card and earn a similar amount on your spending.
Interest on purchases is 26.6%, so as with any cashback or reward credit card it’s pointless using one if you’re going to get charged interest. Setting up a direct debit to clear the full amount each month is the best bet.
Cancelling your Gold Amex
If you won’t want to pay the fee from year two onwards, you can cancel your card. If you miss the anniversary and get charged, it’s still worth cancelling as the fee will be refunded prorata, giving you back the money for unused months.
However closing the card will mean you lose unused Reward points. Fortunately there’s a free Amex Rewards card you can apply for which will protect your balance. Make sure you do this before ditching the Gold card.
Amex Gold vs other cashback cards
If you’re eligible for the offer and able to spend £3,000 in three months then the Amex Gold card offers the highest-paying welcome bonus without a card fee in year one. It’s even better if you’re happy to swap the points to Avios then Nectar. And if you can wait for a boosted bonus then that’s £253 in your account in three months.
But, as mentioned, having this card rules you out of later applying for a welcome bonus with the Amex Platinum card, which is often at 60,000 points. This won’t be for everyone, but if you think you might do this, then perhaps you’d be better off going for a different Amex first.
Compared to the other cards, the Nectar will earn you the equivalent of £100 in Nectar points, while the Amex Platinum Cashback offers up to £125 (5% on the first £2,500). These however are better options if you can’t make the minimum £3,000 required for the Gold.
As long as you are happy to convert Amex points to Avios then Nectar, and as long as you spend more than £5,000 a year, you’ll get more than 0.89% back on your spending. Potentially as high as 1%.
Right now there are three cards which will pay a similar cashback rate. The Chase Bank debit card pays 1% for a year and is free. The Amex Nectar pays two Nectar points per £1, which is effectively also 1%. This has a fee in year two, but only £25, so much cheaper than the Amex Gold!
The American Express Platinum Cashback card pays a lower 0.75% on spending up to £10,000, then 1.25% for further spending (it resets each year). It also comes with a £25 annual fee, though this can be wiped out in the first year with a referral code or if you open the card via a cashback site. Even so, when you’re not paying the fee in year one then the Gold will win in all but the highest annual spends.
Should you get the Amex Preferred Rewards Gold credit card?
Thanks to the new bonus structure, this card currently can’t be beaten for everyday cashback as long as you are happy with three conditions:
- You will spend at least £5,000 in a year
- You are happy to convert the Reward points to Avois and then to Nectar
- You will cancel the card after year one to avoid the fee
Factor in the best welcome bonus out there and this is a great Amex to go for.
The only caveat I’d have is whether you think you will try the second welcome bonus hack for the Amex Platinum card. When it’s boosted, that and some additional deals can be worth £900.
How to apply for an American Express Preferred Rewards Gold card
You can obviously go direct via American Express, and I’d encourage you to do the eligibility check first. Once you’ve done this, I’d check the rates at Quidco and TopCashback, or via refer-a-friend links, to see what extra you can get.