Is this the best Amex credit card?
Thanks to a partnership link up between Nectar and Avios, it’s now possible to earn more with this reward credit card from American Express than any other.
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.
Watch this video review or keep reading
What you get with the Amex Preferred Rewards Gold credit card
Earning Reward points
You earn points for the American Express Preferred Rewards scheme rather than cashback.
There different levels of points back 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.
What Amex Reward points are worth
You can exchange your points as soon as they are paid via the Membership Rewards website.
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,
That increases to 0.5p when exchanged for a gift card at retailers such as M&S, Amazon, Selfridges and Waterstones, or converted to Nectar points direct with Nectar. This means the cashback equivalent is 0.5%.
However, if you convert them to Avios and then convert them to Nectar points they’re worth 0.8p, or 0.8%.
You can also use them to boost your Avios or other airmile balances, but 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.
The Nectar / Avios points hack
The new partnership between Nectar and Avios from January 2021 allows you to covert 400 Nectar points for 250 Avios points. But you can also convert them the other way.
So, if you switched 250 of your Amex Reward points to Avios, at a rate of 1:1, you’d have 250 Avios. Then change them into Nectar points and you’d have 400, worth at face value £2.
Compare this to switching 250 Reward points to Nectar points, also at 1:1. Those 250 Nectar points would be worth £1.25! The same as if you’d converted them to an Amazon gift card.
You could potentially also double the value of the points via the annual Nectar Double Up scheme, where you can swap up to £50 worth of points for £100 to spend at selected departments in Sainsbury’s.
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.
Annual fee and charges
This card comes with an annual fee of £140, though it’s free in the first year.
There’s no reason to keep the card in year two but you’ll need to cancel to avoid getting charged. If you do forget to do this then the good news is the fee is pro-rata, meaning you’ll get refunded for months you don’t use.
If you do cancel the card but want to keep your Rewards points balance you’ll need to open the free Amex Rewards credit card.
Interest on purchases is 22.2%, 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.
Amex Gold bonuses and perks
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.
This would be valued at £100 if converted to a gift card, but thanks to the Nectar/Avios partnership this could be worth £160.
This bonus is earned alongside the points given for each £1 spent, meaning that initial £3,000 spend is actually worth £184 when using the Nectar/Avios trick , or £115 if converted at 0.5p.
You have to spend the full £3,000 to get the bonus. Spend even 1p less and you won’t get it.
High annual spend bonus
If you spend £15,000 in the first 12 months you’ll be given 10,000 reward points, worth £80 via the Avios/Nectar hack, or £50 via other exchanged.
You have to keep the card open one month beyond that one year anniversary to get the points added to your account. But once you’ve got your points, and either opened a free Amex Rewards card or redeemed all your points, you can close the Gold Rewards card and get a refund on the fee.
This effectively means you’ll pay £11.67 to get your £80 in points, so the true value of this bonus is £68.
Combine this with the welcome bonus and a high spend and you’ll earn £348 over 13 months!
Free airport lounge passes
You also get two 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.
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.
Amex Gold vs Amex Platinum Cashback
Up until this point I’ve said that the best cashback credit card was the American Express Platinum Cashback credit card.
And it still sounds like a better card at first glance. You’ll earn 1% back on each full pound spent, and then £1.25% back on each pound once you’ve spent more than £10,000 in a year. Much higher than the 0.8% you’ll get via the Amex/Avios/Nectar swap.
It also comes with a £25 annual fee, though this can be wiped out with a referral code or if you open the card via a cashback site.
However, it’s the welcome bonus where the Gold Rewards now beats the Platinum Cashback. The 5% on the first £2,500 spend with the Platinum is worth £125. To bring it inline with the £3,000 qualifying spend for the Gold, it works out as £130 vs £184.
In fact, because of the high spend bonus after 12 months, for the Platinum Cashback to ever earn you more you’d need to spend over £34,000 a year!
|Annual Spend||Amex Gold Rewards||Amex Gold Rewards||Amex Platinum Cashback|
|(converted at 0.5p)||(converted at 0.8p)|
*within the first three months ** includes annual high spend bonus
However, the Platinum can still be the best choice for some. Anyone who won’t spend the full £3,000 in three months on the Gold card will be better off with the Amex Platinum. You’ll get 5% back even if you spend less!
Plus with the Platinum card you don’t have to spend the earnings in Sainsbury’s or other Nectar partners, and it still beats the Gold card if you redeem at 0.5p rather than 0.8p.
It’s also a better option in year two. though you won’t get the welcome bonus if you open it up as a replacement after 12 months, you will earn substantially more than the Gold Rewards. You can read more about the Platinum Cashback and it’s brother the Platinum Cashback Everyday credit card here.
This card can’t be beaten as long as you are happy with two conditions:
- You will spend £3,000 in three months when you first get this card
- You are happy to convert the Reward points to Avois and then to Nectar
However, you absolutely have to axe the card after 12 months, or 13 months if you qualify for the annual high spend bonus.
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 to the eligibility check first.
However you can make a little more if you go via cashback site Quidco, currently offering an extra £20 bonus. And if you’ve not used Quidco before, make sure you sign up via my exclusive offer where you’ll get a £17 bonus when you spend £10 via the site.
Alternatively, if you have a friend with the Gold Rewards card see if they will give you a referral code, worth an extra 20,000 points.