New TSB cashback credit card: do I need my Amex?

There’s a new cashback credit card in town from TSB, offering 1% back on your spend. I’ve crunched the numbers to see how it compares to other cards.

This month TSB launched the Platinum 20 Month Purchase Credit Card. What makes it interesting is it offers 1% cashback on all purchases. That’s not too far off the 1.25% I get with my American Express. I love my Amex, but it’s still not accepted everywhere, and it comes with a £25 fee – so could this new TSB be a better bet?

First, here’s a look at what the two cards offer:

TSB Platinum cashback credit card

  • 1% cashback on first £500 spend each month until 30th September 2017
  • 5% cashback on first £100 spent via Apple Pay until 31st December 2016
  • 20 months interest-free purchases
  • You need to have a TSB Classic Plus current account

This card could be a nice little earner. If you spend £500 every month on the TSB Platinum 20 Month card, you’ll get a fiver. Over a year that’s £60 in free money.

On top of this, there’s another £5 a month available until Christmas if you spend using Apple Pay. Plus, to get this account you need to have a TSB Classic current account, which offers a similar 5% cashback spend on the debit card via contactless until 31st December. So there’s a potential £30 more to be made this year.

If you really want to push your returns, you could also take advantage of the interest-free period. Rather than paying the credit card off in full each month you could move that money into a high rate interest account  or regular saver account where you’ll be earning another 4-5%. Just make sure you pay the card off when the 20 months end!

Another advantage is this Mastercard TSB will work with the Supercard and Curve card (more on these soon), meaning you can keep earning cashback when spending money abroad.

One downside though is if you spend more than £500 a month, or £700 if you include Apple Pay and the current account, you won’t earn an extra cashback.

American Express Platinum Cashback Credit Card

  • 1.25% cashback
  • 2.5% for one month each year if you spend £10,001 in a year
  • 5% in first three months on spend up to £2,500
  • £25 annual fee

If you don’t have either card, I think the American Express Platinum Cashback card is the best option, at least for one year. The 5% on a £2,500 spend is worth £100 after the fee – a great extra if you’re spending that much and are able to pay it off in full every month.

Since I’ve already got the card, I only get a bonus 2.5% month every year, and only if I’ve spent £10,000 in the previous 12 months – that’s £800 a month. Since not everywhere takes Amex, and I use my Santander 123 card for travel (see bottom of this article), that’s not necessarily going to happen.

Still, even just 1.25% is a better rate,and you earn get the cashback if you spend more than £500 each month – perfect for big purchases.

Also, Amex run special offers throughout the year that provide even more cashback. I’ve just redeemed one for a £30 statement credit when spending £100 at Selfridges, and these can easily add up to £100 a year – if not more.

How much do you need to spend for the Amex to be the better option

An annual spend of £6,800 (equivalent to £567 a month) on the Amex would earn £85 cashback a year. Once you remove the £25 fee that’s the same as spending £500 a month on the TSB card. So you will earn more cashback for every additional pound you spend.

However, if you used the full Apple Pay and contactless TSB offers you’d need to spend £9,200 a year (£767 a month) on the Amex to earn the same £90 (after the fee).

Factor in the TSB’s 20 months 0% purchase option and you need to spend even more on the Amex to compete. However, you will have a credit limit – i.e. how much you can spend on the card – meaning there’s probably just £2,500 to £3,000 you could keep in savings.

Remember, you only get cashback on full pounds. Amounts will be rounded down, so £1.99 is the same as £1 as far as the banks are concerned.

Also, only spend on credit cards if you’re confident you can pay them off each month – or before the end of 0% period – otherwise you’re be paying far more in interest than you’d make in cashback.

So will I ditch my Amex?

It’s a tricky one, but I think I’m going to try the TSB. There’s very little in it based on how much I’d probably spend on the cards, but the 0% spending aspect and the ability to connect it to the Supercard give it a slight edge.

That doesn’t mean I’m going to give up on American Express completely. There is a Platinum Cashback Everyday card which doesn’t have an annual fee. The cashback rates are less – 0.5% for the first £3,500, eventually leading up to 1.25% – but I’d still have access to the statement credit offers.

A little note about the Santander 123 cashback credit card

The decision was a little more complicated for me as I’ve also got a Santander 123 cashback credit card. I get 3% back on all petrol and travel spend, up to a max of £9 a month. We generally get £6 or £7 back each month, which after the fee is worth around £50 each year. So there’s £300 or so each month we wouldn’t be spending on either the Amex or TSB card.

Sadly, if you don’t already have the card, new customers are capped at £3 back on travel, which is cancelled out by the £3 a month fee, so it’s not really worth it. Due to this I didn’t factor this card into the calculations above.


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