I recently got chatting to a work colleague about the AMEX Platinum Cashback Card. Our conversation considered whether it made sense to keep the cashback card or change it for an American Express Gold card or British Airways American Express card if you happen to love collecting airmiles.
Let’s take a look and see. For all three cards, I’m going to assume first year spend of £10,000 followed by annual spend thereafter of £10,000. This gives a realistic timescale for accumulating enough points to redeem for a reward flight in reward flight in club class.
First let’s take a quick look at the headlines for each card.
The cards lowdown
AMEX Platinum Cashback card
For the first three months, cardholders can get 5% cashback on purchases (up to a maximum of £125). After that, you earn 1% cashback for spend up to £10,000. For spend over £10,000 you earn 1.25% cashback.
If you spend £10,000 per year you will thus earn cashback of £200. This assumes you spend a minimum of £2,500 in the first three months to get maximum value from the introductory offer. That will bag you £125 cashback and the remaining £7,500 spend earns £75 in cashback. That £200 might book you an economy flight in Europe but it will not get you much more!
The card has an annual fee of £25 per annum so if you hold the card for five years it will cost you £125. Also, please read the terms and conditions before you apply for a credit card to ensure you are fully aware of any restrictions which apply to cashback earnings.
AMEX Gold card
The AMEX Gold card offers members the ability to earn membership rewards for every £1 spent. These rewards can then be used for many things including travel. Members can transfer the membership reward points to many different frequent flyer programmes and use them to book reward flights. The joy of this approach is that the rewards can help you to fly Club or First class for less than you might normally pay for economy.
We have used our membership rewards to book reward flights with British Airways in First Class and Virgin Atlantic Upper Class. We have literally saved thousands on these flights, however note it is not advisable to use miles to fly short-haul economy. The cost of fees and taxes alone will mean that you save very little on the advertised fare and will be unlikely to save the £200 you would have earned from your cashback card.
For every £1 you spend you earn 1 membership reward. If you sign up as a new cardholder, you can also earn a bonus of 10,000 membership rewards if you spend £3,000 in the first three months. Assume you do, you will earn 20,000 membership rewards in year one. If you keep the card for a further 4 years, and spend £10,000 per annum, you will earn a further 40,000 membership rewards. 60,000 membership rewards is enough for a business class flight to Europe or the States.
This post on the AMEX Gold card explains more about the benefits but please read the terms and conditions before you sign up. There are restrictions to the sign up bonus which have recently been introduced.
British Airways Premium Card
The British Airways Premium American Express card allows you to earn 26,000 AVIOS when you spend £3,000 in the first three months if you use my referral link. For every £1 you spend, you also earn 1.5 AVIOS. £10,000 of spend for someone who earns the sign up bonus will therefore bag you 41,000 AVIOS in year one. For the next four years, £10,000 earns 15,000 AVIOS per annum. After 5 years, you would therefore have 101,000 AVIOS and five companion vouchers. You need to spend £10,000 on the card each year to earn the companion voucher.
|AMEX Platinum Cashback Card||£1,000
(based on £200 per annum)
(based on £200 per annum)
|No restrictions on how you spend the money||If you want to use it to fund travel, you should be able to fund an economy flight to Europe or long-haul.
Cost of £125 based on a £25 annual fee.
|AMEX Gold card||Nil||I saved £3,530 on flights to South Korea in Club class plus 75,000 miles per person. Note, this is the saving for two people.||Can redeem for many goods and services including travel and flights.||£140 per annum card fee from year two. Total cost for 5 years is therefore £560.|
|British Airways American Express card||Nil||The sky is the limit. I saved £6,400 on flights to Vancouver in First Class.||If you spend £10,000 in the year, you will earn a companion voucher. This allows you to book flights for half the normal AVIOS points when travelling as a couple.||You can only redeem for British Airways AVIOS. You can use these for flights and many other goods and services.
£195 cost per annum. Total cost over 5 years £975.
Platinum Cashback v Gold
If you opt for the AMEX Platinum Cashback Card your net return is £1,000 less £125 which is £875 after five years.
Assume you earn enough Membership rewards for one flight with the AMEX Gold card. You book one long haul flight in Club Class which saves you £1,765 (50% of the saving I made on my flights to South Korea). The net return is therefore £1,765 less £560 which is £1,205.
However, these flights needed 150,000 points in total as we used a British Airways companion voucher. You would therefore need to use more rewards or a companion voucher which requires spend on the British Airways cards. If you look at US destinations, these require a much lower number of rewards which means you could book a single flight in Club Class to the States. My experience tells me you will certainly save more than you would earn in cashback, but it could be close.
It is hard to say for certain that the AMEX Gold card will be better than the cashback card if you are currently considering which to sign up for. If you already have the AMEX Platinum Cashback Card it certainly would not be prudent to ditch your Card and switch it for Gold. You do not qualify for the sign up bonus if you have held a AMEX card in the last 24 months so this would make the difference even more negligible.
Platinum Cashback v BA AMEX
If you opt for the British Airways American Express card the comparison is much more clear cut. You would earn 101,000 AVIOS which would be enough to fly First Class long haul if you travel as a couple and use a companion voucher. The least I have saved in this situation is around £2,800 which is considerably more than the cashback, even after you deduct the cost of the card.
Unlike the AMEX non-branded cards you will qualify for the sign up bonus providing you have not held any other British Airways American Express card in the last 24 months. Therefore you could decide to switch your AMEX Platinum Cashback Card to British Airways American Express card and still earn the sign up bonus.
Have your say?
What do you think? I would love to know and the comments are there for you to share your thoughts.