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The American Express Cash Magnet® Card is a straightforward cash back credit card with no annual fee and a flat, unlimited cash back earning rate on all eligible purchases. Additional perks include a generous welcome offer worth up to $150 cash and a long 0% APR introductory promotion for balance transfers and purchases.
If Cash Magnet feels familiar to you, you’re onto something. It has obvious similarities to other popular flat-rate cash back cards available to U.S. consumers. Top competitors include the Capital One Quicksilver Cash Rewards and Chase Freedom Unlimited, both of which earn the same flat, unlimited 1.5% back on eligible purchases.
Mulling your cash back options? Read on to learn more about the American Express Cash Magnet Card’s features, benefits, drawbacks, and overall suitability.
You’ll earn $150 in bonus cash when you make at least $1,000 in eligible purchases within the first three months that your account is open. You’ll receive your bonus cash as a statement credit after meeting the eligibility thresholds.
Earning Cash Back
This card earns an unlimited 1.5% cash back on all eligible purchases. Cash-like transactions and certain other transaction types do not count toward cash back earnings. Cash back accrues as Reward Dollars, which can be redeemed for cash and other items but have no intrinsic value. As long as your account remains open and in good standing, Reward Dollars don’t expire.
Redeeming Cash Back
Once you accrue at least $25 in Reward Dollars, you can redeem them for statement credits, gift cards, and general merchandise. You need to spend at least $1,666.67 to earn enough Reward Dollars to meet the redemption threshold, not counting bonus cash earned through the welcome offer.
Cash Magnet has a 0% APR introductory promotion on purchases and balance transfers. Both transaction types accrue no interest for 15 months from your account opening date. In order to qualify, transfers must be made within 60 days of your account opening. Following the end of the promotional period, variable regular APR applies.
There is no annual fee. Foreign transaction fees cost 2.7% of the transaction amount. Balance transfer and cash advance fees cost $5 or 3% of the transaction amount, whichever is greater.
Pay It & Plan It
Pay It and Plan It are two features included with the Amex Mobile app, which all cardholders are encouraged to download for free.
Pay It lets you make payments equal to the amount of a particular billed purchase, subject to a $100 maximum. Instead of applying to that specific purchase, Pay It payments count toward your outstanding card balance. This is a useful interest-reducing tool for cardholders who routinely carry balances from month to month.
Plan It allows you to create as many as 10 purchase-specific payment plans separate from your main monthly balance. Each plan’s principal is capped at $100, for a $1,000 maximum on all Plan It payment plans. Like Pay It, Plan It can help reduce interest charges for customers who routinely carry balances from month to month. It can also improve cash flow by reducing monthly minimum balance payments and spacing out required payments throughout the billing period.
Cash Magnet has a nice lineup of travel benefits:
- Complimentary loss and damage coverage on rental cars paid in full with the card
- 24/7 access to a variety of emergency services – including legal, medical, and financial -when you travel more than 100 miles from home
- Roadside assistance in most areas
- Complimentary travel accident insurance, a bare-bones form of travel insurance
This card comes with a number of useful shopping benefits:
- Extended warranties of up to one year on items with existing manufacturers’ warranties of up to five years, subject to limits of $10,000 per item and $50,000 per calendar year
- Return protection covering eligible items rejected for return by the original retailer within 90 days of purchase, subject to limits of $300 per item and $1,000 per calendar year
- Purchase protection on covered items damaged or stolen within 90 days of purchase, subject to limits of $1,000 per occurrence and $50,000 per calendar year
- Free two-day shipping on most items purchased through more than 140 online stores in the ShopRunner network
This card requires good to excellent credit. Any noteworthy blemishes on your credit record could disqualify your application
- No Annual Fee. American Express Cash Magnet has no annual fee. That’s great news for frugal cardholders who don’t want to see their cash back earnings wiped out by recurring charges.
- Long 0% APR Introductory Promotion. This card’s 0% APR introductory promotion lasts for 15 months. That’s right up there with the leading cash back credit cards, and nearly as long as specialized low APR credit cards such as Citi Simplicity.
- Generous Welcome Offer. Cash Magnet’s welcome offer is more generous than most no-annual-fee cash back cards’. If you make $1,000 in eligible purchases within the first three months, you’ll earn $150 bonus cash. If you’re planning a major purchase in the first 12 months your account is open, and your credit limit and budget can support such spending, this is a great opportunity to take home some extra cash.
- Straightforward Cash Back Program. This card earns unlimited 1.5% cash back on all eligible purchases. No need to worry about quarterly rotating categories, cash back tiers, or exclusions other than the standard cash-like transaction prohibitions.
- Nice Value-Added Features and Fringe Benefits. By the standards of flat-rate cash back credit cards, Cash Magnet has an above-average lineup of value-added features and fringe benefits. If you’re on the fence about applying, these might be enough to tip you into the pro-Cash Magnet camp.
- Cash Back Earnings Capped at 1.5%. Cash Magnet’s cash back earnings are capped at 1.5%. Try as you might, you can’t earn at a higher rate. This is a drawback relative to cards with more generous tiers, such as the Blue Cash Preferred Card from American Express (which offers up to 6% cash back on select category spending) and the Citi Double Cash Card (which offers flat, unlimited 2% cash back for cardholders who pay their balances in full each month).
- No Point Transfer Options. Unlike some no-annual-fee cash back credit cards – namely, Chase Freedom Unlimited – Cash Magnet doesn’t have any decent options for point transfers to travel loyalty partners. In comparison, Freedom Unlimited’s generous 1-to-1 point transfer deal brings low- or no-cost travel within reach, even for frugal cardholders, and can dramatically boost the value of earned cash back points.
- $25 Minimum Redemption Threshold. You can’t redeem your Reward Dollars until you accrue at least $25. That requires spending north of $1,650. If you’re frugal or don’t have a very big budget, it could take you several months to clear that threshold. Most competing cash back cards don’t have redemption minimums.
- Foreign Transaction Fee. This card has a 2.7% foreign transaction fee. If you routinely travel outside the United States for business or pleasure, look to an alternative card with no annual fee.
- Penalty Interest on Past-Due Balances. This card charges a very high APR on past-due balances. The penalty rate remains in force indefinitely, so even one missed payment could cost you hundreds of dollars per year in additional interest charges.
The American Express Cash Magnet® Card isn’t the cash back credit card category’s gold standard. Plenty of other cards, including some with no annual fees, have better rewards schemes and juicier benefits.
That said, Cash Magnet is a great fit for no-drama cardholders seeking predictable rates of return on everyday spending. You don’t have to be a rocket scientist to understand its rewards program, as is the case with some travel rewards credit cards, nor do you have to stay on top of rotating rewards categories or complicated tiers. As long as you’re cool without luxe perks and white-glove treatment, you’ll do just fine with American Express Cash Magnet.
Originally posted at https://www.moneycrashers.com/american-express-cash-magnet-card-review/