“Yes, but did you use the Amex?!”
If you start using a rewards credit card, you’ll quickly realise that it’s possible to ‘earn’ something for every pound you spend. The basic concept is that you apply for a specific rewards card, you receive points or cashback based on your spending, and then (when you have enough of these), you use these for flights, hotels, shopping, etc. Importantly, you never actually pay for the credit, because this exercise is only worthwhile if you pay your statements in full each month – these cards will never have the most competitive interest rates.
There are ways to maximise your returns, typically by targeting, and churning, bonus point offers, but even if you don’t want to ‘churn’ cards, getting 1% of everything you spend as cashback or points, is easily achievable. If you regularly churn bonuses, it’s possible to get anywhere between 6 & 12% of your spend back – at the top end that’s £120 back for every £1,000 you spend (and that’s before we even get to any card ‘perks’). When you realise this, it’s easy to become a points ‘addict’, suffering panic whenever there are ‘wasted’ opportunities and pounds, because something wasn’t spent on the right card! In our house, these moments usually follow me asking my wife the (likely very irritating) question: ‘Yes, but did you use the Amex?’. For example, ‘I filled the car with fuel…’ ‘Yes, but did you use the Amex?!’ ‘Oh.’
For me the Amex (American Express) Membership Reward system is top of the pile, which is why typically (unless I have another bonus to hit) this is the card I use – whenever it’s possible of course. Ironically, for me, the ‘but is it accepted?’ flaw it’s most regularly criticised for is what actually highlights its attractiveness. We all know that American Express isn’t accepted everywhere, but that’s because it’s a more expensive method for retailers to accept/process, and the reason for this….? Because it’s paying more back in rewards to the customer!
If you’re looking for a first rewards card, the American Express Gold Credit Card is the obvious place to start. If you spend £2,000 in the first 3 months, you receive 20,000 bonus reward points (or 22,000 if you use this referral link!), plus a further point per £ spent (so an additional 2000 points on that spend). These points can be transferred to an unrivalled number of schemes, for flights, hotels, shopping or used to pay for things. The key thing to know though, is that their value can vary significantly depending on how you use them. If you quickly cash them in for Amazon spend, you’ll get just 0.45p per point (which is still £90+), but with a bit of research some hotel and flight options can be worth 0.8-1.0p/point. With the bonus from being referred, plus the points acquired as you spend, that could be up to £240 (12%) to spend on travel, just for putting £2,000 of your normal spending through the card over 3 months.
The card can be cancelled at any time, is free in year one and £140/year thereafter. It also comes with two free airport lounge visits and further travel benefits (see link): https://www.americanexpress.com/uk/credit-cards/gold-credit-card/ The APR is a whopping 57.6%, so definitely only worthwhile if you can pay every statement in full.
If you give it a try, let me know whether you find yourself asking the same question!
If you’d like a referral use our link for additional bonus points (click here).
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N.B.. Disclaimer: This is an amateur, personal blog. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances.