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AmEx’s new cashback card is for consumers who want ‘simple’ perks

Courtesy of American Express
The new Cash Magnet card will likely appeal to millennials and others who want “easy” cash again.

American Express AXP, -Zero.70%  , as soon as an exclusive credit-card corporate handiest to be had to the biggest spenders, is making its playing cards even easier to get.

On Thursday, the company released the American Express Cash Magnet card. It has no annual fee and can pay limitless 1.five% cash again. There is not any cap on the amount of money again cardholders can earn. And cardholders earn the cash on all varieties of purchases, not just ones in positive categories like groceries or restaurant meals.

AmEx created the Magnet card partially in line with buyer call for for playing cards with perks that are easy to understand, mentioned Liz Bergman, the vice chairman of proprietary lending product management at American Express.

“Cash again is likely one of the most well liked categories in the market,” she mentioned. “This card is for folks with busy, difficult lives, and we would have liked a product that can simplify that complexity.”

Those customers aren’t necessarily millennials, she mentioned, but it surely’s likely that a lot of them they're. Millennials have a tendency to have that “mindset,” she mentioned, of in need of flexibility on how they can use rewards reasonably than leaping via hoops to redeem them.

A cash again reward is an alternative choice to the numerous perks that include different playing cards. Some playing cards, as an example, allow customers to amass after which spend points, but the points can handiest be used for positive varieties of purchases.

With the Cash Magnet card, customers can handiest use their cash again as a credit on their per thirty days bill. Some playing cards, corresponding to Chase’s Sapphire Preferred, allow cardholders to deposit the cash into their bank account.

The AmEx Cash Magnet card will also be offering a sign-up bonus throughout its release. Until July 18, new cardholders can earn up to $300 in additional cash again. They will earn a $150 bonus in the event that they spend $1,000 on the card within the first 3 months. They can earn an additional $150 in the event that they make an additional $6,500 in purchases on the card within the first 12 months.

The rate of interest on the Cash Magnet card can be Zero% on purchases and balance transfers for the first 15 months. Then, it'll be a variable fee of 14.49% to 25.49%, relying on the cardholder’s credit score. That compares to a median of 17% throughout credit cards in the marketplace, consistent with the personal-finance website online Bankrate.

Another play for millennials: The card will be offering Pay It Plan It, a feature American Express offered on some of its playing cards in August 2017. It allows customers to pay for positive purchases of $100 or more in installments — essentially a financing plan, however throughout the credit card. Instead of paying the cardboard’s rate of interest on those purchases, customers pay a flat fee each month on purchases that they designate as Pay It Plan It.

Some 50% of those who use Pay It Plan It are millennials, American Express mentioned.

There are already cashback playing cards in the marketplace — and plenty of be offering more than 1.five% cash again.

• American Express already provides the Blue Cash Everyday card, which gives 3% again at U.S. supermarkets, on up to $6,000. That card additionally provides 2% again at U.S. gasoline stations and make a selection department stores and 1% again on different purchases.

• American Express’s Blue Cash Preferred card provides 6% again at U.S. supermarkets, on up to $6,000 consistent with yr in purchases.

• Chase’s JPM, -Zero.20%   Freedom card provides five% cash again on positive categories of purchases that modify a couple of instances consistent with yr, corresponding to items from grocery stores, gasoline stations or transactions on PayPal, plus 1% limitless cash again on all different purchases.

• The Discover “it” card DFS, -Zero.62%   additionally provides five% again on rotating categories, plus 1% again on all different purchases.

• Citi’s C, -Zero.47%   Double Cash card provides 1% limitless cash again, then an additional 1% when customers make their card bills.

• The Uber credit card from Visa V, -Zero.34%   provides four% cash again at restaurants, takeout and bars, 3% on airfare, motels and holiday home rentals, 2% on e-commerce purchases and 1% on all different purchases.

• And the Amazon AMZN, +Zero.36%   Prime Rewards Visa, to be had to Prime subscribers, offers five% on and Whole Foods purchases, 2% on restaurants, gasoline stations and drugstores and 1% on all different purchases.

American Express is betting that some customers will in finding different playing cards in the marketplace too bulky, Bergman mentioned. “Some folks want the simplicity of not enthusiastic about categories,” she mentioned.

Maria LaMagna covers own finance for MarketWatch in New York.

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