About American Express Cash Magnet Card
The American Express Cash Magnet is AmEx’s newest cash-rewards card, offering up to $300 in sign-up bonuses the first year and a 1.5% rewards rate on all purchases.
The card is the first of its kind among the cards that AmEx offered at the time of publishing because it offers a single rewards rate and a tiered sign-up bonus, something that appeals to consumers who are looking for a simple cash rewards card that doesn’t have confusing rewards categories.
The simplicity of this card is refreshing but is it the right card for you? There are literally dozens of choices you have for cash back cards from a variety of different banks: the Chase Freedom Unlimited and Quicksilver from Capital One, for example.
In this review, we’re going to help you figure how beneficial this card could or couldn’t be for you by examining the rewards it offers, some of the key benefits you’ll get and then comparing the rewards you’ll receive to other cash back cards.
The American Express Cash Magnet’s Rewards
Most cash back cards that you check out are going to have two main cash rewards: a sign-up bonus and a rewards rate that applies to pretty much every purchase you make with the card.
Sign-Up Bonus: Up to $300
If you can spend $1,000 in the first three months of owning this card, then you’ll earn a $150 bonus that will appear in your rewards account within 6-8 weeks of you hitting the spending requirement.
You have the opportunity to earn another $150 bonus if you can spend $6,500 in the first 12 months of owning the card. Based on our research, we believe that the average individual can spend enough in the first year to earn both bonuses.
The $300 you can earn the first year is among the best first-year bonuses you’ll find with cash back cards. The Chase Freedom Unlimited and the Capital One Quicksilver offer $150 bonuses if you can spend $500 in the first three months.
The Discover it will double your first-year rewards, which could earn you $300 if you spend $25,000 a year. Citi’s top cash back card, the Double Cash, does a $100 bonus for spending $500 in the first three months.
Word of warning: AmEx can take your sign-up bonus from you if they think you are trying to cheat the system. For example, if you make a big purchase to hit the spending limit and then return that purchase a few months later, AmEx might consider that cheating and could cancel your bonus.
Here’s the exact terminology of their fine print concerning this matter:
“For example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amounts, we may not credit statement credit to, we may freeze statement credit credited to, or we may take away statement credit from your account.”
Rewards Rate: 1.5%
Your sign-up bonuses are something that you only get once. That’s why your rewards rate is key because it’s the engine that’s going to produce your cash rewards for as long as you own the card.
Our research of the Bureau of Labor Statistics’ average household spending numbers indicates that there’s a good chance a family can spend at least $25,000 a year on their card. Spending that much each year can earn you $375.
American Express allows you to redeem these points for statement credits, which means they show up on your statement in the same way that a return or sign-up bonus would. Keep in mind that you can only redeem your points in chunks of $25.
The cash back you can earn with this card is the exact same as you’d get from the Freedom Unlimited and the Quicksilver, both of which have a 1.5% cash back rate.
The Discover it has a 1% cash back rate, but because it gives you 5% bonuses on certain purchases, it earns you around $300 instead of $250.
The top two cash back cards we’ve reviewed are the Citi Double Cash and the Alliant Cashback Visa Signature.
Based on $25,000 spending each year, the Double Cash can earn you $500 and the Alliant can earn $625 a year.
The American Express Cash Magnet’s Benefits
This card’s benefits include a 0% offer for purchases and balance transfers as well as a variety of insurance-style protections that cover certain purchases you make.
0% for 15 Months
Any balance transfers you make in the first 60 days of owning the card won’t be charged interest for 15 months. It’s important to remember that the 60-day deadline starts the day you’re approved and not the day you get the card in the mail.
The 0% offer also applies to any purchases you make; none of then will get an interest charge for the first 15 months.
Once the 15 months ends, your regular interest rate of 14.74% - 25.74% will apply to any balances you have on the card.
Travel and Shopping Benefits
Whenever you book a rental car with your Cash Magnet card, you’ll get complimentary collision damage waiver insurance, provided you decline the insurance the rental car company provides.
Also, if you use your card to book airfare, then you and/or your family can receive compensation if you die or are dismembered during your travels.
As far as shopping benefits go, purchases you make with your card will get extended warranty protection as well as an extended return period in the event that the retailer from which you bought the item doesn’t accept your return.
You’ll also get 90 days purchase protection, through which you can be reimbursed for the cost of things you buy that are stolen or accidentally damaged.
The American Express Cash Magnet’s Rates and Fees
As we mentioned earlier, the Cash Magnet has an APR range of 14.74% to 25.74% -- the lowest APR tends to go to those with credit scores of at least 700.
The card also has penalty APR of up to 29.99% that will kick in on your first late or returned payment. AmEx may remove the APR if you can make six consecutive on-time minimum payments that aren’t returned.
Late and returned payments will get a $38 fee. Cash advances and balance transfers will get a 3% fee.
The Cash Magnet has no annual fee.
How the Cash Magnet Compares to Other Cash Back Cards
We’ve mentioned a few other cards in this review, particularly in the section about rewards. In the following table, we’ve listed that rewards information as well as each card’s APR range and whether or not they have a penalty APR.
|Card||Yearly Rewards||Sign-up Bonus||APR||Penalty APR?|
|AmEx Cash Magnet||$375||$300||14.74% - 24.74%||Yes|
|Alliant Cashback||$625||$125||11.74% - 14.74%||Yes|
|Citi Double Cash||$500||$100||14.99% - 24.99%||Yes|
|Chase Freedom Unlimited||$375||$150||16.49% - 25.24%||No|
|Discover it||$250||$300||13.49% - 24.49%||No|
The Cash Magnet rates well among the cards in this group. Its yearly rewards are middle-of-the-road. We’d rate its sign-up bonus as the top choice because you get the second $150 6-8 weeks after you spend $6,500, whereas the Discover it’s bonus is handed out after your card’s one-year anniversary.
The card’s APR is average, at best, and the presence of the penalty APR is definitely a drawback but not uncommon.
The Final Word: Pros and Cons of the American Express Cash Magnet
In our opinion, the Cash Magnet’s best features are its 1.5% cash back rate along with the $300 sign-up bonus. We project that you could earn $675 in rewards the first year when you combine your spending cash back with the sign-up bonus.
The card’s main drawback is the penalty APR. While this isn’t an anomaly among cashback cards – the Double Cash and Alliant Visa Signature also have it – it presents a financial risk to those who often pay late. If that’s you, we’d recommend avoiding this card because it could end up costing you a significant amount of money via interest payments.
Based on our research, we believe this card is a good fit for those who pay on time and are loyal to the American Express brand.
If you want to learn more about cash back cards, take a few minutes to read through our Best Cash Back Credit Cards of 2018. In the article, we examine six different credit cards, ranking them according to their overall value, as well as how they fit into specific situations.