American Express launches 'unique' cashback credit card

Customers on the new credit card earn 1% cash back per dollar spent on eligible purchases, plus 5% cash back per dollar spent for the first month once they are approved, up to a maximum of $200 cash back. 

There is also 1.5% cashback for purchases made at participating 'Shop Small' business outlets, with the offer ending 31 March 2022.

The interest rate on the card is 20.74% p.a with 55-days interest-free, which is in-line with other rewards credit cards, but much higher than low-interest credit cards.

However, where the cashback card is different is that there is a $10 monthly fee, but American Express does include a Binge 'Basic' streaming service subscription which is also priced at $10.

Compare credit card offers in the table below.

Payments expert Bradford Kelly said Amex's offering is "really the only cash back card in the market". 

"Its monthly fee is outweighed by the Binge subscription and if you pay off your balance every month, you can probably do OK," he told Savings.com.au.

"The insurance inclusions are also quite attractive."

Such insurances include smartphone screen insurance, purchase protection, refund protection, and fraud protection.

"The Amex 'shop small' and other offers are always very good. The smartphone screen insurance covers you for up to $500," Mr Kelly said.

Mr Kelly also issued two warnings about the Amex card.

"Like all things in life, there’s no such thing as a free lunch," he said.

"The revolving interest rate is 20.74% which could quickly negate any cashback savings or incentives offered ... also a $30 late fee - ouch."

However, the $30 late fee is in-line with other products from American Express and other brands, and is not charged as long as repayments are made by the due date. 

Cashback cards are not common in Australia, and are more common in the United States where the credit card still reigns supreme.

Cards such as Chase 'Freedom', Citi 'Double Cash', Capital One 'Quicksilver' and others all offer cashback offers anywhere from 1.5% to 5% on purchases. 

Another payments expert, Grant Halverson, said they were not popular in Australia due to the "exceptionally rich" airline rewards programs.

"This is past tense, however, as currently airline programs are in decline and non-starters due to Covid-19 restrictions – overseas trips may happen in 2022," he told Savings.com.au.

"Retail programs such as FlyBuys have also cut into cashback offers - but and it's a big but - is it time for cashback?"

Mr Kelly also had one final warning about the Amex credit card.

"Some fitness thing from a Hemsworth is included - haven’t we seen enough of them yet?" he said.

"No more Hemsworths. They are all the same person anyway. For people who hate publicity they really love publicity."

Compare: Average credit card fees.

Australian credit cards the "greatest failure in modern banking"

In the context of Latitude going public (launching on the Australian Securities Exchange, or ASX) earlier this week, Mr Halverson said credit cards are a "legacy business".

"Credit card borrowing peaked in 2012; since then banks and card issuers have managed to engineer one the greatest failures in modern retail banking - losing 27% of their customers, $88.6 billion in lost sales and losing 82% market share in unsecured lending," he said.

"Australians are using debit cards and the NPP [New Payments Platform] not credit cards, and if they borrow it’s piled onto mortgages which total $1.8 trillion - and for the record BNPL has nothing to do with this."

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