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Rates checked as of October 11, 2023
Do you enjoy throwing money down the drain? I think we all know the answer, but if you pay off your credit card in full each month and it’s not a rewards credit card, you are almost certainly missing a serious money-making trick.
Right now, some banks are falling over themselves to throw money at new customers to take out a rewards credit card with massive intro bonuses on top of regular ongoing rewards.
So why continue to accept a card that is giving you nothing back? I recently made a clarion call for savers to take advantage of rising rates and switch, and now I’m making a similar call to credit card holders, too.
American Express' $600 bonus
One recent highlight is the American Express® Gold Card , which is paying newbies a 60,000 points bonus (typically worth $600) for those who spend $6,000 in the first three months.
American Express® Gold Card Variable rewards
Amex Gold has a hefty annual fee of $250, but it comes with a helping of side benefits for those who dine out frequently. Plus, new cardholders can get 60,000 points after spending $6,000 in the first six months, worth about $600.
This is a great card for foodies who like to travel, cook or dine out. The card has no foreign transaction fee and a host of perks like travel protections, up to $120 in Uber cash and dining credits and three points for flights booked through the American Express travel portal. If travel rewards are your main objective, however, we recommend a card with more flexible travel booking options. See rates and fees.
- Intro bonus: Earn 60,000 Membership Rewards® Points if you spend $6,000 in the first six months, worth about $600.
- Interest rate: Pay Over Time APR: 21.24% to 29.24%, based on your creditworthiness and other factors as determined at the time of account opening.
- Annual fee: $250
- Foreign transaction fee: None
- Rewards: Earn four Membership Rewards points per dollar spent at restaurants or on take-out and delivery in the U.S.; earn four points at per dollar at U.S. supermarkets up to a maximum of $25,000 spent in a calendar year, then supermarkets purchases earn one point per dollar; earn three points per dollar on flights booked directly with airlines or with Amex Travel; two points per dollar on other eligible Amex Travel purchases; and one point per dollar on other spending.
- Experience credit: American Express Experiences include access to music, theater, sports, dining and fashion events, some of which are exclusive or early access for cardholders; now you can get a $100 experience credit with a minimum two-night stay when you book The Hotel Collection through American Express Travel; experience credit varies by property.
- Additional rewards: get up to $10 in monthly statement credits for purchases with certain restaurants and delivery services, including The Cheesecake Factory, Grubhub, Goldbelly and select Shake Shack locations, plus $10 in monthly Uber Cash that you can put toward Uber Eats purchases or Uber rides.
- Redemption: Points are redeemable at a rate of 1 cent each for flights booked through Amex and certain gift cards (points are worth less for most other redemption options).
- Terms apply
Other American Express credit cards also provide substantial bonuses to new cardmembers. For a summary of the Green, Gold and Platinum cards, check out American Express Credit Cards: The Best Pick for You.
Why a reward credit card makes sense
There are several factors to consider when choosing a credit card that is right for you.
Recent figures released by American Bankers’ Association show just over half of Americans with a credit card carry a balance over every month, which means they aren’t paying it off in full and therefore are paying interest.
If you cannot pay off a credit card in full, then a reward credit card is not right for you. You are better off with a balance transfer credit card so you move it from a high-interest card to one at 0% interest. There’s little point in a rewards credit card in that scenario as over time the interest will dwarf any gain from the reward.
Yet if you can or do pay off your card in full each month then a rewards credit card is a no-brainer as you are effectively being paid to spend. You can choose between a cashback credit card that pays money into your account or one that gives you points or vouchers.
I should add that a rewards card isn’t an excuse to spend on stuff you can’t afford or don’t need just to gain the reward, otherwise it’s a false economy. Instead, just put all your normal spending on it, which is easier these days with fewer and fewer places accepting cash.
I’ve been using rewards credit cards for years, mainly to amass airline miles. I put all my normal spending on one, and I’ve chopped and changed to snag intro bonuses, as has my wife, which means we’ve managed to travel across the world in business or first class, paying less in cash each time than we would have for an economy ticket.
How credit cards work
It’s this simple: you spend on the card, pay it off in full each month so there is no interest, and you get your reward usually monthly or annually depending on the conditions. It’s free money if you do it right.
Credit cards are like fire. They’re a great tool if used correctly, but they can burn you if you use them badly. A bad use of a rewards card would be to pay the fee and not spend, meaning you get nothing back, to buy stuff you cannot afford, to not to pay it off in full, or to miss payments, which means interest, possible charges and a hit to your credit score.
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As an independent publication dedicated to helping you make the most of your money, the article above is our view and is not the opinion of any entity mentioned such as a card issuer, hotel, airline, etc. Similarly, the content has not been reviewed or endorsed by any of those entities.
Guy has extensive experience in personal finance journalism having joined Future (Kiplinger's parent company) after 13 years at MoneySavingExpert.com, most recently as deputy editor, and working closely alongside Martin Lewis. He has also worked at the Daily Mail as a personal finance reporter and his work has appeared in The Sun, Guardian, Observer, Mirror and other national newspapers. As a money and consumer expert, Guy is a regular guest on TV and radio – appearing on BBC News, BBC Radio 4, Sky News, ITV News and more.
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