Popular American Express Credit Card Drops Most Rebates to 1.25%
Written by Curtis Arnold
Posted On: May 18, 2009
EDITOR'S NOTE: THIS OFFER IS NO LONGER AVAILABLE. Click here for the latest offers from American Express. A tough economy makes it harder to find great cash rewards in credit cards. The American Express Blue Cash Credit Card has been the favorite card in my wallet for several years. This credit card offered a 1.5% cash rebate on most of my purchases, and it punched the bonus up to 5% for transactions at selected merchants. What was required of me to do was spend at least $6,500 per year on this card. However, recently, American Express changed its terms and conditions, reducing the amount of cash you can earn to 1.25% on most purchases. Now, I'm rethinking my love affair with the card.
Right now, credit card issuers are trying to find any way they can to minimize risk and preserve their own cash flow. Because cash reward credit cards attract big spenders, they can also lead to higher balances. That's something industry leaders don't want to see on their books this year. For companies operating cash back credit card programs, reducing payouts not only keeps more money in the bank, it can weed out some high risk customers.
Three Ways to Get Bigger Cash Rewards
American Express spokesperson Mona Hamouly wants me to reconsider by reminding me of some ways I can maximize my cash rebates:
• Consolidate Spending. According to Ms. Hamouly, tracking my purchases and using an online calculator can help me hit that $6,500 goal sooner.
• Add Supplemental Cardmembers. "Their eligible purchases will count toward the primary Blue Cash Cardmember's rebate."
• Enroll in Recurring Billing. "Cardmembers can earn cash back on recurring monthly bills they already pay, such as gym memberships, plus cable and cell phone bills."
New Gas Rebate Limits
American Express Blue Cash has always offered special bonuses for purchases at grocery stores and drugstores. However, one of the most unusual -- and specific -- limitations on purchases is a cap on rebates for gas station purchases above $400. While gas prices are rising again and I know that some "big honkin'" SUVs can can cost an arm and a leg to fill up, I can't imagine spending anywhere near 400 bucks to fill up a tank (scary thought, huh)! So, why the specific change?
According to Ms. Hamouly, American Express "made the decision to limit gas transactions because we found that a small number of Cardmembers were using the Blue Cash Card for gas purchases that appeared to be for business purchases. The Blue Cash Card is a consumer card meant to be used for household spending."
I must admit that I was at first confused by this change. Bottom line...I don't think this is a big deal. Unless you are an independent trucker that has been using your Blue Cash card for gas purchases, I wouldn't worry to much about this provision.
Maximize Blue Cash from American Express, While You Can
Like other Cardmembers, I learned about the changes in my April credit card statement. The previous benefits and rewards still apply through the month of May. Between now and then, I'll still have to decide whether to stick with American Express Blue Cash, or to jump to a competing cash rebate credit card.
How do you feel about American Express dropping its rebate rates? We welcome you to share your ideas on our active credit card forum.