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American Express announced today that it would be launching two new consumer credit cards called the EveryDay cards, with applications opening on April 2, 2014. I talked to Amex’s Senior Vice President of Consumer Lending Products, David Rabkin about the cards and what’s so unique about them.
First off, there are two versions of the card, the EveryDay and the EveryDay Preferred. What’s great is that these are the first two consumer credit cards from Amex that earn full Membership Rewards points – meaning they’re the kind like you earn with the Premier Rewards Gold or Platinum cards that you can transfer to the program’s travel partners rather than just Membership Rewards Express points which you can just redeem for merchandise and cash back. The other cards that earn full MR points are all charge cards, meaning you have to pay them off in full each month or incur huge fees, while these new cards are traditional credit cards, meaning you have the flexibility to pay off over time if needed with fewer fees. The basic Amex EverDay card has no annual fee, which is a first for a full Membership Rewards earning card, and the preferred version is $95, which is more in line with competitors like Chase Sapphire Preferred ($95, waived the first year) and BarclayCard Arrival ($89, waived the first year).
Here are the rest of the details on each card as I got them from Amex.
EveryDay Credit Card (No Annual Fee)
- Earn 10,000 Membership Rewards® points after you use your new Card to make $1,000 in purchases in your first 3 months.
- Use your Card 20 or more times on purchases in a billing period and earn 20% more points on those purchases less returns and credits. Terms and limitations apply.
- 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x); 1x points on other purchases. Terms and limitations apply.
- You can use Membership Rewards® Pay with Points to pay for all or part of your flight, hotel booked and paid in advance, vacation or cruise booking.
- No annual fee. Plus, 0% intro APR on purchases and balance transfers for 12 months, then a variable rate, currently 13.24% to 23.24%, based on your creditworthiness and other factors.
- Terms and Conditions apply.
EveryDay Preferred Credit Card ($95 annual fee)
- Earn 15,000 Membership Rewards® points after you use your new Card to make $1,000 in purchases in your first 3 months.
- Use your Card 30 or more times on purchases in a billing period and earn 50% more points on those purchases less returns and credits. Terms and limitations apply.
- 3x points at US supermarkets on up to $6,000 per year in purchases (then 1x); 2x points at US gas stations; 1x points on other purchases. Terms and limitations apply.
- You can use Membership Rewards® Pay with Points to pay for all or part of your flight, hotel booked and paid in advance, vacation or cruise booking through amextravel.com.
- 0% intro APR on purchases and balance transfers for 12 months, then a variable rate, currently 13.24% to 23.24%, based on your creditworthiness and other factors.
- Terms and Conditions apply.
So as you can see, these cards offer the potential to earn more than just one point per dollar on every purchase (and each transaction/purchase counts towards earning those bonuses, so it can be as little as a pack of gum) since you can earn those transaction-threshold bonuses not just on the base points you earn but also on the category spending bonus points. I value Amex Membership Rewards points at about 2 cents apiece thanks to being able to transfer them to dozens of partners as well as using Pay With Points to book travel, so your return on spending is potentially 9% with that supermarket and transaction bonus on the Preferred card. Clearly the value you receive will be based on your valuation of Membership Rewards points.
So on the regular card, you’re earning between 1-2.4x points per $1 on purchases (so a 2-4.8% return on spending for me) while with the Preferred card, you’re earning between 1-4.5x points per $1, so you’re getting 2-9% for me back depending on how savvily you strategize.
With Chase aggressively pushing into the travel credit cards marketplace in the past few years, it’s about time American Express launched some new products to compete with the likes of the Freedom and Sapphire Preferred – and at the same annual fee price points.
While the sign-up bonuses are lower than other Membership Rewards cards and than the competing Chase cards, I do think their day-to-day earning potential could be as high if not higher than some of its fellow Amex cards and the Chase competitors. I try to earn more than 1 point or mile per dollar on all my purchases, but that’s not always easy. With the Sapphire Preferred, I get 2x on travel and dining, and even when I am not using the Freedom to earn 5x points on the quarterly rotating spending category bonus merchants, I get a 10% bonus on purchases thanks to Chase Exclusives, but remember that 10% bonus requires a checking account with Chase..
I also try to shop online as much as possible to maximize online shopping portal bonuses, but sometimes you just have to go into a store to buy something. For example, I have huge feet, and it’s hard for me to find shoes that fit, so I usually have to go to a shoe store or department store. In that case, I usually use my Freedom, or even my Starwood Amex since even though it only earns 1x points per $1, I value those points very highly as well.
Where these cards will come in handy is as a catch-all for purchases you might not earn bonus points on otherwise since you just need to meet a certain number of transactions to get a bonus on all the points you earn – and that bonus comes on top of category bonuses, so if you earn 3x points per $1 on groceries and meet the transaction number on the Preferred card, you’ll actually end up earning 4.5x points per dollar. Even better, there’s no minimum spending requirement for something to qualify as a transaction, so it can be anything from a cheap pack of gum. Not only that, but Amex let me know that if you make the number of necessary transactions to earn the bonus points on your card and then return something so that you slip below the bonus threshold, they will not punitively take away all your monthly bonus points for that month, you’ll just lose the bonus points on the single transaction.
But how do these cards stand up against similar offerings? Here are the other American Express cards you’d likely be considering.
The Premier Rewards Gold is another option since it earns 3 points per dollar on flights booked directly with airlines, 2 points per dollar on US supermarkets, and one point per dollar on other transactions, and there are no yearly purchase caps. You also earn 15,000 bonus points when you spend $30,000 in a calendar year, and the sign-up bonus is currently 25,000 points when you spend $2,000 in 3 months. However there is a $0 Intro annual fee for the first year, then $195.
The Blue Cash Everyday card has no annual fee and earns 3% back at US supermarkets on up to $6,000 a year, 2% back at US gas stations and select US department stores, and 1% on other purchases – and these points can only be used for cash back and merchandise, not travel. The Blue Cash Preferred card has a $75 annual fee and earns 6% back at US supermarkets on up to $6,000 in purchases per calendar year, 3% back at US gas stations and select US department stores and 1% on other purchases.
In terms of Chase, the Freedom card has no annual fee and earns 5x points per dollar on quarterly categories up to $1,500 per quarter and 1x points per $1 on everything else and has no annual fee. You can also only redeem Ultimate Rewards points you earn on it for cash back at 1%. The Sapphire also earns cash back on travel and statement credits at 1% and earns 2x points per $1 on travel and dining with no annual fee, while the Sapphire Preferred, which has a $95 annual fee waived the first year earns 2x points per $1 on travel and dining plus a 7% annual points dividend on all points – both base earning and bonus points (excluding sign-up bonus) and waives foreign transaction fees, which neither of the EveryDay cards does.
A Good Membership Rewards Starting Point
So if you don’t have any Amex cards, the EveryDay cards would be great intro cards to the Membership Rewards that are much cheaper than the existing cards like Gold card and the Premier Rewards Gold. However, with the Premier Rewards Gold you get a bigger sign-up bonus, and if you hit the $30,000 calendar year spending threshold bonus to earn those 15,000 bonus points, you are upping your everyday potential earning to about 1.5x points per $1. Plus there are no limits to bonus points you earn on airfare, gas or groceries, so if you spend a lot in those categories, you’ve got a lot of earning potential.
However, the EveryDay Preferred card could be a great companion to the Premier Rewards Gold as well since that 1.5x base earning is like earning at least 3% back on all purchases and that’s not even taking into account the category spending bonuses. That’s just if you plan on transferring to Membership Rewards’ transfer partners. If you’re just going to use your MR points on Amex’s Pay With Points at 1 cent apiece, you’re only getting 1.5% back on your spending, and you might be better off with a fixed-value card like the Barclaycard Arrival where you get 2.27% back on spending on travel purchases.
The EveryDay Preferred might also be a great companion card to the Sapphire Preferred so that you’re diversifying your points portfolio with Membership Rewards, earning bonus points on spending you don’t earn bonuses on with the Sapphire Preferred, and that you have at least one card (the Sapphire Preferred) that waives forex fees if you travel abroad.
So that’s my preliminary look at these two new Amex products. We’re going to be taking a more in-depth look at the EveryDay cards over the coming days and weeks as we get closer to the April 2 launch date, but the bottom line is, more credit card options and more competition is better for the consumers, so I’m happy about these new additions to the Amex stable.
In the meantime, look out for the Tina Fey commercial for them during the Oscars!
Premier Rewards Gold Card from American Express
|Intro APR||Regular APR||Annual Fee||Balance Transfer Fee||Credit Rating|
|N/A||Introductory annual fee of $0 for the first year, then $195||See Terms||Excellent Credit|