Not quite the cash-back king: A review of the American Express Cash Magnet Card

May 7, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor’s note: This post has been updated with the latest credit card information.


American Express Cash Magnet® Card Overview

If simplicity is your thing, the Cash Magnet is one of the easiest cards to wrap your head around, with its flat 1.5% cash back earning rate on everything purchased. There are no bonus categories to remember or points to figure out how to redeem. However, compared to other cards, there are better options for truly maximize your spending. Card Rating*: ⭐⭐⭐

*Card Rating is based on the opinion of TPG’s editors and is not influenced by the card issuer.

It’s great when credit card rewards come easily. Spend money on anything under the sun and see the bonuses roll on in. That’s the case for many cash-back-earning cards, including the American Express Cash Magnet® Card. If you want a one-card wallet where you don’t have to think too hard about the card you’re using, the Cash Magnet can make a lot of sense.

However, this isn’t the most lucrative cash-back card, so it certainly pays to look at what other options are out there. Let’s take a closer look at the Amex Cash Magnet.

New to The Points Guy? Want to learn more about credit card points and miles? Sign up for our daily newsletter.

In This Post

Who is this card for?

The Amex Cash Magnet is a satisfactory option for those who value simplicity above all else. It’s aimed at consumers that have at least “good” credit, so a credit score of 670 and higher will help your chances of approval. This makes it a solid beginner card for those who are newer to earning rewards, like  students or those that are graduating from a secured card. However, this is not a card that should be used for international travel, as there’s a 2.7% foreign transaction fee for each purchase (see rates and fees).

Related reading: The best credit cards for excellent credit

The consistent cash-back rate, low initial APR, a welcome offer and no annual fee (see rates and fees) combined together all make this card more enticing.

Welcome offer: $150 statement credit

New Amex Cash Magnet cardholders will receive a $150 statement credit after spending $1,000 within the first three months of account opening. That’s not a bad welcome bonus for a card with no annual fee (see rates and fees), considering you only have to spend $334 a month — easily achievable from everyday spending — to earn it. (Amex is also offering an additional three months to hit spending requirements due to COVID-19.)

Besides the statement credit, the Amex Magnet also has a 0% introductory APR that lasts for the first 15 months which applies to purchases, then a variable APR,13.99% to 23.99%.  (see rates and fees). That’s helpful if you really need to purchase larger-ticket items and need the time to pay the cost off in full. Of course, those who use credit cards to earn rewards should always avoid carrying a balance and incurring interest charges.

Main perks and benefits

Earn 3% back shopping online (Getty Images / Roberto Westbrook)
Receive purchase protection on this card. (Image by Roberto Westbrook/Getty Images)

The most notable perk is obviously the cash-back component of the Cash Magnet. You’ll receive 1.5% cash back on every purchase, with no limit. There are no bonus categories to keep track of or spending caps to remember.

On the downside, bonus categories offered on other cards can allow you to earn a lot more cash back compared to earning the same percentage on every purchase. More on that later.

While cash back is king, this card also comes with a variety of benefits as part of the American Express card network. For no annual fee (see rates and fees), cardholders are eligible for a surprising number of benefits including:

Additionally, as an Amex cardholder, you’re eligible for the Plan It program, which allows you to pay off purchases of $100 or more in monthly installments without any interest. To use this feature, you first have to be deemed eligible per your credit history; if you qualify, then you’ll have to manage your plan via the American Express app.

Related reading: Best credit cards with purchase protection

How to redeem

Cash Magnet cardholders are rewarded with cash back called “Reward Dollars” that can be used toward statement credit, merchandise and gift cards. One limiting factor is that you have to wait until you’ve reached $25 in Reward Dollars until you can make a redemption.

Reward Dollars can’t be used towards your minimum payment due. Finally, note that you cannot earn or redeem Amex Membership Rewards points with this card.

Other cards to consider

In comparison to other cash back credit cards, this card is towards the back of the pack.

No-annual-fee cards

(Photo by Eric Helgas for The Points Guy)
(Photo by Eric Helgas/The Points Guy)

In the no-annual-fee category, the Citi® Double Cash Card takes center stage with a whopping 2% cash back on all purchases (1% when you make purchases, 1% when as you pay your bill). Cardholders can also now convert the cash back they earn to ThankYou Points via another qualifying Citi card and a linked ThankYou account.

The tag-team duo of the Chase Freedom Unlimited and Chase Freedom are also compelling options. The Freedom Unlimited offers the same 1.5% cash back on purchases. Meanwhile, the Freedom gives you 5% cash back on up to $1,500 in combined purchases on rotating quarterly bonus categories each quarter you activate. The best part is that, in combination with an Ultimate Rewards credit card such as the Chase Sapphire Preferred or Chase Sapphire Reserve, you can redeem points for travel.

Annual fee cards

(Photo by John Gribben / The Points Guy)
(Photo by John Gribben/The Points Guy)

While paying for an upfront annual fee on a cash-back card might be a turn-off, there are several cards where this fee might make sense, especially when you spend a lot on certain categories. Consider the Capital One® Savor® Cash Rewards Credit Card. With this card, you’ll earn 4% cash back on dining and entertainment, 2% at grocery stores and 1% on everything else. If dining and entertainment are your most-used categories, you could easily make up for the $95 annual fee.

Finally, Amex’s own Blue Cash Preferred® Card from American Express is a stellar option, with 6% cash back on purchases on select U.S. streaming subscriptions and at U.S. supermarkets (on up to $6,000 of spending each reward year, then 1%), 3% cash back at U.S. gas stations and on transit and 1% cash back everywhere else.

Like the Savor Cash Rewards, the Blue Cash Preferred also has a $95 annual fee (see rates and fees). One way to maximize your earnings on the Cash Magnet is by actually pairing it with the Amex Blue Cash Preferred. For non-bonus categories, use the 1.5% cash back with the Cash Magnet.

The information for the Capital One Savor Cash Rewards Credit Card, Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related reading: The best cash-back credit cards of 2020

FAQs

What credit score is needed to be approved for the Amex Cash Magnet?

While it’s not just your credit score that American Express is looking at, you’ll likely need at least a score in the mid-to-high 600s to be approved for the Cash Magnet. The card is aimed at consumers that have good or excellent credit.

Related reading: 6 things to do to improve your credit in 2020

Is the Amex Cash Magnet a good card?

The Cash Magnet is a good basic cash-back card with a solid 1.5% earning rate. However, there are some better ways to maximize your spending by taking advantage of specific category bonuses. Also, the Citi Double Cash card earns an impressive 2% cash back (1% when you buy, plus 1% as you pay).

Bottom Line

Using a credit card that earns cash back is a smart way to be rewarded for purchases you’d be making anyway. While the Amex Cash Magnet certainly isn’t a bad choice, there are many better options out there for a cash-back credit card. Generally speaking, these earnings are a bit disappointing when compared to direct competitors.

Additional reporting by Liz Hund. 

For rates and fees of the American Express Cash Magnet, please click here.
For rates and fees of the Blue Cash Preferred, please click here

Featured photo by The Points Guy. 

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.