Confused by MSE's £10k claim on AMEX

DarkWatcher

Hi all,

I've just been looking that the cashback advice on the Amex Fee and Fee-Free cards. MSE states that the fee-free beats the fee'd card below annual spends of £10k.


I put together a spreadsheet and worked out the cashback at various spending levels.


Assuming Amex 1 earns tiered 0.5%,1%,1.25% at <3500, 3501 to 7500 and 7501+ (respectively) without a fee and Amex 2 earns 1.25% on everything with £25 then I work out that Amex 2 passes Amex 1 at £3333.33 when they both earn a net cashback of £16.67


Am I missing something?

reclusive46

I've always thought the same thing really. No idea why MSE advises the 10k amount. You don't need to spend a huge amount for it to be better.

Cycrow

But then if you spend £3500, you get 1% on the Everyday, which would give you more than the other when you take of the yearly fee.

again between 7500 and 10000, both give 1.25%, so they earn the same amount, but the everyday has the extra £25 without the yearly fee

zerog

Cycrow wrote: »

But then if you spend £3500, you get 1% on the Everyday, which would give you more than the other when you take of the yearly fee.

No, you only get 0.5% on £3500

again between 7500 and 10000, both give 1.25%, so they earn the same amount, but the everyday has the extra £25 without the yearly fee

But the lower cashback on your first £7500 is more than the fee, therefore it is better to pay the fee.

The above applies in the second year of your card (but you should not be holding the fee-free card for more than a year anyway, as you should cancel and get a different bonus if your spending is not high)

Anyway, in your first year, if you can spend an extra £500 in the first 3 months on the paid card, then you have already made most of your fee back as the 5% applies on £2500, not £2000

Cycrow

i assumed (perhaps wrongly) that the rate of cashback you get is based on spend.

so if you spend over £3500, you get the 1% on the whole balance. Rather than different amounts of cashback on different balances

is there anyone who has this card that can confirm?

reclusive46

Cycrow wrote: »

i assumed (perhaps wrongly) that the rate of cashback you get is based on spend.

so if you spend over £3500, you get the 1% on the whole balance. Rather than different amounts of cashback on different balances

is there anyone who has this card that can confirm?

No. You only get the cash back rate on the amount. So 0.5% On first 3500 then 1% on the amount between 3500 to 7000. etc.