[ANALYSIS] American Express SimplyCash Preferred Card

Right when American Express decided to cancel its cash back credit card, they come out with a new product. There is now the American Express SimplyCash Preferred Card. Below are the highlights of the credit card:

• $79 annual fee
• No annual fee for supplementary cardholders
• Earn 5% cash back on purchases for the first 6 months (up to $400 cash back or $8,000 on purchases)
• Earn 1.5% cash back after your first 6 months (on the first $100,000 annual purchases)
• Earn 1.25% cash back thereafter (on purchases above $100,000 in annual purchases)

This can be quite lucrative. First of all, if you manage to maximize $8,000 in purchases for the 6 months period to get 5% cash back for a total of $400. Had you only earn 1% cash back, that would have been only $80 ($8,000 x 1%). Therefore, the $79 annual fee can easily be worth it, because you are netting $321 ($400 – $79) instead of only earning $80 in cash back.

The question is whether the $79 is worth it beyond the first year. Let’s say you earn 1.5% on a maximum of $100,000 in purchases, that’s a maximum of $1,500. Quite a significant difference from the 5% on $48,000 in spending.

I really like the 5% cash back on all purchases for the first 6 months, but beyond the first year, I’m not certain the $79 is that worth it. If you’re looking for a good cash back credit card with an annual fee to keep beyond the first year, I would go with the Scotia Momentum Visa Infinite Card instead.

There is also a no annual fee version of the credit card which I think is very valuable. The American Express SimplyCash Card has the following highlights:

• No annual fee
• Earn 5% cash back on all gas stations, grocery stores and restaurants purchases (up to $250 cash back or a maximum of $5,000 in purchases) for the first 6 months
• Earn 1.25% cash back on all other purchases and thereafter

The 1.25% is higher than many other credit card that offer only a 1% return, so this can be a good credit card to use on items that you are not already getting more than 1% cash back on. Since there is no annual fee, it doesn’t hurt to keep it around.

Either way, I believe that both new credit cards mentioned above are far better than the recently cancelled American Express Gold Cash Back Credit Card.