American Express has launched a new credit card offering a juicy 20,000 point sign-up bonus – enough to get you a return flight to over 100 destinations including the Caribbean or Mexico.
The Preferred Rewards Gold credit card offers Membership Rewards points when you spend, which can be swapped for the same value with 12 different airline reward schemes including Virgin Atlantic Flying Club and British Airways Executive Club.
Among other perks it includes free lounge access and room upgrades at popular hotel chains and charges no annual fee in the first year.
So should it make it to your wallet? We take a look.
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The new card replaces the old Amex Preferred Rewards Gold charge card which had no limit, but effectively didn’t allow borrowing as it had to be completely cleared each month.
Existing customers won’t be affected but going forward the new credit card replaces the charge card option.
What does the card offer?
To get the 20,000 Membership Reward point bonus you must spend £2,000 within the first three months.
You also earn one point per £1 spent on the card, two points per £1 for foreign currency spends or airline bookings and three points if you spend with American Express Travel.
You also get an extra 10,000 points for every year you spend more than £15,000 on the card, and if you recommend a friend you get a 9,000 point boost (up to a maximum of 10).
These can be exchanged like for like for airline rewards points with Alitalia MilleMiglia, Asia Miles, British Airways, Delta Skymiles Executive Club, Emirates Skywards, Etihad Guest, Finnair Plus, Flying Blue, Iberia, Scandinavian Airlines, Singapore KrysFlyer and Virgin Atlantic FlyingClub.
You can buy giftcards with your points to use with retailers including M&S and Selfridges, or to pay with companies such as Amazon or Ticketmaster.
As good as gold: Could the new Amex card beat other reward cards?
The card is free for the first year, then you pay £140 per year.
Most importantly, the interest on purchases is 22.9 per cent, and the APR on the card is 57.6 per cent, due to the annual fee.
There are a couple of other perks of card membership.
Cardholders also get two complementary Priority Pass lounge visits for you and a guest each year.
If you book a room through the Membership Rewards site for two or more nights you can also get a free room upgrade and $75 (£53) hotel credit.
This is available at all hotels part of its Hotel Collection which includes chains such as Hilton, Intercontinental and Conrad.
Customers also get Amex Travel Accident and Inconvenience insurance which covers you for things like flight delays, missed connections baggage issues or accidents while traveling when purchased using the card. You also get access to the Amex global assistance services with a 24 helpline.
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Could it replace your Avios or Virgin Atlantic card?
One of the most popular and lucrative rewards credit cards currently is the British Airways American Express Premium Plus, which offers spenders BA Executive Avios every time they swipe their card.
It offers 25,000 Avios to sign up, and a free companion voucher on a £10,000 spend – but it costs £195 a year. General spends earn 1.5 Avios per £1.
To make the most of the card you need to spend £1,250 per month. This gets you the companion voucher, and a total of 47,500 Avios in the first year including the sign up bonus, or 22,500 every year after that for £195.
Spend the same on the Preferred Rewards Gold card and you would earn 45,000 points after 12 months thanks to the sign up bonus, anniversary points and for spending. And of course the first year doesn’t cost you anything.
Going forward, the same monthly spend gets you 25,000 points per year – more than the Avios – but no companion voucher. But another recommendation, your points never expire.
Virgin Money recently launched its new Virgin Atlantic credit cards. You can read our review here.
It’s premium option, the Reward+ Credit Card gives 15,000 points to sign up, and 1.5 Flying Club miles for ever £1 you spend.
It also comes with a companion voucher or free upgrade after a £10,000 spend and has a lower annual fee than the BA Amex, at £160.
Over the course of the year you would earn 37,500 miles including everyday spends and the sign up bonus, and you get a companion ticket. After the first year you would earn 22,750 points for spending the same amount.
So what’s the verdict?
If you play the game, and ditch the card after the first year, it could be a clever way to bag yourself a free flight somewhere, and works out much more generous than alternative free cards the BA American Express, particularly if you use the hotel and lounge perks.
But in reality, there may be few who actually ditch it after a year.
In the long run it does stand up fairly well against rivals, even considering the annual fee. It pays marginally more points than the BA Premium Plus Amex for the same spend, but you don’t get a companion voucher which is often the main aim for spenders using the airline card.
That said it may be an option people prefer if they want more choice of airlines to redeem with, it the extra perks such as lounge access and room upgrades at certain hotels make it feel like a premium card.
As mentioned above though, it is ONLY worth considering if you make sure to avoid interest.
This is Money asked Rob Burgess, editor of frequent flyer and travel credit cards website headforpoints.com what he thought.
He said: ‘Amex Gold is easily the best travel rewards card on the market for someone who is new to points collecting or who is active in many travel loyalty schemes. The 20,000 point sign-up bonus is huge and transfers to most many major airline and hotel loyalty schemes, including Avios and Virgin. You should easily be able to get £200 of value from it.
‘The two free airport lounge visits are a great perk on your next holiday. Day to day, 1 point per £1 is a very decent earning rate. I am less confident that the card has value after the free first year but you have plenty of time to decide before any fee is due.
‘The only downsides are the high interest rate – this is a bad card if you don’t pay off your balance every month – and the fact that you will need a Visa or Mastercard for places where Amex is not accepted.’
Read this first before applying
The golden rule if you are using any credit card with a rewards scheme attached is to keep sight of the fact that these are run with the aim of getting you to spend more, potentially earning the company more in interest.
While you want to use the card for as much everyday spending as possible, you should make sure to clear your balance to avoid any interest charges.
At 22.9 per cent these interest charges will quickly wipe out the value of any points you clock up.
Set up a direct debit to ensure you don’t forget, it will also avoid any penalties for missed or late payments which can also affect your credit score.
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