Monday, January 26th, 2015, 9:01 am
Update: The Amazon Prime offer is expired.
American Express is a DansDeals.com advertiser.
A few weeks ago a fellow blogger asked my opinion of what is the most underrated credit card.
It’s always tough to single one card out.
For card benefits I answered with the United Explorer. It’s no secret I’m a fan of the card as I wrote about in this post.
But for spending I wrote that it’s the Amex EveryDay Preferred Credit Card from American Express
Assuming you can make 30 transactions per month, it offers 1.5 points per dollar everywhere, 3 points per dollar on gas and Uber, and 4.5 points per dollar on groceries.
It’s really even more than that, as Membership Rewards often offers bonuses for point transfers. Currently there is a 35% bonus for transfers to Virgin America and more crucially, a 40% bonus for transfers to British Airways. In the past transfer bonuses to BA have ranged between 20-50%.
With a 40% transfer bonus, you have effectively earned 2.1 BA Avios per dollar spent everywhere, 4.2 Avios per dollar spend on gas and Uber, and 6.3 Avios per dollar spent on groceries.
If you value BA Avios at 1.5 cents each that’s like getting 3.15% back everywhere, 6.3% back on gas and Uber, and 9.45% back on groceries. It’s really easy to get that kind of value out of a BA award flight. If a paid one-way flight is $67 and you use Avios for it then you’ll have achieved this value. If the paid flight is $134 then you can double those values in each of those categories. No close-in fees and $5.60 flight cancellations only sweeten the pot.
Spend $715 on groceries and you’ll get 3,218 points. Transfer them to BA during a 40% bonus and you’ll have enough Avios for a free flight. The grocery bonus is capped at $6,000/year (which would earn 27,000 points).
Fly one-way from NYC to Montreal or Detroit this week and a ticket on American will set you back up to $800. Or you can use 4.5K BA Avios. That means the points reward from buying $715 of groceries can be worth more than you paid for the groceries! And it’s why I love real miles over cashback cards because the cost of an award isn’t tied to the actual cost of the ticket. That applies even more so on business and first class awards where awards can also be very lucrative.
If you don’t have 30 transactions in any given month you’ll only get 1 point per dollar everywhere, 2 points per dollar on gas and Uber, and 3 points per dollar on groceries. Just have your statement close on the first of every month and set your calendar to remind you on the 29th of the month to check your account to see how many transactions you made that month.
Even if you return an item it doesn’t subtract the original transaction.
The EveryDay Preferred card has a $95 annual fee, but that’s low considering it’s the only card other than the $395/year United Club card that gives 1.5 real airline miles per dollar everywhere. (Yes Ink cards can potentially earn more, but you’d have to first buy gift cards and then use those gift cards everywhere which will wind up costing you valuable purchase protections that credit cards offer).
The fee is also negated by the fee-free additional user cards you can get that each qualify for AMEX promotions such as Small Business Saturday.
It also offers 0% intro APR on purchases and balance transfers for 15 months. After that, your APR will be a variable rate, currently 12.99% to 21.99%, based on your creditworthiness and other factors.
The signup bonus is 15K Membership Rewards points plus 1 year of Amazon Prime for spending $1,000 within 3 months.
The Amazon Prime offer is a limited time offer. It will come as a code sent to you via email after you meet the $1,000 spend threshold. If you already have Amazon Prime the code will extend your Prime membership by a year.
Don’t want to pay an annual fee? You can downgrade the card to the non-preferred version of the card or you can apply for the fee-free Amex EveryDay Credit Card from American Express. However that card only earns 1.2 miles everywhere and 2.4 points per dollar on groceries and Uber. On the plus side it’s the only fee-free card that can transfer points into real airline miles without having to first transfer the points to a card with an annual fee.