I have received numerous inquiries regarding One from American Express, a new cashback credit card that deposits 1% cashback into a high yield savings account. Here Ill discuss the features, benefits, and fine print issues of One from American Express. Delving into the precise rewards value of this Amex credit card is a little difficult. Whenever you make a purchase, American Express makes a deposit of 1% into a high-yield savings account (currently, the variable interest rate is 3.5%). The amount of interest you can earn will vary dramatically from cardholder to cardholder. Now, because Im a rewards junkie, I use my credit cards for every purchase and pay my balance in full each month. Why use an ATM card when you can get paid to use your credit card? It doesnt make sense. Assume you use your One from American Express credit card for all of your everyday purchases. Over the course of a year, most peoples food, gas, and entertainment expenses exceed $10,000 to $15,000, especially those with large families. Thus, if you spend $10,000 with the One from American Express credit card, youll receive a $25 bonus deposit for signing up, $100 in savings deposits, plus interest. So far, very good. Additionally, new card members are charged no annual fee their first year, and are benefited even more by an Interest Protection feature that allows you the opportunity to pay no interest on new purchases, even if you carry a balance. However, small spenders do face a problem. During the second year of card membership, there is an annual fee of $35. For those who spend $10,000 or more each year on their credit card, this doesnt pose too much of a problem, as youll earn most of that fee, if not more, in interest. However, if you only spend a few thousand dollars a year, the annual fee will really eat away at your rewards. For those who fit into the small spending category, other cashback credit cards, such as the American Express Blue Cash SM , the Citi Dividend Platinum Select Card, or the Chase Cash Plus Rewards Visa may ultimately provide better value. Overall, One from American Express provides great value for large spenders. But, unlike cashback credit cards that charge no annual fee, this credit card may not be the best option for smaller spenders. Copyright 2006 Credit Card Depot Inc. |
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