Amex Platinum Cashback vs Santander 123 Cashback

ten pounds

ONCE the king of the cashback and benefits credit card market, American Express has been given a serious run for its money by the Santander 123 Cashback credit card.

In autumn 2013, Amex announced they were effectively cancelling cashback for smaller spenders, telling cardholders they would only get paid if more than £25 was accrued over the course of a year.

This has been revised down a little - see below - but in the meantime the Santander 123 credit card (reviewed in depth here) appears to have stepped into the gap, with no minimum spend, monthly payouts and benefits seemingly aimed at the average person on the (high) street.

So is Santander the Everyman card, and Amex now only for Big Spenders?

The cards up close

In brief Santander offers:

It used to be the case that there was no limit to the amount of cash back holders could earn on supermarket and department store shopping.

But like many other credit card providers, Santander have become less generous; new customers can now earn a maximum of just £3 per category per month.

In addition, the rate of cash back a purchases qualifies for is defined by Mastercard. Under their terms, Marks & Spencer counts as a supermarket, and so only qualifies for 1% cash back.

Travel spending is defined as such by where it's done: filling the car's tank may seem an obvious travel expense, but if it's done in a supermarket fuel station it will count as a supermarket transaction and only spark the 1% rate.

Similarly, travelcards, Oyster top-ups and train tickets must be bought at travel centres or through a travel company's online ticket site - not in newsagents or other retailers.

The other thing to note is that while The Co-op, Budgens and other smaller supermarkets are included in the scheme, discount supermarket challengers Aldi and Lidl are notable by their absence.

There's no minimum spend - perhaps just as well considering the relatively small returns - and earnings are credited to the account every month.

By contrast, however, American Express offer two rather more complicated cash back cards (full review here).

The Amex Platinum Cashback Everyday credit card offers:

American Express Platinum Cashback Everyday credit card (Go to provider »)
american express platinum cashback everyday
  • 5% cashback for 3 months (up to £3000 spend)
  • Up to 1% unlimited cashback on all purchases (min £3k spend a year)
  • No annual fee
Representative example: When you spend £1,200 at a purchase rate of 22.9% p.a. (variable), your representative APR will be 22.9% APR (variable).

Meanwhile the Amex Platinum Cashback credit card looks like this:

American Express Platinum Cashback credit card (Go to provider »)
american express platinum cashback
  • 5% cashback for 3 months (up to £2500 spend)
  • 1.25% cashback if you spend over £10,001
  • 1% cashback if you spend £0 - £10,000
Representative example: When you spend £1,200 at a purchase rate of 22.9% p.a. (variable), with a £25 annual fee, your representative APR will be 28.2% APR (variable).

Both also offer benefits including

What does that mean in real terms?

Here's what people can expect when spending with each card:

Santander 123

Because there's no minimum required spend, and the cash back is applied every month, Santander card holders might see only tiny amounts of cash coming into their accounts - but over the course of the year it can add up:

Supermarket Department Stores Petrol Total
per month per year
Spend £50/mth £50/mth £50/mth £150 £1,800
Earn £0.50/mth £1/mth £1.50/mth £3 £36
Spend £100/mth £100/mth £100/mth £300 £3,600
Earn £1/mth £2/mth £3/mth £6 £72
Spend £300/mth £150/mth £250/mth £700 £8,400
Earn £3/mth £3/mth £3/mth £9 £108
Spend £500/mth £200/mth £500/mth £1,200 £14,400
Earn £3/mth £3/mth £3/mth £9 £108

Do note what happens when spending goes above a certain point per month - the benefits very quickly peak.

Also remember that the monthly membership fee hasn't been accounted for here; people spending only £50 a month in each category will earn just enough to cover that cost.

Santander 123 Current Account holders who apply for the card before January 10 2016 will at least get their membership fees refunded for the first year - but Santander say they have no plans to extend this deal beyond then.

To cancel out the fee customers need to make sure they spend £300 per month in a qualifying supermarket - the equivalent of a weekly food shop of £75 - or £100 on travel.

American Express

Ignoring the introductory period where spending qualifies for 5% cashback, this is how the Amex cards compare.

Amex Everyday Platinum

Spending Cashback earned per year
Monthly Annual Tiered cashback Total
£250 £3,000* All at 0.5% rate: £15 £15
£300 £3,600 First £3,500 at 0.5%: £17.50
Then £100 at 1%: £1
£18.50
£600 £7,200 First £3,500 earns £17.50, as above
Next £3,700 at 1%: £37
£54.50
£800 £9,600 First £3,500 earns £17.50
Next £4,000 at 1%: £40
From £7,501 to £9,600, at 1.25%: £26.25
£83.75
£1,000 £12,000 First £3,500 earns £17.50
Next £4,000 at 1%: £40
From £7,501 to £12,000, at 1.25%: £56.25
£113.75

*From American Express: "As long as you spend a minimum of £3,000 a year, almost every full pound you spend qualifies for cashback"

Look at how much Amex Everyday customers earn in cash back for a £300 per month spend, compared to how much Santander customers get for the same monthly expense.

Amex Platinum

The rewards don't improve that much at that kind of level of spending even for Amex Platinum holders - but at least the annual fee entitles holders to a much simpler rate of cash back:

Spending Cashback earned per year
Monthly Annual Total Minus £25 annual fee
£250 £3,000 £37.50 £17.50
£300 £3,600 £45 £20
£600 £7,200 £90 £65
£800 £9,600 £120 £95
£1,000 £12,000 £150 £125

With both Amex cards, users wanting to get rewards as good as Santander can offer really have to make the most of that first three months at 5% cashback - say by planning a couple of seriously large purchases - a holiday or furniture, for example.

And, as highlighted above, at the time of writing American Express say customers need to spend at least £3,000 on their card each year to qualify for cash back.

That's way more than £100 a month on a season ticket, which is all Santander cardholders need to start seeing money back.

The advantage of the Amex cards is that it's possible to earn more in cash back over the course of the year - even taking the Platinum's £25 annual fee into account.

Note also the "double cash back" deal Amex offer their Platinum card holders at the start of each new membership year if they've spent more than £10,000 in the previous one.

Narrow divide

There's no question which of the two providers is better for people who don't spend very much on their credit cards - Santander reward all their account holders, no matter how little they spend.

But people using their cards to spend more than £700 per month will find Amex a better deal in terms of cash back.

That brings us on to our final point. No matter how good the cash back, paying interest on spending will quickly wipe out any earnings.

Amex charge 22.9% APR (variable) from day one.

Santander put off the pain for a whole 23 months with an introductory 0% offer, but it's still worth getting into the habit of clearing the balance every month.

Here's a quick comparison of the important parts of each card, side by side:

Santander 123 Amex Platinum Everyday Amex Platinum
Annual fee £36 (£3 monthly) £0 £25
Purchase rate (variable) 12.7% p.a. 22.9% p.a. 22.9% p.a.
APR representative variable 16.5% 22.9% 28.2%
Introductory rate? 0% on purchases for 23 months no no
Cashback rates 1% on supermarket spend, up to spend of £300

2% on department stores, up to spend of £150

3% on transport spending, up to spend of £100
5% on spending up to £2,000 for first three months (up to £100 in total).

0.5% on spending up to £3,500;

1% on £3,500 to £7,500;

1.25% on spending over £7,501.
5% on spending up to £2,500 for first three months (up to £125 in total).

1.25% on virtually all spending

2.5% cash back in first month of each new year if spending in past 12 months exceeds £10,001
Cashback paid out Monthly Annually
Benefits No minimum spend

No foreign transaction fee
Amex Global Assist

American Express Invites

Extra purchase protection for eligible items

Interest rates and fees in the table above were correct at the byline date of this article.

Comments

1
2 June 2016
johandesilva

"Aldi and Lidl are notable by their absence." - eh! that's cos they don't take cards!

2
2 June 2016
johandesilva

"Travel spending is defined as such by where it's done: filling the car's tank may seem an obvious travel expense, but if it's done in a supermarket fuel station it will count as a supermarket transaction and only spark the 1% rate." - This is not true as I only top up at Supermarkets and get the full 3%.

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