Why you’re best off avoiding the Amex Basic Card…
Over the last 12 months we’ve reviewed over 90% of the credit cards offered by American Express. Whilst the American Express Basic card doesn’t offer the ability to earn air miles, for completeness and as a reference guide, we’ve set out below our full Amex Basic card review and highlight why you would be significantly better off avoiding the Basic American Express card.
As always we’ll start off with some of the boring but important bits of the American Express Basic charge card… The Basic American Express card is issued directly by American Express as a charge card. This means that it needs to be paid back in full at the end of each month unlike a credit card where you usually only have to make a minimum payment and will be charged interest on the outstanding balance.
The card is the only American Express to be offered completely free of charge. However as we’ll discuss later in this article there are credit cards which waive the fee for a set period of time and offer market-leading perks! Talking of perks, let’s take a look at the benefits offered by the American Express Basic card…
Let's break this post down...
The Benefits (or lack of!) of the American Express Basic Card UK
Unlike other American Express charge cards, it’s difficult to find any benefits of the Amex Basic card besides the fact that there’s no annual fee as well as no spending limit…
There is no sign-up bonus and no reward benefits to encourage customers to spend on the card. As an American Express customer you will have access to American Express Invites which claims to offer advanced releases of various ‘in demand’ events. In reality the selection of events isn’t great and as such I wouldn’t really class this as much of a benefit.
The only other benefit, and this applies to all credit cards including the American Express Basic card, is buyer protection on purchases above £100 and below £30,000. The same is not true for a debit card. Ok, you’re right I’m clutching at straws now…
Anything else I should know about the Amex Basic Card?
There is no longer a minimum income requirement for either the American Express Basic Card UK or other American Express issued cards.
As we’ve recently discussed in this article, American Express has made some radical changes to the sign-up bonus rules for all cards. Whilst you will not earn a sign-up bonus with the Basic American Express card, by applying for the card you’ll rule yourself out of a sign-up bonus on any of the other personal American Express credit cards for a 24-month period. As we’ll see later in this article, by signing up to the American Express Basic card you’d be missing out on benefits worth well over £100 offered by other Amex credit cards.
What are the Alternatives?
So let’s now take a look at some of the alternative credit cards available in the UK market.
This is currently my favourite credit card and one which I’d recommend to the vast majority of readers.
The card is free for the first year after which the crafty people at American Express begin charging £140 pa. I’d recommend cancelling before the end of the first year as the ongoing benefits rarely offset the cost of the card…
New customers will receive a sign-up bonus of 10,000 Membership Rewards points when they spend £3,000 on the card in the first 3 months. As we’ll touch upon later in this article, these points can be worth anywhere in the region of 0.5p-1p and as such the sign-up bonus could be worth up to £100! You can benefit from an enhanced sign-up bonus of 12,000 points by being referred through this link.
You’ll also receive 1 point for every £1 spent on the card as well as 2 free airport lounge passes. When compared to the very limited benefits of the Amex Basic card, the choice of the Gold card over the basic American Express card should be a no-brainer. Just don’t forget to cancel the Gold card before the free 12-month period is up…
This cashback card is ideal for those who don’t want the hassle of having to redeeming points and would rather just be rewarded in cash (although this is only paid once a year). Whilst there are two versions of this card, we’d recommend the premium version which comes with an annual fee of £25 pa and can be offset using this link.
The card offers 5% cashback on the first £2,500 of spending with 1% on spending up to £10,000 and 1.25% on anything above this level.
The free version provides slightly reduced cashback earning rates with a £10 bonus for signing up using this link, 5% cashback on the first £2,000, 0.5% cashback up to £5,000 and 1% on anything above £5,000.
Whilst this card comes with a whopping annual fee of £575 pa, it amazingly also offers great value for money for a small number of people. If you travel regularly, the unlimited airport lounge access, free international travel insurance, hire-car insurance and elite status with numerous hotel groups could be worth significantly more than the annual fee.
In addition you could earn a sign-up bonus of 30,000 points when you spend £4,000 on the card in the first 3 months and 1 point for every £1 spent on the card. The sign-up bonus can be increased to 35,000 points using this link.
What are the best uses for the points earned?
As we discuss in full here, the value of an American Express Membership Rewards point can vary significantly depending on how they’re redeemed.
Worse case would be to redeem points against your credit card statement at a rate of 0.45p per point. TIP – using the Amex Shop with Points feature tends to provide poorer value than this. As such buy the item on your card and then use your points to write off the credit card’s balance.
A slightly better option would be to redeem as vouchers at a rate of 0.5p per point. This still isn’t great though.
Hotel redemptions range in value from approximately 0.6p if redeemed through the Hilton Honors programme to as much as 1.5p if used with Radisson rewards.
Flight redemptions also offer good value for money, with the standard British Airways Avios redemption generating a value between 0.75p and 1.25p. I recently achieved 3.2p per point on a Club Europe flight to Edinburgh which I was particularly pleased with!
Summary – Basic American Express Card Review
As we’ve seen during this American Express Basic card review, there are currently far better options for an alternative American Express credit card which offer sign-up bonuses and reward you for continuing to spend on the card. Plus with recent changes to the American Express sign-up bonus rules you could be putting yourself at a significant disadvantage by signing up to the Amex Basic card…
For most people we’d recommend the Amex Gold credit card which comes with a strong sign-up bonus of 12,000 points (if you use this link) and a good ongoing earning rate. We would however recommend you cancel after the first year.
If you’re looking for inspiration as to how to use your American Express Membership Rewards points you may find our recent British Airways First Class review interesting where we used three American Express cards to earn enough points in less than a year for 2 First Class flights. It also includes a handy step-by-step guide to help you experience First Class for less than the cost of an economy ticket!
As always we hope you’ve found this Amex Basic Card Review useful and we’d love to hear your thoughts in the comments section below.