American Express Cash Magnet® Card review: Great for simple spenders

As far as flat-rate cash back cards go, the American Express Cash Magnet Card was a relatively standard option. The 1.5 percent cash back rate is par for the course, but it doesn’t carry any features outside Pay It Plan that distinguish it from more rewarding options like the Chase Freedom Unlimited®.

The Freedom Unlimited offers: 

• 5 percent cash back on travel purchased through Chase Travel℠
• 3 percent cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service
• Unlimited 1.5 percent cash back on all other purchases

Plus, the Chase Ultimate Rewards Points it earns are much more valuable and versatile in the long run than Amex’s Blue Cash Reward Dollars.

If you’re hoping for Amex perks and want a cash back card for your specialized spending, you might consider some card options with specific bonus categories. The Blue Cash Preferred® Card from American Express is like an Amex Cash Magnet upgrade. It has higher cash back earning potential for cardholders who spend heavily at U.S. supermarkets. 

You earn 6 percent cash back at U.S. supermarkets on up to $6,000 in transactions each year. After that, you’ll earn 1 percent. You also earn 6 percent back on select U.S. streaming services, 3 percent back at U.S. gas stations, 3 percent back on transit and 1 percent cash back on all other purchases. 

These reward rates cater to routine spenders who regularly shop at supermarkets, enjoy streaming services and drive often. Although your rewards for all other purchases will accrue slower than rewards for all purchases with the Cash Magnet, the boosted category rewards rates can very quickly offset the difference between 1 percent and 1.5 percent cash back rates.

The Blue Cash Preferred card is an excellent option to maximize your rewards if you’d like to stick with American Express cards, as these two cards can complement each other effectively. The Blue Cash Preferred card offers generous cashback rewards on everyday spending categories such as groceries, gas, and streaming services, while the Cash Magnet card provides a consistent flat-rate cash back on all other purchases. 

By using both cards strategically, you can take advantage of the Blue Cash Preferred's higher reward rates in specific areas and the Cash Magnet's flat cashback on other expenses. 

If you’d like a lower-cost card, the Preferred card’s no-annual-fee sibling, the Blue Cash Everyday® Card from American Express, is another solid pick. The Blue Cash Everyday® Card offers high cash back rates on select categories such as supermarkets, gas stations and select online retail purchases. This combination allows you to optimize rewards potential across a wide range of expenses, making it a great pairing if you want to maximize cash back earnings for no annual fee.

The primary criteria for a rewards or cash back card’s rating is its rewards value. This includes the card’s average rewards rate, estimated annual rewards earnings, sign-up bonus value and reward redemption value.

To estimate a card’s average annual rewards earnings, we first calculate its average rewards rate based on how much it earns in different bonus categories and how closely its categories align with the average person’s spending habits, according to the Bureau of Labor Statistics (BLS).

The most recent BLS data estimates average total spending in 2023 was $77,280 per consumer. We then narrow our focus to which purchases are likely to be put on a credit card and earn rewards, subtracting expenditures like housing, vehicle purchases and education. This gives us a total “chargeable” annual spend of around $22,500.  

Some of the major spending categories that contribute towards the annual spend include:

• Groceries: $6,000
• Dining out: $3,900
• Entertainment: $2,500
• Gas: $2,400
• Apparel and services: $2,000

Using this data, we assign a weighting to each of a card’s bonus categories. For example, a card’s grocery rewards rate receives a 26 percent weighting based on how much of the average person’s budget is spent on groceries. We also estimate the redemption value of points or miles from various issuer, airline and hotel rewards programs.

This weighting and rewards valuation allows us to estimate a card’s average annual rewards earnings — how many points or miles you’d earn with a given card if your spending was about average and you used the card for all of your purchases, as well as what those points are worth. We also use point valuations to determine a card’s sign-up bonus value.

With these calculations complete, we assign each card a score based on how its average rewards earnings, sign-up bonus value, rewards rate and redemption value stack up against other rewards cards.

We also rate cards based on how much it costs to keep them in your wallet or carry a balance. 

To start, each rewards or cash back card is scored based on whether it offers an intro APR and how its ongoing APR compares to the rates available on other rewards or cash back cards. 

We also score each card based on how its annual fee influences its overall value. 

We consider a card’s annual fee in two ways — how it ranks relative to the fees you’ll find on other cards in the category and how it impacts a card’s overall rewards value. Cards with an annual fee will always be at a slight disadvantage in our scoring system since annual fees inherently cut into your rewards value, but if a card offers terrific value via its ongoing rewards and perks, it can earn a high score even if it carries a high annual fee. 

With this in mind, we rate a card based primarily on how its ongoing rewards value and ongoing perk value (such as annual credits or bonuses) stack up against other cards in the category when you subtract its annual fee.

We rate each card’s flexibility based on the restrictions it imposes on earning and redeeming rewards and factor this rating into a card’s overall score. 

Flexibility factors include whether a card only allows you to earn a high rewards rate on a small amount of spending or requires you to meet a certain earning threshold before you can redeem rewards. We also examine whether your points are worth less when you redeem for some options versus others and whether a card gives you the flexibility to transfer rewards to airline and hotel partners.

We also score each card’s set of features – its perks and benefits — against five tiers of features to provide a rating. 

We break down these tiers as follows:

• Tier 1 has less than standard card features (an ultra-streamlined card that offers basic utility and next to nothing in the way of ancillary benefits. 
• Tier 2 includes the benefits you’d expect on standard Visa or Mastercard credit cards, such as free access to your credit score, car rental insurance and $0 liability for fraudulent charges. 
• Tier 3 includes “prime card” or better-than-average card features like cellphone insurance, lost luggage insurance, concierge services and purchase protection. 
• Tier 4 includes luxury features such as airport lounge access, elite status with an airline or hotel and credits for expedited security screening membership programs. 
• Tier 5 includes the sort of exemplary benefits you’ll find on top-tier luxury cards, such as high-value travel credits, cardholder memberships and other unique and valuable perks.

The benefits of the American Express Cash Magnet Card include earning unlimited cash back on all purchases at a flat rate, no annual fee, a welcome bonus for new cardholders as well as access to Amex benefits such as roadside assistance and insurance coverage.

American Express does not explicitly disclose a minimum credit score requirement for the Cash Magnet Card, but it is generally recommended that applicants have a good to excellent credit score of 670 or higher to be considered for approval. Other factors such as income and debt-to-income ratio may also be taken into account.