American Express entered the cash back credit card market in 2014 when it introduced its no-fee SimplyCash Card along with an annual fee card called SimplyCash Preferred. Today, Amex announced some changes meant to enhance the value of its SimplyCash Preferred Card. The feature most widely promoted will be its new 2 percent cash back rate on all purchases. What quietly changed is the annual fee increased by $20 and the amount of cash back you can earn during the bonus period has decreased by $100. Here’s what’s new and how it all breaks down:
New SimplyCash Preferred Card by American Express
As mentioned, the biggest change is that cardholders can now earn 2 percent cash back on every purchase in any category with no limit on how much cash back you can earn at 2 percent. A six-month introductory bonus period gives cardholders 5 percent cash back on all purchases in any category up to a maximum of $300 cash back ($6,000 spent during that period). The annual fee is now $99 (up from $79) and supplementary cards are free. Cash back earnings will continue to be applied to your account annually as a statement credit.
How much can you earn with this card? Let’s assume a new cardholder spends $2,000 per month on the SimplyCash Preferred Card in the first year:
- Bonus six months x $1,000 @ 5 percent = $300 cash back
- Bonus six months x $1,000 @ 2 percent = $120 cash back
- Remainder of the year x $12,000 @ 2 percent = $240 cash back
- Total cash back in first year = $660
Subtract the $99 annual fee and the new cardholder will have earned $561 in the first year – a nice 2.34 percent earn rate on your spending. In subsequent years, with no bonus period and just a straight 2 percent cash back rate, the cardholder will earn $480 cash back, and when you subtract the annual fee will be left with $381. That’s an average earn rate of 1.59 percent on your spending.
*It should be noted that existing cardholders will continue to pay a $79 annual fee. Former or current cardholders can apply for the new card, however they will not be eligible for the 5 percent welcome rate period.
Old SimplyCash Preferred Card
Prior to today, the SimplyCash Preferred Card from American Express came with a $79 annual fee and offered 1.5 percent cash back on all purchases. The six-month introductory bonus period gave cardholders 5 percent back on all purchases (any category), up to a maximum of $400 cash back ($8,000 spent during that period).
Someone who spent $24,000 per year on the SimplyCash Preferred Card would have earned $640 cash back in year one. Take out the $79 annual fee and they’re left with $561 in the first year – the exact same total as one would earn with the New SimplyCash Preferred Card.
In subsequent years cardholders that spent $2,000 per month would have earned $360 in a year ($281 after the annual fee). That’s $100 less than you can now earn each year with the new card. So for ongoing and everyday use, the New SimplyCash Preferred Card from American Express is definitely an improvement over the old version of the card.
How Does the New Card Stack Up?
The 2 percent cash back rate on every purchase also puts this card inline with the MBNA Rewards World Elite MasterCard, a card which also offers 2 points for every dollar spent and comes with an annual fee of $89, and is widely considered to be one of (if not the) best cash back credit card on the market.
The main difference between the two cards comes down to the welcome bonus: MBNA offers 10,000 bonus points ($100), while Amex offers the 5 percent cash back welcome rate (up to $300) for the first six months. If one can maximize the welcome rate on the SimplyCash Preferred Card ($1,000 per month in spending for six months) then the $200 additional cash back dollars earned will more than make up for the $10 per year advantage that the MBNA Rewards World Elite MasterCard offers after year one.
Overall the changes to the SimplyCash Preferred Card seem positive as it puts this card right back into the conversation for the best cash back credit card on the market (along with MBNA Rewards World Elite MasterCard and the Scotia Momentum Visa Infinite). As always, where you do your shopping matters and so if you shop regularly at retailers that do not accept American Express cards then this card isn’t for you (Costco and Loblaws stores come to mind).
Given the recent news of Tangerine downgrading its Money-Back Card, and Chase closing its Amazon.ca Rewards Visa to new applicants, this is a welcome change for the Canadian rewards credit card market and one that should be received positively from fans of cash back in particular.
One of the hidden gems in the Canadian rewards card space is now closed to new applicants. A statement posted on Amazon.ca says the application for this rewards card is no longer available:
As of April 3, 2017, we are no longer accepting applications for the Amazon.ca Rewards Visa Card and there is no other way to get the card at this time.
For customers who applied before April 3 and your Amazon.ca Rewards Visa Card application was approved, Amazon.ca will send you a welcome email and will automatically add your Amazon.ca Rewards Visa Card as the default payment card for any purchases on Amazon.ca. You will receive your paper Cardmember Agreement and physical card in the mail within two weeks of being approved. After that, you can use your card to make purchases wherever your Amazon.ca Rewards Visa Card is accepted.
If your application wan’t approved, you may be advised that you need to call Chase Cardmember Services to provide some additional information for your application. Otherwise, you will be informed of your application status after Chase has completed its review process, usually within 2 to 4 weeks after applying.
Amazon.ca Rewards Visa by Chase
The Amazon.ca Rewards Visa by Chase was unique in that it did not charge a fee when converting foreign currency purchases back to Canadian dollars. Nearly all Canadian credit card issuers charge 2.5 percent foreign currency transaction fees. This feature made the Amazon.ca Rewards Visa a popular choice for those who travel to the U.S. and abroad or shop online and deal in foreign currency.
While this news is sad for anyone that may have been interested in signing up for the Amazon.ca Rewards Visa, it’s also troubling for existing cardholders who are left wondering about the fate of their go-to card for foreign transactions and Amazon.ca spending.
Curious as a cardholder myself I logged-in to the Chase website and was surprised to see Scotiabank notifications on the home page.
Back in late 2015 Scotiabank bought from Chase what (at the time) was believed to be just its Sears MasterCard portfolio. Some recent activity from those 2 million cardholders suggest they will be transitioned to a new card called the Scotia Momentum MasterCard as of June 1st, 2017.
Could it be that Scotiabank also bought the Amazon.ca Visa portfolio from Chase? I called the number listed on the back of my Amazon.ca Rewards Visa, as well as a different number I found online under ‘Account Services’. Both numbers led to a Scotiabank call centre, but it was after hours and no representative was available.
The Chase.ca website didn’t provide any additional information. Indeed, the Amazon.ca Rewards Visa application seems to be closed. No word on whether its only other rewards card offering – the Marriott Rewards Premier Visa card – is also closed to new applicants.
In any case, at first blush this looks like Chase will be exiting the Canadian credit card market and handing over the reigns to Scotiabank. And that doesn’t bode well for existing Chase cardholders.
*Update from Scotiabank*
After another phone call to the call centre, where I asked whether I was calling Chase or Scotiabank, the agent admitted that it used to be a Chase call centre but it was purchased by Scotia in 2015, along with a number of other credit card assets.
I reached out to the Scotia credit card team and this is what they had to say:
Scotiabank acquired the MasterCard and private label credit card portfolio and the related credit card operations from JPMorgan Chase, formerly associated with Sears Canada Inc. The acquisition did not include the Amazon portfolio from Chase or the Marriott Visa portfolio.
Our acquisition also included the acquisition of JPMorgan Chase’s credit card operations in Canada, including a highly-skilled bilingual call centre in Ottawa with fraud, collections, recovery and customer service expertise. Through that call centre, we are now servicing the customer base of JPMorgan Chase’s other cards in Canada.
Operators are trained to recognize Scotiabank customers and other JPMorgan card holders by the incoming call and to answer the phone with a greeting tailored to that call. In this instance, the operator made a mistake with his or her greeting to you.