American Express is set to stop paying cashback for spending under £25 from 1 March 2014, a move that will force consumers to spend at least £4,250 per year to avail cashback from its credit card.
The new rule, which was confirmed by the company’s spokesman, will apply to American Express Platinum Cashback cards that were issued before August 2009.
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The move by American Express follows the recent withdrawal of Aspire World card by Capital One and the withdrawal of cashback card by Barclaycard.
Experts were quoted by The Telegraph as saying that benefits are being reduced to account for EU legislation that will cut card providers’ profits by £2.4bn by capping the fees charged to shops and restaurants on each transaction.
The Platinum Cashback card, which costs £25 per year, pays 5% cashback on up to £2,500 of spending for three months, and then pays a flat 1.25% thereafter.
Additionally, American Express also offers the Platinum Cashback Everyday card that pays 5% cashback for the first three months for up to £2,000 of purchases, following which the cashback is calculated between 0.5% and 1.25%, depending on the amount spent.
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By GlobalData
