Last week, I wrote a post about some changes that might be coming to two Amex credit cards. Amex sent out surveys to Everyday Preferred and Blue Business Preferred cardholders to gauge their interest in various new perks. But I have a feeling that American Express might change more than just perks for the Everyday Preferred Card. This post presents my predictions for the American Express Everyday Preferred Card in 2021.
Credit Card Overview
Furthermore, the American Express Everyday Preferred Card is one of three mid-tier options that earns Membership Rewards (MR) points. It’s also the only mid-tier option that’s a normal credit card. The American Express Green Card and Gold Card are charge cards.
American Express is currently offering a sign-up bonus worth 15,000 MR points for the Everyday Preferred Card. It can be earned by spending $1,000 within the first three months. Plus, cardholders can earn 3x MR points per dollar on groceries, 2x points on gas, and one point per dollar on non-bonus spend. Cardholders who use their card at least 30 times per month will receive a 50% points bonus on all purchases as well.
Unfortunately, Amex comes up short in the way of perks for the Everyday Preferred Card. This is especially true when comparing it to almost all mid-tier competitors. But Amex appears to be motivated to change that given last week’s surveys.
Moreover, my first prediction is an assumption that was pointed out in a comment by a reader named Brutus last week. He pointed out that I assumed that Amex will not raise the Everyday Preferred Card’s $95 annual fee. I responded to Brutus by saying that Amex would cannibalize its other products by raising the annual fee. For example, the Green Card has a $150 annual fee (NOT waived the first year). Plus, Amex has no other credit or charge cards that earn MR points at the $95 price point. That niche is currently held and will continue to be held by the Everyday Preferred.
Better Earning Structure
Furthermore, I predict that Amex will change the card’s earning structure. I predict that American Express will remove the 50% points bonus and 30 uses per month threshold. Amex will keep the 3x grocery store category, but they will remove the 2x gas category and replace it with a 1.5x category for non-bonus purchases. The 1.5x non-bonus category is like Amex giving cardholders the 50% points bonus without any thresholds to hit.
This new earning structure will also make the Everyday Preferred compete better with the Chase Sapphire Cards and the Chase Freedom Unlimited. It will also provide cardholders with long-term value and earnings with the 1.5x earnings on non-bonus spend.
Increased Sign-Up Bonus
Moreover, Amex will increase the sign-up bonus for the Everyday Preferred Card. It will be closer to that of the Green Card, but not as competitive as that of the Citi Premier or Chase Sapphire Preferred. I predict that the bonus will be 25,000 MR points for $1,000 within the first three months.
The bonus won’t be too large because of the potential long-term value from the card’s earning structure. But 25,000 points is still better than 15,000.
Of course, Amex will also add some perks to the Everyday Preferred Card. This was predicted last week after Amex sent out surveys to current Everyday Preferred cardholders. Most new American Express perks are in the form of credits that are intended to help justify annual fees. This is most notable on the Platinum Cards.
American Express will add a $25 annual credit for either select streaming services or one of the following companies:
- Home Depot
- Pay Pal
I would personally prefer a $25 annual credit for Target because it aligns best with my spending habits. But American Express will use the survey data and do further research before selecting a company. I also predict that this credit will be one annual $25 credit. Splitting the credit into monthly, quarterly, or semiannual credits would be impractical.
The American Express Everyday Preferred Card might be changing in 2021 after seven years on the market. Both Amex Everyday Cards were originally targeted towards “busy moms”, according to The New York Times (H/T). But its unique earning structure is no longer competitive, especially given the COVID-19 pandemic. Plus, Amex is not offering many notable benefits or a large sign-up bonus with the Everyday Preferred Card. These are key areas in which Amex could add some value.
I said last week that American Express can make the Everyday Preferred Card into something truly excellent in the wake of the COVID-19 pandemic. But how much will they change, if anything at all?