American Express has just launched a new product for consumers in the United States, and I think this could be pretty interesting… maybe?
American Express Rewards Checking basics
American Express Rewards Checking launched today, and it’s described as Amex’s first-ever consumer checking account for U.S. consumers with debit features. Here are some of the features of this new product:
- The checking account offers a 0.5% APY
- The debit feature offers the ability to earn one Membership Rewards point for every $2 of eligible debit purchases
- Membership Rewards points can only be redeemed for deposits into your checking account, unless you have another card earning Membership Rewards points, in which case they could be redeemed the same way as there (meaning you could potentially transfer them to airline & hotel partners)
- This is integrated into the Amex app, so that you can manage this checking account along with all of your other Amex accounts
- This offers enhanced purchase protection, including zero liability fraud protection
- There are no fees or minimum to open an account, and no monthly fees
- This account is currently only available to those who have had a U.S. consumer card for three or more months
This is a pretty logical direction for American Express to take. Historically Amex has just been focused on being a card issuer, but it’s easier to have a more comprehensive customer relationship if there’s also a checking account option. And this is arguably a good time to get into this space, as younger people are totally fine with exclusively banking digitally.
Is Amex’s new checking account worth it?
Is American Express’ new checking account product valuable for savvy consumers? I have a few initial thoughts.
First of all, while a 0.5% APY is significantly better than the national average, it’s not the best out there. For example, I’d much rather use Bask Bank, which offers either one AAdvantage mile per dollar deposited annually, or a higher APY. But the reality is that Amex has name recognition and a lot of people will want to keep things simple and extend their relationship with Amex, so this product will likely be popular.
Next, we’ll have to collectively do some more digging here, but it seems like spending money on the debit card could be pretty lucrative:
- It’s rare to see a decent rewards structure on a debit card, since the fees are capped; so if you have the option of paying by credit or debit card at the same cost, you should almost always pay by credit card, as it’ll be much more rewarding
- That being said, some merchants accept a debit card but not a credit card, or have a much lower fee for paying by debit card; for example, pay1040.com lets you pay taxes by card, and the fee is 1.87% for a credit card transaction, or a flat $2.50 for a debit card transaction
- There are lots of other services that allow debit card payments but not credit card payments, and this could be invaluable for those situations
- We’ll have to see how this unfolds and which merchants accept Amex debit cards, but I feel like there could be some potential value there?
American Express has launched a new online checking account product that comes with a debit card. This is a no fee product, and it’s available to those with consumer cards. The account offers a 0.5% APY, and more interestingly offers one Membership Rewards point for every $2 spent, making it one of the most rewarding debit cards out there.
It’s rare to see debit cards with a lucrative rewards structure, so my first instinct is that this product could be extremely lucrative for situations where you can pay by debit card but can’t pay by credit card (or where the fee is much lower, at least).
What do you make of the new American Express Rewards Checking product?
Just got the debit card. Tried to use it to pay my mortgage and car payment (through Toyota) through PayPal bill pay. Entered the debit card info, but it kicked me back to my checking account for the funds. Was hoping the debit card would work!
Does Amex do a hard pull when shooting for this checking account ? ( I have a credit card with them since 2014)
I was reviewing your post about the new Amex rewards checking. I applied and was approved for one. I now find that it doesn’t offer free checks like other online checking accounts. It directs me, when I order new checks, to a Harland-Clarke website which charges about $18.00 for 80 checks.
Just thought you might update your viewers with this information when they compare new online checking accounts.
Opened the checking account and just got the debit card in the mail. Tried using it on pay1040.com. The convenience fee was 1.87% not $2.50. I don't think this debit card is going to work for taxes/mortage/insurance/utilities etc. Bummer. Has it worked for anyone else?
@Travel Free, thanks for trying this out and reporting back. Your potential use case was the only reason I was considering the AmEx checking account. If the card runs as a CC (ie no PIN) I now understand how AmEx is able to offer the rewards structure, but it also makes it useless for saving CC charges on payments like Fed Taxes, etc.
It does not seem like a good option for writing checks since you have to pay for the paper checks and you cannot deposit cash like you can with a brick and mortar bank's checking account/ATM. It seems to be nothing but a ATM card.
Why is 1 point for every 2 dollars spent regarded as one of the "most rewarding"? I'd say it was among the least rewarding. A decent card should be 2% cash back. This is 0.5%.
It is "most rewarding" for being a debit card, as most debit cards don'y provide any rewards.
Do these "debit" transactions actually process as debit or credit? Obviously amex would pull the money out of your account right away, but to be able to fund both high-interest and a rewards structure, I'd be worried that "eligible transactions" would exclude any that process as debit. This would damage usefulness for things like utility bills, rent, etc.
I am seriously considering this, to pay taxes, utilities, insurance, and especially Venmo. Earning MR points, even at 1:2, without paying fees makes sense to me. I might wait, though, to see if Chase/Citi/CapOne come up with a competing product.
For the Bask Bank AA miles, do those now count to AA premier status?
could be a good way to pay taxes at a good price and get some points
Do they offer online bill payment and actual check writing service options? It looks like from the description, that it is only a debit card transaction service.
I’ve had an American Express savings account for a few years. It also offers 0.50%. API but it doesn’t give any miles. I would like to know if this savings account could be linked to the new checking account.
I had the same question and actually just had to go look at the current rates over there. Since savings accounts often get higher interest rates than checking, it will be interesting to see if the two stay the same.
It looks to be Bluebird 2.0
this may help some utilities & insurance only draft out of a checking account, at least getting 0.5 miles per $ instead of nothing
Lucky do the AA miles earned from Bask Bank count towards status?
Do we know if it’s a hard pull to open?
It's not a hard pull since it's not a credit card..and it's only for current amex card holders who are in good standing. So they already have all if your info when you sign up...no hard soft or hard pull on your credit...I signed up earlier this morning.
I opened this account today and did not get a hard pull.
In a way, this seems like a short step beyond the Serve Card. I doubt whether this will be of any meaningful utility for anyone who needs more than the absolute basics. The same applies to its Kabbage offering.
I couldn’t find it in the press release or in terms and conditions. Any word on whether EFT debits, like, say, my mortgage payment, would earn points since the debit is not off the physical card? (I assume not)
Interesting for the ability to make tax/rent/other payments by debit card for points in situations where the fee for credit card payment is high, but not much else.
For me, tax payment and earing points are the major reason for signing up. Any data point? Thank you.
I have a relative who is an authorized user on my Amex Platinum card as he is rebuilding his credit. Would he be able to get the debit card if he isn't a primary card holder?
"You must be the primary Card Member (..)"
Every time I have tried to use online or other alternative checking accounts, I always go back to Chase (tons of ATMs and branches) with Schwab (ATM reimbursement) and Ally (same thing) augmented
This is my exact same setup.
If Amex had ATM reimbursement I would probably switch from Schwab.
Very interesting, I'm definitely going to look into it. I already have a high yield savings account with them, and I've used other Amex financial products before (like small personal loans) so I could be on board with having my checking with them. The only hesitation is that I'm otherwise with Chase, and I'm concerned that shutting down my checking account there will make it harder for me to apply to Chase credit cards later...
Very interesting, I'm definitely going to look into it. I already have a high yield savings account with them, and I've used other Amex financial products before (like small personal loans) so I could be on board with having my checking with them. The only hesitation is that I'm otherwise with Chase, and I'm concerned that shutting down my checking account there will make it harder for me to apply to Chase credit cards later (and I'm not going to pay a monthly fee with Chase to keep my account open if I'm not using it).
...this is a good back up/secondary checking account to have ....which is what I'm using it for.
Direct deposit should keep the basic Chase checking account free; split your pay check, pay your Chase cards with it and transfer the rest out :).
Probably too early to say but IMO gaming this is suicidal, AMEX FR is no joke, and I am not putting my MR balances on the line.
will it be accepted at Costco ?
would there be bonus points for a high balance?
Interesting concept. I'm going to have to look into it more.
Can't wait for people to game it using MS and ruin it for the rest of us, though.
My only concern is a lack of atms. There are moments in life where cash is needed.
Maybe they'll reimburse ATM fees, like Schwab does? If so, that would get my business.
No ATM reimbursements. However the are offering surcharge-free access at 37,000 MoneyPass ATNs.
You can use MoneyPass ATMs. And if you set the ATM search filter to "No fee ATMs," you will find free ATMs for your zipcode.
Hmm, looks like every Sheetz and Han Dee Hugo has a MoneyPass ATM.