NEW YORK - American Express Co. said Monday that it has introduced a credit card offering cash rebates of up to 5% - with a catch.
The catch is that a cardholder who does not revolve balances gets only 3%.
Either way the reward rates on the American Express Cash Rebate Card are higher than those on the Discover Card from Morgan Stanley, which has a registered trademark on the term "Cashback bonus" and uses the card's reward program as the central premise of its value proposition to consumers.
In the American Express program, the rebate rate varies depending on how much they spend, where the money is spent, and whether or not there is a revolving balance. The card offers higher rebates on "everyday" purchases, including those made at grocery stores, gas stations, and home improvement stores.
The card will be pitched to consumers primarily through direct mail. It builds on a similar product, launched in 1998, that did not include the revolving feature and offered smaller rebates.
The new card has no annual fee and offers 0% interest on purchases for the first six months and an ongoing rate of prime plus 4.99% to 12.99%, depending on the applicant's credit history.
"Consumers want to get something back for the money they are spending on their credit cards," said Larry Sharnak, a senior vice president of consumer lending at American Express.
