Is the Amex EveryDay a 2% no-annual-fee cash back card in disguise?

I’m a big fan of the American Express customer experience – and I have plenty of company, seeing as Amex has topped the J.D. Power Credit Card Satisfaction Study in 11 of the 15 years it has been conducted.

I also gravitate toward cash back cards that don’t charge annual fees. Putting those things together, I really wish Amex had a no-annual-fee, 2% cash back card like several other card issuers.

Alas, the American Express Cash Magnet® Card* comes the closest. It gives 1.5% cash back on everything you buy, and it doesn’t come with an annual fee.

The Amex EveryDay® Credit Card from American Express* is a sneaky contender. It does not charge an annual fee, either, and it gives 2X points per dollar on U.S. supermarket purchases (up to $6,000 in annual spending, then 1X point per dollar after that) and 1X point per dollar on everything else. Card members get a 20% rewards bonus when they make 20 or more purchases in a billing cycle.

The kicker is that this card gives American Express Membership Rewards points rather than straight cash back. And each Membership Rewards point is worth an estimated 2 cents, according to CreditCards.com’s sister site, The Points Guy (TPG).

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That doesn’t translate to 2% cash back, however

Membership Rewards points are worth only 0.6 cents apiece when redeemed for statement credits that offset eligible purchases. They’re worth slightly more when you redeem at checkout with participating partners (0.7 cents apiece via Amazon.com, PayPal, Best Buy and others).

You can get 1 cent per point on many gift card redemptions but that’s still a lower valuation on most purchases than the 1.5% cash back payout on the Cash Magnet card. The best way to maximize Membership Rewards points is to transfer them to airline and hotel partners, which is why TPG values them at 2 cents apiece. That’s great for some people, but it doesn’t appeal to me.

Amex travel partners

If your travel plans are flexible and you’re willing to put in the work to research the best deals, your Membership Rewards points can really shine. While TPG says they can be worth 2 cents apiece, sometimes you can get even more value. I’ve heard of people getting $8,000 international first-class plane tickets for 100,000 points, which is a whopping 8 cents per point.

As a homebody with two young kids, I’m not a great candidate for that sort of thing. That’s why I prefer the simplicity and universal appeal of cash back. Even if I were tempted to use Membership Rewards for a lighter lift – domestic economy travel as opposed to international first-class – I don’t think I would be able to get 2 cents per point in value.

For example, when I’ve scoped out potential family trips on Delta (American Express’s only U.S.-based airline transfer partner), I typically see valuations less than 1 cent per point or mile. While it’s possible to book domestic flights via foreign-based airline partners, that’s more complicated, and it’s also unlikely to be worth 2 or more cents per point on trips I would take.

Amex has two U.S.-based hotel transfer partners (Hilton and Marriott), but my family tends to prefer home rentals when we travel. The Amex EveryDay is a solid beginner travel card. It just doesn’t offer what I’m looking for in terms of cash back.

My go-to cards

Right now, I’m splitting my purchases between the Blue Cash Preferred® Card from American Express and the Chase Freedom Flex℠ card. Even though the baseline on both cards is just 1%, I’m earning a blended average of about 2.3% cash back because I spend so much in bonus categories that give me 6%, 5% or 3% cash back on certain types of purchases. These two cards also offer solid purchase protection and extended warranty coverage.

As I mentioned, I considered the Amex EveryDay and decided against it because it’s best suited for travel rewards. I have also considered switching the bulk of my spending over to the Cash Magnet or a 2% cash back card from another issuer but for now, I’m earning a better return on my existing cards, even accounting for the Blue Cash Preferred’s $95 annual fee ($0 introductory annual fee for the first year).

Bottom line

Of course, your situation may be different. Especially if you’re interested in travel rewards, the Amex EveryDay is a compelling option because you can access more than a dozen airline and hotel transfer partners without paying an annual fee.

In some cases, particularly if you use your card at least 20 times per month and buy a lot of groceries, you’ll get more value from the Amex EveryDay than the Cash Magnet. Just make sure that you want travel rewards, because the Amex EveryDay isn’t a 2% cash back card in disguise. It’s about turning routine spending into future travel.

Have a question about credit cards? E-mail me at ted.rossman@creditcards.com and I’d be happy to help.

All information about the American Express Cash Magnet Card and the Amex EveryDay Credit Card from American Express has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy. These cards are no longer available through CreditCards.com.