Amex slashes cashback rates on market-leading cards

Customers with these cards will also find it harder to earn the top cashback rates, as American Express (Amex) has hiked its minimum spending requirements.

The new lower rates will apply immediately for new customers and be phased in for existing cardholders. The firm says it's changing its cashback rates to "remain competitive" as they hadn't been changed in seven years.

The announcement comes after Amex learned it would be hit by an EU cap on 'interchange fees' – the charges retailers pay to card firms when customers spend on debit and credit cards. It was initially thought the cap wouldn't apply to Amex's fees, but it was announced in March this year that in fact they would be capped as the firm's market share was more than 3% during 2015.

Other major card providers, including Capital One, RBS and Tesco Bank, have already scaled down cashback and loyalty point schemes, citing the cap. MoneySavingExpert.com has previously warned that attempts to cap interchange fees would see card providers reduce cashback and rewards, while retailers may simply pocket the savings.

What's changing for Amex customers?

If you've got an Amex Platinum or Platinum Everyday credit card, you'll get less cashback once the new lower rates kick in (see below for when this will affect you, as the date varies).

Cashback on the cards is paid according to how much you spend each year, with a higher percentage paid on spends over a certain threshold. In addition to scrapping the top 1.25% Everyday rate, Amex has raised the thresholds for higher cashback rates on both cards:

• On the Platinum Everyday card, only spends above £5,000 a year will get 1% cashback, when previously spends above £3,500 could qualify. Spending between £0 and £5,000 will get 0.5%, but the 'minimum spend' rule hasn't changed and remains in force – you must spend at least £3,000 in the year to get any cashback at all.

• For the main Platinum card, the top 1.25% cashback rate now only kicks in for spending over £10,000, when previously it applied to all spending. Spending below this figure earns a new lower rate of 1%.

For both cards the introductory 5% cashback in the first three months will remain (capped at £100 for Platinum Everyday and £125 for Platinum). But those with the standard Platinum card will also no longer get 2.5% cashback in their 'anniversary month' after their current membership year is over – previously, this was an extra bonus you got on spending at least £10,001 over 12 months.

Amex has confirmed that all existing Platinum cardholders will still get their anniversary bonus for their current membership year, but that will be the last one they get.

Both cards continue to charge 22.9% representative APR if you don't pay them off in full each month.

When do the new cashback rates kick in?

It varies according to when you got your card:

• New customers signing up from today (9 August) onwards will get the new lower rates straightaway.

• Existing customers who signed up between 22 August 2015 and 8 August 2016 won't see a rate change until "the second half of 2017", so will continue to enjoy the higher rates for the best part of another year. Amex says this is because "we want to give our newer card-members a fair amount of time to enjoy the cashback rate they signed up to".

• Existing customers who signed up on or before 21 August 2015 will get the new rates from 8 November this year.

Customers affected by these changes will receive a letter from Amex over the next few weeks.

The changes make it harder to earn the top level of cashback on both the Platinum and Platinum Everyday cards

Is it still worth having one of these cards?

While it's disappointing to see Amex cutting its cashback rates, we think these cards still deserve a place in our Top Cashback Credit Cards Guide - especially as it hasn't got rid of its market-leading 5% introductory rate.

If you're after a cashback credit card, both the Platinum and Platinum Everyday could still earn you £100s, as the tables below show. Those with Everyday cards who spend the minimum £3,000 a year won't actually see a difference to how much cashback they earn - it's the biggest spenders who'll lose the most from these changes.

There's no cap on how much cashback you can earn after the three-month 5% period is over (during this intro period it's capped at £100 for Platinum Everyday and £125 for Platinum), but we've shown how much you get when spending certain amounts.

If you're spending over £9,500 in the first year you'll earn more cashback from the standard Platinum in that year than you will from the Everyday - even with the £25 annual fee taken into account.

Amex Platinum annual cashback (including £25 annual fee)

Amex Platinum Everyday annual cashback

What's the cap on interchange fees?

As we reported at the time, a cap on interchange fees has been in place in the UK since 9 December 2015. It works like this:

• For all credit card transactions, fees are capped at 0.3% of the transaction value.

• When you use your debit card overseas, fees will be capped at 0.2% of the transaction value.

• When you use your debit card in the UK, fees will also be capped at 0.2% of the transaction value.

What does Amex say?

An Amex spokesperson told us: "We regularly review our cards to ensure they remain competitive and offer good value for our customers. However, we have not changed our cashback-earn rates for seven years.

"We took the decision to make changes to the earn rates rather than cap the amount of cashback you can earn or limit cashback to certain categories and types of spending like some other cashback cards on the market."

Additional reporting by Rosie Bannister.