At what point do the American Express wallets pay off the subscription and wallet costs? When do they become profitable? How profitable?


#1

If your primary usage of the Curve card was to be able to use your American Express at more retailers you probably want to understand the economics of each of the wallets.

Unfortunately my understanding is that the economics of a Blue or Black Curve card are pretty bad.

Bear in mind that these calculations are slightly different depending on the earning rate of your card (Premium Plus would be an exception since it earns 1.5 avios rather than 1 avios/point).

Anyway, here goes…

If you have a Blue Curve Card or Grandfathered Black Card?

Since the cost of loading money into the card is 0.65%, that means that if you load £100 into the card it will cost your 65p.

American Express cards generally offer 1 point per £1 of spend (with all of these calculations, I’m assuming an American Express Platinum — the actual earning rate depends on the card). At best you will probably get roughly 1p out of every 1 point (see: https://www.headforpoints.com/2018/12/03/what-is-the-best-use-of-american-express-membership-rewards-points-2/).

Therefore, normally spending £100 will get you 100 points, and this is roughly £1. However, in this case we need to subtract 65p from this since you must pay the cost of “loading” into the Curve card, and once this has been done it turns out that £100 of American Express spend produces only 35p of reward point value.

To illustrate why this is bad with a comparison, there are a number of non-Amex cashback credit cards on the market which offer 0.5% cashback (e.g. https://tandem.co.uk/credit-card). These make you 50p for every £100 you spend, while an Amex behind a Curve Blue card will make you only 35p (and this is also not fungible or earning interest).

What about a Curve Black card?

This will cost you £120 a year and provide a number of other benefits which you may or may not want. If you spend the maximum amount of free Amex a month, you will get 12,000 points. If you spend these points carefully you will get £120 for them. Since that’s the cost of the Curve card, you will just about pay it off, and any spend over this per month will earn reward at 0.35p per pound (worse than a cashback card).

What about a Curve Metal card?

This will cost you £150 a year (if you use the annual payment option) and provide a number of other benefits which you may or may not want. Since this offers unlimited Amex spend, you will need to spend £15,000 to break even. However, as you might know there is a limit of £50k annual spend on a Curve card. Therefore, that is £35k which you can earn unencumbered points on (35,000 points will be approximately £350). It’s a shame that there is an annual limit, because at this point you are making more money than you could via other non-Amex cards.

When does it make sense?

It might make sense if you value the other rewards of the black/metal card highly.

It makes sense if you have the metal card and are spending significantly more than £22.5k a year on it (remember that because a 0.5% cashback card would make £75 on £15k and an Amex makes roughly £75 on £7.5k, you will need to spend at least £22.5K before you have made more money than using a free cashback card would have made you, and it’s the extra £12.5k on top of this in which you would have a higher earning rate).

It also makes sense if it helps you to reach a spending goal on the American Express which you otherwise wouldn’t reach. For example: to get a 2-for-1 voucher.

Finally, it might makes sense if you are able to put any large bills through with it (HMRC Self Assessment, VAT, etc), which otherwise wouldn’t accept American Express.


What benefits would make the new Curve Black and Curve Metal worth it?
Higher limits
#2

Would like to point out that this is if you use your points to its BEST potential. If you go for vouchers or gift cards which is 1 point = 0.5p. You are clearly making a negative 0.15 loss by spending on curve. (5000 points for £25 gift cards)

To break even on metal if you dont use the points properly. You will need to spend £30,000.

Not saying everyone will use their points at the worst possible value. But bear in mind if you do, you are making losses


#3

Grandfathered black is ideal for me. I tend to churn cards and look for the fastest way to hit spend bonus and 241 vouchers. In my scenario, the return is higher than 1 point per pound :slight_smile:


#4

As a non-Amex user the whole “getting the most out of your card” thing, if you’ll excuse me saying, feels like an industry in itself. Is it really that attractive a proposition?

(A genuine question, by the way…:thinking:).


#5

Excellent opening post. Thanks.

I have the Amex Cashback card which gives 1% cashback upto to 10k I think and 1.25% thereafter. Its fee is £25 per year plus the £150 for the Metal it comes up to £175.

It definitely works well if you plan on spending 50k a year on your Amex. I don’t think I am anywhere near it yet but I think I can spend min 30k a year as try to put all my payments through my Amex. Also I cover the cost of the card through some decent offers that Amex offers now and then.


#6

I believe using Curve would help reduce foreign exchange costs when it comes to Amex which would be beneficial. In general, their cards tend to have a 2.99% exchange fee which would wipe out any rewards earned from spending. Having foreign transaction fees reduced to as little as 0.65% (just the load fee) would be great.

Unfortunately transactions on the weekend raise the costs to 1.15% at minimum (GBP, USD & EUR underlying cards). If you have to pay the 0.65% load fee, the 1.5% weekend fee and 2% foreign exchange fee for being over the free allowance, any savings and rewards end up leaving you with a loss of 0.15% in comparison to just using Amex.

On a sidenote, I’m having trouble keeping everything straight. There’s a lot of variables and limits involved when it comes to when fees get charged (ie.monthly fee, Amex load fee, foreign transaction fee, ATM withdrawal fee, fees for credit card use at the ATM & weekend foreign transaction fees at 2 tiers). I think that’s all of them, but it’s getting quite hard to remember and understand, especially the threshold for fees when using a credit card at an ATM (not sure if we got an answer to that one yet).


#7

Amex Plat is dreadful for ongoing spend - I only value MR points at 0.75p anyway (same as Avios) so definitely wouldn’t use it linked to that. For BAPP the earn rate is a bit better but agree still a bit marginal.

Personally (and given recent events this is perhaps academic now anyway!) I’d only use Amex via Curve for trying to hit spend/voucher targets where it was proving difficult at retailers that accepted Amex.