American Express this morning introduced the new Cash Rebate Card.
Cash Rebate of up to 5% – The cash reward is based on customer spend and payment behaviors. The annual cash reward for purchases is up to 3%. There is an additional rebate of up to 2% for purchases in months in which the account carries a balance. An account is eligible for a rebate applied to a maximum of $50,000 of eligible annual spending.
American Express is uniquely positioned to be able to offer the highest cash rebates to consumers — should this become a new industry battleground — because, all other things being equal, Amex’s higher merchant discount provides more revenue than that achieved by the other card brands. Discover, long the leader in the rebate card category, is likely in the worst position (from a P&L perspective) as its merchant discount is typically the lowest of the card brands.