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The Flagstar Cash Rewards American Express Card is a cash back credit card with no annual fee. It has a straightforward, tiered cash back system in the mold of BankAmericard Cash Rewards Credit Card and American Express Blue Cash Everyday, both of which also offer 3% maximum cash back in their top-earning rewards categories. If you spend moderately to heavily on gas and groceries, as millions of American consumers do, this card is worth a closer look.

Though it’s not as well-known as those cards (or their issuers), Flagstar Cash Rewards American Express Credit Card is certainly legit: it’s backed by Flagstar Bank, a Michigan-based deposit institution with strong online banking capabilities, plus a network of physical branches scattered throughout the Midwest and South.

Aside from its solid cash back scheme, Flagstar Cash Rewards American Express Credit Card has some other noteworthy benefits, including a 6-month, 0% APR introductory purchase and balance transfer promotion, as well as a nice lineup of traveler-friendly fringe benefits backed by American Express.

In the market for a new cash back credit card? Here’s how Flagstar Cash Rewards American Express Credit Card stacks up against the competition.

Key Features

Sign-up Bonus

After you make your first purchase, you get a one-time cash back bonus of $25. There’s no minimum or maximum purchase size.

Earning Cash Back

Flagstar Cash Rewards American Express Credit Card earns 3% cash back on gas purchases, up to $6,000 in annual gas spending. It earns unlimited 2% cash back on supermarket purchases and unlimited 1% cash back on all other purchases, including gas purchases above the $6,000 annual category spending cap.

Cash back accrues as Rewards Points, which are valued at $0.01 apiece when redeemed for cash back. Flagstar imposes no caps or restrictions on how many points you can earn, but points do expire 5 years (60 months) after they’re earned.

Redeeming Cash Back

You can redeem points for cash back deposits into a checking or savings accounts, or statement credits against your Flagstar Cash Rewards American Express Credit Card balance.

Introductory APR

Purchases and balance transfers accrue no interest (0% APR) for 6 months following the day you open your account – a useful tool if you’re trying to get out of credit card debt fast.

Regular APR

Once the introductory APR period ends, this card’s purchase and balance transfer APR rises to range between 13.49% and 24.49%. The exact figure varies based on prevailing interest rates and your personal creditworthiness. From day one, the cash advance APR is set at 24.49%, but can vary thereafter with prevailing rates. There is no penalty APR.

Important Fees

There is no annual fee. The foreign transaction fee is 2% of the transaction amount for dollar-denominated purchases and 3% of the transaction amount for purchases denominated in foreign currencies. Cash advances cost the greater of $5 or 3% to $20 or 4%, depending on how they’re executed. Balance transfers cost $5 or 3%. Late payments cost up to $37, while returned payments cost up to $35.

Overdraft Protection for Flagstar Bank Deposit Accountholders

Flagstar checking account holders can take advantage of this card’s optional overdraft protection coverage.

Checking account transactions that would normally result in negative balances are automatically and immediately offset by cash advances from Flagstar Cash Rewards American Express Credit Card’s cash advance line. That allows charges to go through as intended. Each such transaction comes with a $10 fee charged to the cardholder’s credit card account.

It’s important to note that overdraft cash advances start to accrue interest immediately after they’re executed, so cardholders are advised to pay them off as soon as they have funds available.

American Express Cardholder Benefits

Flagstar Cash Rewards American Express Credit Card offers an impressive palette of American Express-backed fringe benefits for all cardholders. Some of the most noteworthy highlights include:

• Complimentary extended warranties on items with existing warranties of one year or less
• Complimentary loss and damage insurance on rental cars purchased in full with the card
• Exclusive access to coveted entertainment tickets
• Return protection (refunds) for certain items purchased in full with the card

Credit Required

This card requires good to excellent credit.

Advantages

1. No Annual Fee. This card has no annual fee. If you’re a relatively light spender or simply don’t think you should have to pay a recurring fee to use a cash back credit card, you’ll appreciate this perk. Some competitors, including Flagstar Visa Bonus Rewards PLUS Card and American Express Blue Cash Preferred Credit Card, charge $50 to $100 per year.
2. Up to $120 in Annual Bonus Cash Back on Gas Purchases. Flagstar Cash Rewards American Express Credit Card earns 3% cash back on gas purchases, up to $6,000 in annual category spending. Used to the fullest, that’s good for $120 in extra cash back on gas spending, over and above the $60 in baseline cash back earnings on all spending. As long as you don’t spend significantly more (in which case an unlimited-earning gas credit card makes more sense) or less than $6,000 on gas each year, this is a great deal.
3. Unlimited 2% Cash Back on Supermarket Purchases. Flagstar Cash Rewards American Express earns unlimited 2% cash back on supermarket purchases: $20 for every $1,000 spent at the grocery store. If you’re responsible for your household’s food budget, you’ll appreciate having that extra buffer to play with. General purpose cash back cards such as Chase Freedom and Discover it have additional perks, but can’t match this.
4. Nice Introductory APR Offer. Flagstar Cash Rewards American Express Credit Card charges no interest on purchases or balance transfers for 6 months from your account opening date. Savvy cardholders can use this grace period to pay down high-interest credit card balances or finance large purchases without running up needless interest charges.
5. Relatively Affordable Overdraft Protection for Flagstar Deposit Customers. If you have a Flagstar deposit account, this card’s overdraft protection deal is worth a closer look. It costs just $10 per overdraft transfer. Some comparable overdraft protection programs cost two to three times that amount.
6. No Penalty APR. Flagstar Cash Rewards American Express Credit Card has no penalty APR. This is great news for cardholders who occasionally miss payments due to cash crunches or liquidity issues. Many popular competitors, including BankAmericard Cash Rewards Credit Card, indefinitely charge penalty interest at 29.99% APR.

Disadvantages

1. Mediocre Baseline Cash Back Rate. This card has a mediocre-at-best baseline cash back rate: just 1%. That’s lower than popular competitors such as Capital One Quicksilver Cash Rewards Card (unlimited 1.5% cash back on all spending), Chase Freedom Unlimited (also unlimited 1.5% cash back on all spending), and Citi Double Cash Card (unlimited 2% cash back on all spending). If you’re looking for higher earnings in categories other than gas or groceries, look to one of those options.
2. Has a Foreign Transaction Fee. Flagstar Cash Rewards American Express Credit Card has a 2% to 3% foreign transaction fee. Either way, that’s enough to negate cash back earnings. If you frequently travel abroad, look to a no-foreign-transaction-fee alternative such as Discover it Miles.
3. Points Expire After 5 Years. This card’s cash back points expire 5 years after they’re earned. If you’re an infrequent user, make sure to redeem your accumulated points periodically, lest they disappear out from under you.
4. Mediocre Sign-up Bonus. This card’s $25 sign-up bonus is pretty paltry. Most no-annual-fee cash back credit cards have more generous sign-up boosts. For instance, American Express Blue Cash Everyday’s sign-up bonus adds up to $100, while Chase Freedom Unlimited’s multi-part bonus tips the scales at $175.

Final Word

Flagstar Bank is not as well known as national banks like Wells Fargo and Bank of America. Its trade area is confined mostly to the Great Lakes region and areas of the South. Partly because I lived in Michigan for a few years, I’m part of a minority of Americans with direct Flagstar banking experience.

Even though Flagstar Bank has a low profile and limited name recognition, its credit cards – including Flagstar Cash Rewards American Express – are nevertheless strong contenders in the ever-popular, ever-crowded cash back and travel rewards credit card categories.