New Serve Cash Back Card – NOT a Good Deal for Most!

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Earlier this month, I wrote that American Express would introduce a new version of Serve which offers cash back.

You can now sign-up for the new Serve Cash Back card, which earns 1% back on purchases.

New Serve Cash Back Card NOT A Good Deal For Most

Earn 1% Cash Back on Purchases You Make With the New Serve Cash Back Card

But for most folks, it’s NOT a good deal.  I’ll explain!

What’s the Deal?

Link:   American Express Serve

Link:   American Express Serve Cash Back

Link:   My Review of Green and Blue Serve

You can now choose between 3 versions of American Express Serve.  Their newest card, the American Express Serve Cash Back, earns 1% cash back on purchases (in-store and online).

But you’ll pay a $5.95 monthly fee (except folks in New York, Texas, and Vermont) and up to $3.95 to reload the card with cash, debit, or PIN-enabled gift cards at locations like Walmart, CVS, and Family Dollar.

New Serve Cash Back Card NOT A Good Deal For Most

You’ll Pay a Monthly Fee AND ~$4 Each Time You Reload the American Express Serve Cash Back Card

Note:   Remember, you must choose between AMEX Serve, Bluebird, or Target Prepaid REDCard.  You’re only allowed 1 type of these cards per person.

With the American Express Serve Cash Back card, you’ll only earn cash back on purchases.  So transactions like paying bills, transferring money to others, or withdrawing funds to your bank account will NOT earn anything!

New Serve Cash Back Card NOT A Good Deal For Most

You’ll Only Earn 1% Cash Back on Purchases In-Store or Online

And unlike the Green Serve (Free Reloads) card, you’ll still pay a ~$4 fee every time you reload the card.  That’s not a good deal at all, and negates the value of the cash back you earn!

Most folks do NOT use Serve for purchases.  Instead, they load their AMEX prepaid accounts with PIN-enabled gift cards (purchased with a credit card) to meet minimum spending requirements.  Then pay bills that can’t normally be paid with a credit card, like utilities or loans.

You will NOT earn cash back for bill pay!

And there are lots of no-fee credit cards that earn more cash back for regular spending, including:

  • Discover It – Earn 1% cash back on all purchases (doubled at the end of the 1st 12 billing cycles for new cardholders, so effectively 2% back for the 1st year)
  • Discover It Miles – Earn 1.5 miles per $1 you spend (doubled at the end of the 1st 12 billing cycles for new cardholders, so effectively 3% back for the 1st year)
  • Citi Double Cash – Earn 1% cash back on purchases and 1% cash back as you pay for those purchases in full or over time

What About Paying Utilities, Rent, or Taxes?

Some bill payment services charge a lower (or NO fee) when you use a debit card instead of a credit card.

For example, you’ll pay a small flat fee when you use a debit card to pay income taxes (compared with fees of 1.87% to 2.35% when you use a credit card).

And rent payment services like RadPad don’t charge any fees for debit transactions.

However, folks report when you use your Serve card as payment on these types of sites, the purchase is coded as a credit (NOT debit) transaction, and you’ll pay the same fees as using any other credit card.

New Serve Cash Back Card NOT A Good Deal For Most

Bill Payment Services Treat Serve Transactions Like a Credit Card, So You Won’t Save on Fees

So you’re better off paying directly with a credit card that earns more cash back or miles & points if you’re trying to meet minimum spending requirements.

There’s Still a Fee-Free Serve

Earning 1% cash back on purchases with the Serve Cash Back card is generally not worth it for most, especially considering you’ll pay a monthly fee plus reload fees.

Folks might consider registering for the ONE VIP version of American Express Serve.  There’s no fee to reload it, and you’ll only pay a $1 monthly fee ($0 if you add at least $500 to the card each month, or if you live in New York, Texas, or Vermont).

New Serve Cash Back Card NOT A Good Deal For Most

Like the Old Serve – No Fees for Reloads and Minimal to No Monthly Fee With the ONE VIP Serve Card

I don’t know how long the ONE VIP Serve card will be available.

Bottom Line

The new Serve Cash Back prepaid card earns 1% cash back on purchases in-store and online.  It’s NOT a good deal.

You will NOT earn cash back for transactions like paying bills, transferring money, or withdrawing to your bank account.

Plus, you’ll pay a ~$6 monthly fee and ~$4 each time you reload the card.  You’ll likely pay more in fees than you’ll earn in cash back!

Folks interested in a Serve account will do better with the ONE VIP Serve (no reload fees and minimal to no monthly fee) or the Green Serve (no reload fees and a flat ~$5 monthly fee).

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5 responses to “New Serve Cash Back Card – NOT a Good Deal for Most!

  1. >> when you use your Serve card as payment on these types of sites, the purchase is coded as a credit (NOT debit) transaction
    I was hoping to use Serve’s cheques to pay rent. I hope that’s not coded as credit transaction?

  2. H, whether they’re credit cards, gift cards or prepaid cards (Redbird, Serve, Bluebird), all Amex cards run as credit only when swiped or used online to purchase with the credit card number.

    In your case, if you use Serve/Redbird/Bluebird to pay a bill via its billpay feature online, it is a different story; it is as if you were using your checking account…the other entity/person will receive an electronic payment (ACH) if they have an electronic account, or a check via mail.

  3. The card is 100% FREE to use for me in NY. Free direct deposits (or free deposits using bank transfers), no monthly fee and 1% cash back.

    This is pretty damn good for those who don’t qualify for the cash back cards listed above.

    Using the card, in my case, earns me about $40/month — or close to $500/year! And costs me zero, zip… nada!

  4. And let’s not forget, about 1 out of every 5 people in the U.S. lives in the above states in which there is no monthly fee.

  5. I have a American Express serve card I get my pay checks direct deposited onto my card for free and because I have them directly deposited I pay no monthly fees I live in IN the only fees I pay is if i use one of ATMs that’s on there no charge list i was wondering thoe cause I haven’t seen anyone say anything about it an I can’t find anything about it on American Express site if i was to switch to the new cash back card and since I do the direct deposit will the monthly card fee still be waved I never add cash to my card so I don’t have to worry about that fee so if the monthly fee is still waved with direct deposit it would be a good deal for me