Cashing in at the Supermarket: Blue Cash Preferred® Card from American Express Review
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Earning rewards from your credit cards is a lot like earning interest on your investments. Cardholders should look for the highest returns possible considering the amount they spend and the type of merchants they frequent. They then need to balance these rewards against any fees assessed on their cards. The Blue Cash Preferred® Card from American Express offers as much as 6% cash back rewards for your spending at a time when many reward cards only offer 1%-2% cash back. (Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.)
Some card highlights:
- Get $150 back after you spend $1,000 on purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit.
- Hassle-free cash back: no enrollment required, the same great reward categories year-round.
- Earn Cash Back: 6% US supermarkets up to $6,000 per year in purchases, 3% US gas stations & select US dept stores, 1% on other purchases. Terms and limitations apply.
- Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- A credit card that gives you cash back with a 0% Intro APR Offer on purchases and balance transfers for 15 months.
- After that, your APR will be a variable rate, currently 12.99%-21.99% based on your creditworthiness and other factors.
- Terms and restrictions apply.
Blue Cash Preferred’s Cash Back Percentages
Like many credit cards, customers earn 1% cash back on purchases from most retailers, but it is the bonus categories that make this card stand out.
A whopping 6% cash back is earned from purchases from US supermarkets, not including warehouse or discount stores. How good is that? Let’s just say that some people were taking this discount so far that American Express recently imposed a $6,000 annual cap on eligible purchases. After earning $360 (6% of 6,000) in cash back from US supermarkets, cardholders will now earn just 1% on subsequent purchases.
Plus, you get 3% cash back at US gas stations and select US department stores.
(Cash back terms and limitations apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.)
Because Blue is an American Express card, you can expect a wide range of other benefits beyond simple cash back.
- The Return Protection benefit gives you up to 90 days to return a purchase, even if the merchant has a shorter time limit on refunds.
- The card also extends an eligible product's warranty for an extra year, if the original warranty is less than 5 years.
- You have the standard rental car loss and damage insurance that most cards offer. But in addition, you also receive access to a Roadside Assistance Hotline to help you find a tow truck or locksmith.
- Cardholders receive travel accident insurance that covers any kind of common carrier transportation when paid for with their card.
- Finally, there is a 24/7 Global Assist hotline that can provide help when you are traveling.
There is a $75 annual fee for this card and a 2.7% foreign transaction fee on all charges processed outside of the United States.
- Sign up bonus. $150 cash back received as a statement credit, after spending $1,000 in the first 3 months of having the card. $150 is not the greatest sign up bonus ever, but it is still pretty nice easy money, especially because of the low minimum spending requirements to qualify for it.
- High cash back percentages. This card provides high cash back rewards on most common purchases such as those at US supermarkets, US gas stations, and select US department stores.
- 0% intro APR. Get 0% on purchases and balance transfers for 15 months. (Then it goes to a variable rate, currently 12.99% to 21.99%, depending on creditworthiness and other factors.)
- Reasonable annual fee. $75 is a significant annual fee, but considering that the cash back rewards are so high, it is not out of line with many leading reward cards.
- Generous benefits. Like many American Express cards, this card offers great benefits for consumers like Return Protection and Extended Warranty. Plus, there's the Roadside Assistance Hotline, Car Rental Loss & Damage Insurance, Travel Accident Insurance, a Global Assist Hotline, and more.
- Foreign transaction fees. Simply put, this fee is a complete rip-off. Many other banks are getting rid of these charges, but American Express continues to retain this fee on all but their Platinum and Centurion cards. Until they join the crowd and eliminate this fee, I will keep calling them out on it.
- Mediocre interest rates. After the intro period, cardholders receive an APR of between 12.99% and 21.99%, depending on their credit worthiness. There are other cards with lower interest rates best suited to those who carry a balance.
- Annual cash back limit. The 6% cash back at US supermarkets is only for the first $6,000 in purchases. After that, the cash back percentage drops to 1%.
Who This Card Is Best For
This card, like all reward cards, is not for those who carry a balance on their credit cards. If you do, you should focus on finding a low interest card and paying off your debt.
For everyone else, the key to this card is figuring out if you normally spend enough on the key cash back categories to easily justify the annual fee. For example, if you spend $50 per week at US supermarkets, or $2,600 per year, you will earn $156 of cash back each year. Those who spend $50 per week at US gas stations will earn $78 per year in cash back.
Note: If you do the math and come out way ahead, this might be the cash back card for you. But if the numbers don’t work, you might want to consider the "Everyday" version of this card, the Blue Cash Everyday Card® from American Express. Sure, the bonuses are less, but there is no annual fee.
Once you have considered how these cards will work for your budget, you can choose the card that will give you the most cash back in the end.
Terms and restrictions apply.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.