Cash back credit cards with differing rewards based on shopping categories are frustrating. All too often the value of the perks are obscured by the simple fact that our spending habits fluctuate. The result: The benefits diminish as we spend outside the key reward categories. The Amex Blue Cash Preferred card is a rare exception to this catch. Though the card does offer different cash back percentages based on various categories the rewards program will benefit everyone. Why? The remarkable 6% cash back offer pertains to US supermarkets. Unless you never plan to eat again you can rest assured you’ll get a good deal with the card. This is just the beginning.
Stacking Up The Benefits:
- 6% Cash back at US supermarkets up to $6,000 per year in purchases (then 1%).
- 3% Cash back at US gas stations.
- 3% Cash back at select US department stores.
- No rotating reward categories.
- $250 Cash back upon $1,000 in spending in first 3 months.
- Carry a balance or pay in full each month without penalties.
- 0% APR for first 12 months.
- No over limit fee.
Considering The Downsides:
- $75 Annual fee.
- Variable rate APR ranging from 13.24%-23.24%.
- $37 Late payment penalty.
Getting Value From The Amex Blue
The brilliance of the card is seen in the high cash back percentages offered for everyday spending we all incur. Some cards offer a flat rate across all spending which is easy. However, these other cards cannot offer the high rate of 6%. As recently as 2014 the US Bureau of Labor & Statistics reported that the annual household spending on groceries is $3,971. At a 6% cash back rate you’ll save $238. Couple this with the $250 cash back on the first $1,000 and you’ll have $488 in savings in the first year.
Better yet, the saving grow with the other cash back perks on everyday necessities. Let’s look at the complete list of average US household spending and the cash back they’ll get from the Amex Blue Cash Preferred card:
Annual US Household Averages:
Groceries $3,971 $238
Gas $2,468 $74
Clothing $1,786 $53
Add: $250 Promo $250
Less: Annual Fee ($75)
Final Total $540
When a credit card rewards you for purchases that are essential for living you win big. Of course after the first 12 months the $250 promotional cash back reward disappears. However, the average US home can expect to save $290 per year with the card net of annual fees.
How To Make The Value Count
The perks are clear, so what’s the catch? The catch is you. All credit cards make money when you fail to pay on time. The APR on this card is not insignificant and Amex is willing to offer hundreds in cash back to get your name etched in plastic. They do this because they know enough cardholders will fail to pay the necessary balance. Fees accrue and in the end Amex makes money, not you. AS with any card the way to actualize the value is to be a responsible cardholder. Use the card as often as you can but don’t build a balance you can’t pay. The advice is perhaps simplistic but critical nonetheless. There are some other soft benefits that should also be mentioned:
- Rental car damage coverage.
- Travel accident insurance.
- Exclusive entertainment ticket presales for select events.
- Purchase protection on spending.
Avoiding Pitfalls To Card Ownership
Consider your current credit score and overall credit worthiness before jumping into this card. You’ll find yourself landing on the upper end of the APR range if Amex deems you un credit worthy. Stay away from cash advances. The benefit of this service is offered but in reality it’s not what a credit card is for. Engaging it will cost you an APR of 25.49% and can increase based on changes to the Prime Rate. Balance transfer cost are not unreasonable but are best avoided as they erode the savings listed above. This will cost the highest of $5 or 3% of the balance of the transfer. The same APR range of 13.24% to 23.24% applies for balance transfers.
An Alternative To Those Who Want To Avoid Annual Fees
Many will consider the annual fee to be a major detraction for this card. Serious credit card maximizes live by a rule to avoid any and all annual fees. As illustrated above the rewards more than offset this annual fee. However, for those determined to stay away from all annual fees there is the more simplified Amex Blue.
The rewards structure here is much more streamlined, though likely less beneficial for nearly all consumers. The card is absent of any annual fee. Each dollar spent equals 1 reward point. These points cannot be used to offset account balances. However, the points can be put towards gift cards, travel, dinning, shopping and entertainment. The problem here is that the rewards are more restrictive. The 1-point to $1 ration does not directly apply to the value of redeemed points towards a gift card. In many instances multiple points are needed to earn each dollar on a gifts card. Additionally, the range of stores and services offered in the gift card program are also restricted to a participating list. Here the APR is a slightly more favorable range of 15.49% to 20.49%.
A Great Choice For All Shoppers
The Amex Blue Cash Preferred card will fit the profile of every consumer. Larger families in particular will benefit the most from the grocery and gas cash back. Consider that no other card offers a cash back rate as high as 6% on any category. The closest is a 5% cash back reward on revolving categories offered by the Discover it credit card, a far less desirable option. Make the Amex Blue Cash preferred your card.