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Several years ago, I had to cancel my credit card because I noticed fraudulent activity. That was when I realized I didn’t have a backup card. It was more inconvenient than anything, but I recognized the value of having another credit card in reserve. So I researched the best cards on the market and found a deal I couldn’t pass up – the card_name. This card is so good it actually became my primary credit card, and I relegated my old faithful to reserve status.
This card comes in two versions, the card_name and its big brother, the card_name.
These cards offer similar benefits, but the Preferred version has stronger cash back and an annual fee. That said, I broke my personal rule for having a card with an annual fee and opted to pay for the Preferred version (the card has a annual_fees) The good news – I’ve already made my money back and then some.
Let’s take a look at these cards and I’ll show you why both are great cash back credit cards for many people to own, and why the card with the annual fee may be the better option for you.
Comparing Rewards Programs for the Blue Cash Preferred vs. Everyday
Both of these cards offer an easy to remember cash back rewards program:
Blue Cash Preferred Card from American Express:
- 6% Cash Back at US supermarkets for first $6,000 per year in purchases; 1% cashback after that
- 6% Cash Back on select US Streaming services.
- 3% Cash Back at US gas stations & on transportation services, including taxis, rideshares such as Uber and Lyft, parking, tolls, trains, buses, and more.
- 1% Cash Back on purchases in other categories.
- Annual Fee – annual_fees (See Rates and Fees; terms apply.)
- Compare this card to other cash back credit cards
Blue Cash Everyday Card from American Express:
- 3% Cash Back at US supermarkets for first $6,000 per year in purchases; 1% cashback after that
- 2% Cash Back at US gas stations & select department stores
- 1% Cash Back on purchases in other categories.
- Annual Fee – None
- See Rates and Fees; terms apply
- Compare this card to other cash back credit cards
How to Redeem Your Cash Back Rewards:
Cash Back is awarded as Reward Dollars which can be redeemed for a statement credit, gift cards, or shopping.
The primary difference is the Blue Cash Preferred Card from American Express offers higher cash back rewards, but it comes with a $95 annual fee. But after running the numbers for my situation, I quickly realized the $95 annual fee is well worth paying, especially in light of the current welcome offer for new card members.
Comparing the Welcome Offers
New card members who open a card_name can bonus_miles_full
New card members who open a card_name can bonus_miles_full
Also, both cards offer a 0% APR introductory rate (a reg_apr,reg_apr_type APR applies after the introductory period). Please see the American Express website for terms and conditions.
Here are more credit cards that offer new members a welcome offer.
Comparing the Annual Cash Back (Hypothetical Spending)
Let’s compare the cash back benefits over the course of the year for some hypothetical spending levels (plug in your own numbers to see how much cash you may be able to earn in a year):
Sample Annual Cash Back Rewards – Blue Cash Everyday
| Spending Category | Monthly Spending | Annual Cash Back |
|---|---|---|
| Groceries (3%) | $500 | $180 |
| Gas (2%) | $200 | $48 |
| Department Stores (2%) | $100 | $24 |
| Other (1%) | $750 | $90 |
| Streaming Services (1%) | $50 | $6 |
| Annual Fee | $0 | |
| Annual Cash Rewards | Total Monthly Spending: $1,600 | $348 |
Sample Annual Cash Back Rewards – Blue Cash Preferred
| Spending Category | Monthly Spending | Annual Cash Back |
|---|---|---|
| Groceries (6%) | $500 | $360 |
| Streaming Services (6%) | $50 | $36 |
| Gas & Other Qualifying Transportation (3%) | $200 | $72 |
| Other (1%) | $750 | $90 |
| Department Stores (1%) | $100 | $10 |
| Annual Fee | ($95) | |
| Annual Cash Rewards | Total Monthly Spending: $1,600 | $473 (includes paying annual $95 fee) |
Notes:
- The calculations don’t include the welcome offer, since it is a one-time deal.
- Pay attention to the difference between the gas and transportation column. The Blue Cash Preferred offers cash back at gas stations and other ground transportation. The Blue Cash Everyday only offers cash back at gas stations.
- These are examples of common spending patterns. Adjust based on your specific spending habits and needs.
Verdict? I prefer the Preferred version by a mile (for my needs). Even after accounting for the $95 fee, the Blue Cash Preferred Card from American Express comes out well ahead. It’s possible to earn much more than this in cash returns if you have more significant expenses or pay more items with your credit card, including utilities, cell phone bills, etc.
The Annual Credit Card Fee That Pays for Itself
I’ve rarely been a fan of credit cards that have an annual fee. Plenty of great credit cards out there have no annual fees and offer solid cash rewards or other benefits.
But in this case, the higher-tiered rewards were too good to pass up. Most top-tier cash back credit cards offer a 1% cash back as their baseline rewards, then up to 5% cash back in rotating categories (often with a cap for the rotating categories). Some cards will offer as high as 2% cash back on all purchases, which is still a solid offer.
Both Blue Cash cards offer the same 1% baseline, but you don’t have to deal with the rotating categories or low rewards caps featured on many other credit cards. Since groceries and gas are two expenses we know we will always have, maximizing our rewards in those categories makes sense. We will always make enough cash back from those two categories to justify the annual fee.
In our case, we earn several hundred dollars cash back each year.
» MORE: Find out how to get the card_name.
How I Use This Credit Card
I opened this card before Christmas and promptly put all my Christmas shopping on the card. I quickly reached the spending requirement to receive the welcome offer when I combined my holiday spending with regular expenses like gas and groceries.
I also opened a joint credit card with my wife so we could both use this card on our groceries and gas more quickly and rack up the cash back. (The benefit of opening a joint card is to avoid paying two annual fees. We typically use this card for family expenses, and we each maintain individual credit cards for gifts or other purchases we don’t want to classify as family expenses).
More Card Features
These cards don’t have any minimum or maximum spending tiers for your rewards, so you don’t have to worry about juggling cards to ensure you get the most return for your time. You can redeem your rewards as statement credits, which effectively lowers your payment. And you can wait as long as you like since your rewards never expire.
My wife and I waited almost seven years to redeem our cash back. Why wait so long? Well, we were saving it for a time when we knew we would have a lot of expenses. So when we moved, we used our statement credit to purchase some furniture for our new home. In effect, we used the cash back from American Express as another savings account, albeit one that doesn’t earn interest.
American Express also offers additional features that vary by card. Some examples include fraud protection, online account management, an online shopping portal where you can redeem your rewards for a statement credit, gift cards, or shopping, extended warranties, and more.
Please read the terms and conditions before applying to verify which additional services apply to your card.
It’s All in the Details
As far as the best cash back cards on the market go, this is probably my favorite, and it’s one that I carry.
When I compared the two cards above, the Blue Cash Preferred was a more lucrative rewards card for my spending patterns. I encourage you to compare them both to see which is better for you.
I also compared them to a credit card offering a flat 2% cash back. 2% cash back for the same spending fell right between the two American Express cards. So this could be a situation where it could make sense to use one of the Blue Cash cards for the higher cash back in its respective categories and use a different rewards card for other spending, such as an airline rewards card for air travel, hotel rewards card to earn free nights, or other options.
» MORE: For cash-back options beyond those featured on this page, see our best cash-back credit cards.
Do you have either of these cards? What do you think about it?
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To see rates and fees for the card_name, please visit this link.
To see rates and fees for the card_name, please visit this link.
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William Charles says
You can pretty easily hit the 30 transactions required though, just purchase 30 $0.15 amazon gift cards.
Ryan Guina says
You can certainly do it that way. Credit card companies tend to get savvy to those kinds of practices over the long run, so it wouldn’t surprise me if they created a minimum purchase requirement at some point.
William Charles says
Ryan,
What do you think of the new EveryDay cards released by AmEx? They offer lower rewards (4.5 on groceries and 3 on gas) but you earn MR points instead.
Ryan Guina says
William, they look like good cards with a solid rewards program. However, the rewards you listed (4.5 on groceries and 3 on gas) aren’t the base rewards rates; they are the rewards rates after a bonus has been applied. You would need to use the card a minimum number of times per month to get that rate (20 times per month for the Everyday; 30 times for the Everyday Preferred). Because of the bonus structure, these cards are best used as a primary credit card. A good way to do that would be to use the card for automated purchases like utilities, cell phone, etc, and have another authorized spender on the account (such as a spouse).
Handles says
I was interested in the Amex Blue Cash Preferred card but was concerned with the limitations on stand alone supermarkets and eligible purchases. However, Amex convinced me it was a bad deal. First, even though they could tell me what qualified, they did not have a list online so I wouldn’t have to call them every time I wanted to use the card. Second, I asked if Giant, my local supermarket (which by all standards is stand alone), is a stand alone supermarket and they did not know. That got me thinking about what is acceptable to Amex and the few I inquired about are either more expensive than my Giant, e.g., Trader Joe’s, or you end up spending significantly more at each visit, e.g., Costco where people go crazy and end up buying much more than they need and pay an annual fee to shop there. So if you spend 5-10% more on the food and only get 6% in rewards, who is the fool for getting the card? This is not rocket science. Amex knows exactly what it is doing and most consumers do not. Be careful on what you apply for.
Ryan Guina says
Handles, American Express bases the rewards upon how the individual stores report to them. On a personal level, I haven’t had any issues with the purchases on my American Express Blue Cash Preferred card being reported under the “wrong” type of store. As far as spending goes, you should never spend more with a credit card than you would with cash, regardless of the amount of rewards you earn. You should only spend based on what you need and what you would spend if you had cash in your hand. If you stick to treating your rewards cards that way, then you will be rewarded for spending you would have made anyways. It’s all about spending and shopping responsibly.
bernard says
I don’t think they really restrict it to expensive supermarkets, it’s just that they don’t have a list (and neither do Visa or mastercard providers in most cases). I have now used the card in a large number of cheap and expensive supermarkets, and have always got 6%. It’s the superstores that are more problematic. Most cheap grocery stores would be coded correctly I would guess.
Ryan Guina says
That has been my experience as well, Bernard. The credit card companies don’t give cash back based on what the purchase is, but rather how the store is coded. So buying groceries at a Super Wal-Mart or Super Target won’t normally earn the 6% cash back. But buying a Best Buy gift card at your local grocery store is often worth 6% cash back, since the purchase was made at a store coded as a grocery store. I haven’t run into any problems with my card, and I review the statement each month for accuracy. If I noticed any discrepancies I might consider altering my shopping habits if it made sense.
DSO says
I have the blue cash preferred and I love it. I use it exclusively for groceries and gas. I hated the old version of the card that required you to spend $6k to start receiving higher cash back levels. With the new preferred card I’m expecting to get $500+ back at the end of the year. All other charges go on the Chase Saphire.
Ryan Guina says
My wife and I use the Blue Cash Preferred for all gas and groceries as well. I currently use the Chase Freedom and BCP for all other purchases, but I’m looking into getting something with different rewards – perhaps one of the airline cards that are offering solid bonuses right now.
Bernard says
I am also a keen user of the Blue Cash preferred, and in two months have got back $140, plus the $150 one time bonus. I use it only for groceries and gas (don’t go to dept stores!), using a 1.25% cash back card for the rest. (As others have pointed out, you can also buy gift cards for other vendors at grocery stores, getting 6% there as well, but I haven’t done this yet.)
My question is how American Express makes money on this! Not that I should over worry about them, but with the majority of the purchases earning 6% back, I assume that they are not getting this high a transaction fee from the grocery stores.