Credit card companies are competing hard for your business these days, and cash back rewards credit cards seem to be getting better each year. The Blue Cash Preferred Credit Card from American Express is arguably the best cash back rewards credit card on the market. Not only do cardholders get lucrative cash back rewards on groceries, gas and department store purchases, but there is no limit on the cash rewards you can earn with the Blue Cash Preferred Credit Card.
Blue Cash Preferred Credit Card
The Blue Cash Preferred Credit Card from American Express starts with base rewards of 1 per cent cash back on your every day spending. That’s in-line with the majority of rewards credit cards. But what sets this card apart from others is the grocery and gas spending categories. Blue Cash Preferred cardholders receive 6 per cent cash back on eligible grocery spending and 3 per cent cash back on gas and department store purchases.
- Get 6 per cent cash back at supermarkets
- Get 3 per cent cash back at gas stations and department stores
- Get 1 per cent cash back on all other purchases
- Annual fee of $75
If new cardholders make a total of $500 in purchases within the first 90 days of membership, they will receive a welcome bonus of $100.
Redeeming Your Rewards
After accumulating $25 in cash back rewards you can apply that amount for a credit on your statement. This way, you don’t need to bother with requesting a check and waiting for it to arrive in the mail. Alternatively, you can also redeem your reward dollars for gift cards and merchandise.
- Redeem for rewards whenever your available reward dollar balance is 25 or more.
- Earn gift cards at shops and restaurants.
- Use your cash back for electronics, fashion, and sports equipment.
How Much Cash Back Will You Earn?
To maximize your cash back rewards, you should try and make all of your purchases with your credit card (as long as you pay it off each month). Groceries and gas are simple, but you can also set-up automatic bill payments with your Blue Cash Preferred Credit Card so that your cable, cell phone and utility bills are all helping you earn cash rebates.
I spend approximately $2,600 per month on my credit card, including $600 groceries and $100 on gas. Let’s take a look at what my potential cash rebate will be from the Blue Cash Preferred Credit Card in the 1st year:
- Welcome bonus for spending $500 in the first 90 days – $100
- 6 per cent cash back on grocery purchases – $432
- 3 per cent cash back on gas purchases – $36
- 1 per cent cash back on all additional purchases – $228
Total cash rebate in first year = $796. Minus the $75 annual fee and that comes to $721 in cash back.
Final Thoughts
I don’t think I’ve ever seen 6 per cent rebates being offered, especially in a high spend category like groceries. One thing to note; the terms and conditions from American Express explicity state that eligible grocery purchases include most supermarkets, but NOT superstores and warehouse clubs. That’s an important distinction to understand if you purchase most of your groceries at Wal-Mart, Costco or Sam Club’s.
I like to put cold hard cash back in my wallet just for using my credit card for my every day spending. The Blue Cash Preferred Credit Card from American Express offers some of the most generous rewards of any rewards card. I used to shy away from credit cards with an annual fee, but the benefits from the Blue Cash Preferred Credit Card far out-weigh the $75 annual fee.
American Express also offers a non-”Preferred” Blue Cash card with no annual fee but lower cash back rates.
“Preferred” ($75 annual fee):
6% grocery
3% gas & dept. stores
1% everything else
non-”Preferred” (no annual fee):
3% grocery
2% gas & dept. stores
1% everything else
Thus, for the $75 annual fee you get an extra 3% on grocery and an extra 1% on gas/dept. stores.
My initial reaction was to always avoid annual fees, but I did the math for my spending habits and found that I would make over $75 more with the “Preferred” card than without it, so it was worthwhile choice.
@Wiseguy – I think most people tend to shy away from a card with an annual fee. You’re right to look at your spending habits and do the math to see which one works out to be a better deal.