If you are looking to earn maximum cash back on your trip to the supermarket, the Blue Cash Preferred® Card from American Express might be the credit card you need in your wallet.
The card offers 6% percent cash back on grocery shopping done at select U.S. supermarkets for up to $6,000 in spending per year. That can amount to as much as $360. It also gives 6% cash back on streaming entertainment services like YouTube TV, Hulu or Disney+.
American Express also offers 3% cash back on gas and transit, an introductory 0% APR period (see rates and fees) and a chance to earn a one-time $250 welcome bonus with this card.
Is all of that worth the $95 annual fee (see rates and fees) that is attached to the card in what is a competitive cash back credit card market? That’s what Team Clark hopes to help you answer with this review.
Table of Contents
- What Is the Blue Cash Preferred Card from American Express?
- Card Specs and Perks
- Cash Back Program
- Difference Between Blue Cash Preferred Card from American Express and Citi Double Cash
- Final Thoughts
We’ve spent time reviewing the cash back rewards credit card market. The Blue Cash Preferred Card from American Express is one of the options we evaluated. We determined that it is one of the best choices due to its combination of 6% cash back on groceries and streaming, as well as 3% back on gas purchases.
As you’re making your decision on whether the Blue Cash Preferred card is a fit for you, please use Team Clark’s review of the card in conjunction with money expert Clark Howard’s 7 Rules for Using Credit Cards.
What Is the Blue Cash Preferred Card from American Express?
The Blue Cash Preferred Card from American Express is a cash back credit card that carries a $95 annual fee, which is waived in the first year. In exchange for that fee, cardholders gain access to bonus cash back opportunities on some top consumer spending categories such as groceries (6%), streaming entertainment (6%), gas (3%) and transit (3%). All other purchases are eligible for 1% cash back.
As part of the promotional strategy for this card, American Express is offering 0% APR on purchases for a 12-month introductory period, as well as a one-time $300 statement credit that can be earned by spending $3,000 within the first six months of card membership.
Blue Cash Preferred Card from American Express: Card Specs and Perks
Before we get too far into whether or not this cash back card is the right choice for you, let’s take a look at some of the perks and drawbacks of the card from the fine print:
Bonuses and Perks
- 6% Cash Back Opportunities: The top perks for this card are the 6% cash back opportunities in the U.S. supermarket and streaming services categories. For most U.S. consumers, those are two categories that have an impact on their monthly spending. There is a limit to $6,000 in spending per year on the supermarket cash back, but that equals out to $500 per month (or just over $115 per week).
- More Cash Back Possibilities: This card doesn’t just reward U.S. supermarket and streaming purchases. It also gives 3% cash back on transit and gasoline purchases. That includes things like ride sharing apps, taxis and parking fees. All other purchases are eligible for 1% cash back. We’ll dive a little deeper into how the cash back rewards work for this card later in the article.
- Introductory 0% APR Period: There is a 12-month introductory period during which all purchases qualify for 0% APR. Beginning in the 13th billing cycle, your purchases would be subject to the APR assigned by American Express based upon its review of your credit report and card application.
- $300 Welcome Bonus: The card provides the opportunity for a $300 statement credit. To earn it, you must spend $3,000 with the card within the first six months of membership. You can expect to see the credit within 8-12 weeks after the threshold is met.
- Dispute Resolution and Return Protection Policies: These are in place to help absolve you from potentially fraudulent or incorrect charges to your card. The return protections associated with this card can cover you for an item that you’re trying to return but a merchant is refusing to take back. You can read more about that process here.
- Global Assist Hotline: American Express provides access to this concierge service, which can help you with things like lost passports, missing luggage, or even translation issues as you travel.
- Amex Offers: You have the opportunity to opt your card into receiving retail deals exclusive to American Express card holders. You can view the current offers here for a sampling of some of the potential shopping perks.
- ShopRunner: Access to premium services from ShopRunner is included with this card. This includes free 2-day shipping and returns from popular retailers like Neiman Marcus and Under Armour.
- Entertainment Presales: This card qualifies as a card eligible for American Express presale time periods for ticketed events such as music concerts, sporting events or theatre performances. It depends on the artist and the venue, but there are opportunities to scoop tickets at special pricing before the general public with the use of this card.
- “Accelerating” Cash Back: American Express uses this term to explain that it will allow you to earn cash back on purchases made when add card users, such as family or friends, on your account. Of course, it’s important to note that you’re going to be financially responsible for the spending done by whoever you add as a cardholder on your account.
Here’s a quick look at some of the fees you may encounter with this American Express card (see rates and fees):
- Annual Fee: This card carries a $95 annual fee, which is waived in the first year.
- Balance Transfer Fee: American Express charges either $5 or 3% of the total transfer amount, whichever is the larger amount.
- Cash Advance Fee: Similar to the balance transfer fee, cash advances cost the greater amount of $10 or 5% of the total advance.
- Foreign Transaction Fee: These cost 2.7% of each transaction after a U.S. dollars conversion.
- Late Payment Fee: American Express will charge up to $40 for a late or returned payment.
How the Blue Cash Preferred Card from American Express Cash Back Program Works
American Express gives cash back rewards in three different tiers for the Blue Cash Preferred card. There is a 6% tier, a 3% tier and then all other purchases fall into the standard 1% tier.
Let’s take a look at what qualifies a purchase for the bonus categories at each tier:
What Qualifies for 6% Cash Back
The reward for groceries is limited to U.S. supermarkets, and there is a $6,000 annual spending cap for earning 6% in the category. The fine print on this card excludes “superstores” and “warehouse clubs” from eligibility for the 6% cash back.
Examples of supermarkets that would be eligible: Kroger, Publix, Winn-Dixie or Albertsons.
Examples of stores that sell groceries but would not be considered supermarkets: Walmart, Target, Costco, Amazon or Sam’s Club.
You can find a more comprehensive list of retail definitions here. Perhaps it is best explained by American Express this way: “Merchants are assigned codes based on what they primarily sell. A purchase will not earn a higher percentage reward if the merchant’s code is not eligible.”
This may be considered an inconvenience for most, but perhaps a deal-breaker for some who have a regular grocery shopping routine at a superstore or warehouse club. If you grocery shop at a place like Walmart or Costco, you may be better off applying for the brand-specific credit card to enjoy the cash back opportunities at the individual stores.
While the qualifications for the 6% on groceries were a little strict, I think you’ll find that the streaming cash back category is a bit easier to navigate. Many of the top options for streaming music, movies and television are eligible for 6% back.
Here’s a look at some of the approved services:
- Live TV Streaming Services: YouTube TV, Sling TV, Hulu, AT&T Now
- Video Streaming Services: Netflix, Prime Video, Disney+, Apple TV+
- Music Streaming: Spotify, SiriusXM, YouTube Music, Pandora, Apple Music
- Sports Streaming: ESPN+, MLB.TV, NHL.TV, NBA League Pass
One important thing to note on these: You need to have your subscription payments linked directly to the card to get your full cash back benefit. If you’re paying through a third party, the purchase may only qualify for 1% cash back.
What Qualifies for 3% Cash Back
Going back to the American Express policy on cash back rewards being based on what merchants “primarily sell,” you’re going to see some similar restrictions for 3% on gas that you saw on 6% on groceries.
Places like supermarkets (Kroger, for example), superstores (Walmart, for example) and warehouse clubs (like Costco) are not considered gas stations for the sake of this promotion and would earn just 1%.
American Express highlights the following as examples of merchants that primarily sell gas and therefore qualify for the 3% cash back:
American Express gives the following examples of transit purchases that would be eligible for the 3% cash back reward:
- Ride-share services (Uber, Lyft, etc.)
- Toll fees
- Parking fees
Finally, here are some potential red-tape items to consider as you’re planning on how to use these cash back rewards:
- American Express issues these “Blue Cash Reward Dollars” as statement credits.
- Your Blue Cash Reward Dollars balance must be at least $25 in order to convert them to a statement credit.
- American Express will not let you use cash back only as a means of paying the minimum balance due.
Blue Cash Preferred vs. Citi Double Cash: Which Will Earn You More Cash Back?
By now you’re probably wondering if it is worth paying for the Blue Cash Preferred card instead of using a steady cash back card with no annual fee. It’s a good question.
For the purposes of making that determination, we’ve decided to compare the Amex card to Citi’s Double Cash. This is one of money expert Clark Howard’s favorite cash back cards because it offers a straight 2% cash back (1% when you purchase, 1% when you pay) on all purchases with no annual fee.
The answer probably lies within the spending categories in your personal monthly budget, so let’s look at some sample spending scenarios:
Sample Monthly Spending Scenarios
Sample A: If you spend $500 per month on groceries, $100 on streaming, $100 on gas/transit, and $1,300 on miscellaneous spending:
Blue Cash Preferred: $52 cash back
Citi Double Cash: $40 cash back
Sample B: If you spend $300 per month on groceries, $50 on streaming, $200 on gas/transit, and $1,000 on miscellaneous spending:
Blue Cash Preferred: $37 cash back
Citi Double Cash: $31 cash back
Sample C: If you spend $200 per month on groceries, $100 on streaming, $100 on gas/transit and $1,500 on miscellaneous spending:
Blue Cash Preferred: $36 cash back
Citi Double Cash: $38 cash back
If you’re diligent about making your grocery purchases at approved supermarkets, it’s going to be hard for the Double Cash card to outperform the Blue Cash Preferred on a monthly basis. But when you factor in Amex’s $95 annual fee (see rates and fees), things could tilt the Double Cash’s way depending on your spending mix.
If possible, utilizing the Amex card for 3% and 6% category purchases while also using the Double Cash for all other purchases would be the ideal way to earn maximum cash back.
Are you considering adding the Blue Cash Preferred Card from American Express to your wallet? Let’s review some of the pros and cons of the card before you make your final decision:
Blue Cash Preferred Card from American Express: Pros and Cons
|6% cash back on groceries and streaming||$95 annual fee|
|3% cash back on gas and transportation purchases||Caps 6% supermarket cash back at $6,000 in yearly spending|
|Introductory 0% APR period and $300 welcome bonus||American Express has lower U.S. acceptance rate than Visa and Mastercard|
Bottom Line: If you frequent a supermarket for your household’s grocery purchases, there’s a very strong case for adding the Blue Cash Preferred card to your wallet. The 6% cash back on up to $6,000 worth of groceries each year (max of $360 cash back) will comfortably cover the $95 annual fee.
From there, you can rack up additional cash back on streaming (6%) and transportation (3%) purchases. Add in a nice introductory APR and welcome bonus, and there’s a lot to like about this cash back offering from American Express.
Check our review of the top rewards credit cards to make sure you’re picking the right card for your spending habits.
To see the rates and fees for the American Express cards featured, please visit the following links: Blue Cash Preferred® Card from American Express: See Rates and Fees