About Blue Cash Preferred By American Express
One of the big draws for signing up for a new credit card is the promise of cold, hard cash.
American Express’s Blue Cash Preferred card does just that – they’re offering (at the time we researched it) new cardmembers a $150 bonus if they spend $1,000 in purchases in the first three months. And, you’ll get 0% APR on all purchases made in the first 15 months.
You also get cash back on nearly everything you buy, with some purchases getting you more reward money than others (we’ll get to that later).
We have to admit, that sounds pretty appealing. But what about the ongoing benefits, security features, fees/fine print, how it compares to other cards and public opinion concerning this card?
We want to make sure you have all the information you need to make a good decision about your next credit card, so let’s get started.
What Are the Ongoing Benefits to This Card?
The big plus of the Blue Cash Preferred is, of course, the cash back. Like we mentioned before, different purchases get different amounts of rewards:
- 6% at U.S. grocery stores
- 3% at U.S. gas stations and select U.S. department stores (gas stations, superstores and warehouse clubs don’t count)
- 1% on everything else.
This system of cash back is good because it’s simple compared to a card like the Chase Freedom, which has rotating categories of rewards that can be confusing.
We also like that you get 6% back on groceries because, according to the U.S. Department of Agriculture, American families of four spend anywhere from $146 to $289 on groceries every week. So, every four weeks you’ll probably earn between $35 and $69 in cash rewards.
There’s a catch, though. You only get 6% on the first $6,000 you spend every each year. After that, it’s 1%. How long will that six grand last you?
- If you spend $146, your 6% reward will end in 41 weeks.
- If you spend $289, your 6% reward will end in about 21 weeks.
In our opinion, the deal isn’t as good as it seems, especially if your family is on the high end of the grocery bill. Bottom line is, whether you hit the limit in 41 weeks or 21 weeks, you’ll be getting $360 in rewards (6% of $6000) and that’s not a bad deal at all.
As for the 3% cash back reward at select department stores, we found this American Express page that lists all the eligible supermarkets. Here’s a few (but not all) stores from that list:
- J.C. Penny
- Saks Fifth Avenue
There are a few conditions in this category you should know about, though. You may get 1% instead of 3% if you pay through a mobile or wireless card reader or if you use a mobile/digital wallet.
You’ll also lose the 3% if you use your card to pay through a third party (a PayPal account that uses funds from your credit card to buy things, for example) or if you buy from one of the select department stores on an online marketplace with multiple retailers (Macy’s purchases on Amazon, for example).
While the grocery store purchases have a cap on them, the 3% purchases don’t. So, if you’re like the average family who spends about $180 a month on gas (at around $2 a gallon), you could earn $65 a year on rewards. And remember, those rewards will go up if you buy things from any of the stores listed.
What do all these numbers and limits and percentages mean for you? Well, if you’re the average family of four with a car, there’s a good chance you’ll rake in at least $425 in rewards cash per year. That’s a great perk, in our opinion.
What Kind of Security Features Does This Card Offer?
The Blue Cash Preferred card doesn’t offer a lot of security measures, per se. The card comes with a security chip, which is becoming standard with many credit cards.
You get dispute resolution access as well, which means Amex will help you resolve unauthorized charges. But when you go to the Terms and Conditions page to learn more, you’re met with this uninspiring sentence under Dispute Resolution: “Not all disputes are resolved in the Card Member’s favor.”
Frankly, we think the security measures offered with this card are pretty paltry.
The card also comes with purchase- and return-protection programs and an extended warranty program. The return-protection feature actually caught our eye because it could be useful and the average cardmember isn’t aware of this benefit.
If you use your Amex card to buy an item and the retailer at which you bought it doesn’t accept your return, you can petition Amex for a refund if you meet the following conditions:
- It’s within 90 days of purchase
- The item is in like-new condition
- It’s not a motorized vehicle, a perishable item, computer software, jewelry or other items (the full list is here).
What Fees and Charges Can I Expect?
You’ll pay a $75 annual fee and all purchases made after the first 15 months will have an APR between 13.24% and 22.24%, which are normal rates compared to other cards. Late fees can be as much as $37, and if you make a late payment, you’ll pay a penalty APR of 29.49% for at least six months.
How Does the Blue Cash Preferred Compare to Other Cards?
When compared to other credit cards, the Blue stacks up pretty well. The Discover it card offers 5% cash back on purchases in categories that change every three months and have a cap of $1,500.
Over the course of a year, both cards have a cap of $6000, but you get 6% back with the Blue, and, better yet, there’s a really good chance (if you’ve got a family), you’ll hit the limit and get $360 in total rewards. Our opinion? The Blue’s rewards program is simpler and better than the Discover it, and other credit cards that have rotating rewards categories.
But the Blue card does have one drawback, in our opinion. The rewards cash you rack up on their card can only be used on your card’s balance. You can’t use your rewards to pay your credit card bill, and, unlike the Bank of America Cash Rewards card, you can’t transfer your cash balance to a checking account.
What Are Fellow Consumers Saying About This Card?
Of the 177 people who reviewed this card on Credit Karma, 104 gave the card a 5-star rating and an overall rating of 3.9 out of 5 stars. The card has 26 reviews on Nerd Wallet for an overall score of 4 out of 5 stars. The card earned 4 out of 5 stars from 1,066 on Card Hub. Based on these ratings, we think there’s a good chance you’ll be happy with the Blue.
Here’s a sampling of some of the reviews we read:
“If you're like me, and spend alot on groceries and gas, this is an excellent card to have.”
“Though there is a fee for this one, it easily pays for itself in no time.”
“I haven't found a card that has a comparable cash back program that nets me the return that the blue cash preferred does because of the 6% back on groceries (my biggest monthly expense after rent).”
“The cash rewards program is a lot easier to use that most. You don't have to deal with complicated points systems or miles.”
So, What’s the Conclusion About the Blue Cash Preferred Card?
We see our job as providing you the information you need to make a smart decision. We don’t want to make the choice for you. So, with that in mind, here’s our thoughts.
The Blue is a great fit for families, because there’s a really good chance they’ll earn at least $420 in rewards just by using their card for groceries and gas. When you subtract the annual fee, you’re looking at $335 a year. Throw in the $150 bonus for the first three months (and $1K in purchases) and you’re sitting on about $485 in your first year.
To put that in perspective, in 2014 the average cost of a vacation for a family of four was $4,580. You can pay for 10% of your vacation just by swiping your Blue for groceries and gas, and that’s not even including the 1% on most other purchases.
On that note, however, if you want to find a credit card that will give you more immediate travel benefits (i.e. not having to spend six months buying groceries to make $360), consider a points-based travel card like the Chase Sapphire Preferred or the Capital One Venture.
If you can hit the $4,000 (Sapphire) or $3,000 (Venture) purchase mark in the first three months, you’ll receive enough points (in 6-8 weeks) to buy a flight to pretty much any destination in the United States or Caribbean. Many times, round-trip flights to vacation spots cost much more than the $400-$500 you could earn in six or seven months of using the Blue.
As for security and added features, this card lacks some of the bells and whistles other cards have. If you like apps or online security features that let you freeze your account with a click or tap, try the Discover it card. Their Freeze It feature is right up your alley.
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