We’ve spoken about the new limit on the Amex Old Blue Cash (here, here, here). Previously, this was a favorite for those who wanted to manufacture spend since it offered an unbeatable 5% cashback at drugstore/grocery and there was no limit to how much you could earn. A couple of months ago, Amex capped the bonused rewards at $50,000 of spend per year. After hitting that limit, you’ll earn 1% on all purchases.
Existing Cardholders
The new limit was originally mentioned for new cardholders, but soon existing cardholders saw on their statements that Amex updated the terms to limit them to the $50,000 as well.
This has now been confirmed on Flyertalk that the $50,000 limits are kicking in and halting any further 5% earnings.
Initial Spend
Another interesting thing has been noted regarding the question of how precisely the new terms will work. Under both the old and the new terms, the first $6500 of spend gets 1% at drugstore/grocery and .5% everywhere else. After that initial spend, the card earns 5% and 1% respectively. Some speculation ensued about whether the initial $6500 of spend is included in the $50,000 cap. If one were to spend the initial $6500 in drugstore/grocery, would they still earn another $50,000 of 5% at drugstore/grocery, or would they earn another $43,500 since they already ‘used up’ $6500 with the initial spend?
One Flyertalk member’s experience indicates that the $6500 will count toward the $50,000 limit and will reduce the total 5% earnings to $43,500.
After maxing out on his $50,000, he calculated his total Reward Dollars for the year and it came out to $2347. Now, if we don’t count the initial $6500, then there would be $2500 of Reward Dollars from the drugstore/grocery spend, plus whatever small amount from regular spend and from the initial spend. The total could not be less than $2500. It now seems that Amex is capping us at $50,000 of drugstore/grocery spend total, including the initial spend.
Optimal Spend Pattern
Based on this, we come to an important point in regard to optimizing the Old Blue card. Instead of spending the initial $6500 on drugstore/grocery spend at 1% cashback, it would be wiser to spend the initial spend elsewhere, so that we’ll be able to subsequently get 5% on the full $50,000 at drugstore/grocery. We will be losing slightly in the initial spend, since we’ll only be getting .5% instead of getting 1% for drugstore/grocery spend, but we’ll them be positioned to get a full $50,000 of drugstore/grocery spend for $2500 of total cashback.
