Posted by sirtheta on January 13, 2017
Credit Card Review American Express Blue Cash Preferred

Published on January 13th, 2017 | by sirtheta

59

American Express Blue Cash Preferred Card Review – 6% on Groceries, 3% on Gas & Dept Stores

The American Express Blue Cash Preferred is one of those cards that makes people’s eyes momentarily pop out of their sockets—6% on groceries! However, not all is rosy in Blue-Cash-Preferred-land, especially with the annual fee recently being increased to $95. Here’s a full review, in which I’ve math-ed out whether this card makes sense for you.

As always, remember that we do not use credit card affiliate links, so our review is not biased by monetary incentives.

Card Basics

Benefits

  • $95 annual fee
  • Standard American Express benefits, including access to Amex Offers

Earning Structure

  • Earns 6% back on groceries, up to $6,000 per reward year (12 billing periods in a row beginning with the one that includes January 1st)
  • Earns 3% back on gas
  • Earns 3% back on select department stores
  • Earns 1% back on all other purchases

Signup Bonus

  • Standard bonus is a $150 statement credit for spending $1,000 within the first 3 months of account opening
  • 0% APR for the first 12 months on purchases, and balance transfers requested within 30 days of account opening
  • $250 statement credit for spending $1,000 is available as a targeted or increased offer
  • American Express occasionally tacks an additional signup bonus onto the card, such as 10% off at Amazon, up to $2,000 in spending or 5% off on travel, up to $4,000 in spending

Pricing Details

APRs

  • Purchase & Balance Transfer APR: 13.49% to 23.49%*, based on your credit worthiness
  • Cash Advance APR: 25.74%*
  • Penalty APRs: 29.24%*
    • Applies if you make a late payment or if a payment is returned
    • Applies for 6 months; account is reviewed every 6 months to see if penalty APR is still applicable
  • Grace period: 25 days (minimum, up to 28 days)
  • Minimum interest charge: None

* Note: these rates vary based on the Prime Rate.

Fees

  • Annual fee: $95
  • Balance transfer fee: $5 or 3% of the amount of each transfer, whichever is greater.
  • Cash advance fee: $5 or 3% of the amount of each transaction, whichever is greater
  • Foreign transaction fee: 2.7%
  • Late payment fee: Up to $38
  • Returned payment: Up to $38
  • Over credit limit fee: None

Application Information

Please feel free to add your own application information in the comments at the end of this review.

What Credit Score Is Required

Using data from the last two years from Credit Boards:

Lowest approved score668
Average approved score726

What Credit Bureau Does American Express Pull?

This depends on what state you live in, you can view that information here.

What Credit Limit Will I Receive?

Using data from the last two years from Credit Boards:

Minimum CLHighest CLAverage CL
$1,000$23,900$7,700

Rewards Program

The Blue Cash Preferred (and Blue Cash Everyday) earn Blue Cash Reward Dollars. You can redeem reward dollars for statement credits only in increments of $25 (obviously, you must thus have a minimum balance of $25 to redeem). As with many American Express cards, you do not receive credit for your reward dollars on your current statement until your next statement has closed.

Our Verdict

6% on groceries is great, but the $95 annual fee attached to it is not. The maximum cash rewards per year is 6% of $6,000 ($360), from which you can subtract the $95 annual fee to get $265—yielding a maximum cash back rate of 4.42% ($265 / $6,000). A comparison to no annual fee cards reveals the following break-even points:

As Compared To…Spend Must Be At Least…Comparable Cards
0% back$1,583.34N/A
2% back$2,375.00BankAmericard Cash Rewards, Citi Double Cash, EveryDay with 1 MR : 1 ¢, Fidelity Visa
2.2% back$2,500.00BankAmericard Cash Rewards w/ 10% bonus
2.4% back$2,638.89EveryDay with 20 transactions per billing cycle & 1 MR : 1 ¢
2.5% back$2,714.29BankAmericard Cash Rewards w/ 25% bonus
3% back$3,166.67BankAmericard Cash Rewards w/ 50% bonus, Blue Cash Everday, EveryDay with 1 MR : 1.5 ¢
3.5% back$3,800.00BankAmericard Cash Rewards w/ 75% bonus
3.6% back$3,958.34EveryDay with 20 transactions per billing cycle & 1 MR : 1.5 ¢

Further complicating the picture is rotating category cards such as the Chase Freedom & Discover it, which generally have groceries included in one quarter of the year at 5%. If you spend no more than $1,500 / quarter on groceries and spend equally each quarter, one quarter of 5% back and three quarters of 3% back yields an equivalent yearly cash back rate of 3.5%. As in the above table, you’d need to spend more than $3,800 / year on groceries for the Blue Cash Preferred to equal that. Under the same conditions, two quarters of 5% back and two quarters of 3% back yields equivalent yearly cash back rate of 4%, requiring $4,750 / year on groceries for the Blue Cash Preferred to equal that.

If your grocery spend exceeds the break-even points above, for the card(s) you’re currently using, or you can get enough mileage out of the other bonus categories, this is a good card for you. And the ability to use more Amex Offers is quite nice (though this is also true of some competing options). If you’re on the fence, the signup bonus will carry you through the first year and you can always downgrade to the Blue Cash Everyday.*

* Note: as American Express signup bonuses are only available if you’ve never had the card, downgrading from the Blue Cash Preferred to the Blue Cash Everyday would mean you can never get the signup bonus on the Blue Cash Everyday—if you want the signup bonus, you’ll need to apply for the Blue Cash Everyday separately.

You can view our list of best grocery credit cards here, our list of best gas credit cards here, and our list of best department store credit cards here. And always check out Things to Know about American Express before applying.

Questions? Drop them below.

FAQs

Q: I was hoping that you could comment on how the $25 redemption limit would affect your actual cashback (likely lower than 6%)?

A: This is a complicated question because of the different levels of cashback. If we drill down to just grocery spending, it becomes very manageable, though: you truly earn cashback, in the form of a $25 statement credit, for every $416.67 you spend on the card. If you’re well above a break-even point, this won’t matter much to you—but if you’re pretty close to a break-even point, it’d be understandable if you find yourself wanting easier redemption options.



59
Leave a Reply

avatar
 

  Subscribe  
newest oldest most voted
Notify of
Michael
Michael

I have this card now. Is it possible to product change to OBC?

MrWho
MrWho

No

Michael
Michael

So do I have to close this card first before I could get an OBC?

Austin
Austin

I got this card to MS at a local grocery store (Fred Meyer/Kroger) only to find out that it doesn’t code as a grocery store for AMEX (but does for Chase). So, if you’re getting this card for the 6% on groceries, do a test purchase with another AMEX card to see what it codes as before you waste an application. I ended up closing the card; not worth the AF for me.

Jacob
Jacob

I ran into the same problem when I moved cities and changed grocery stores. I found that I can order Kroger gift cards online through kroger.com that work at Fred Meyers and Kroger codes as groceries (at least it did last year, will find out soon if that changed). The maximum amount you can order on a gift card is $250. If you only order one shipping is $0.50 through USPS but if you try to order more than 1 shipping costs increase and that will each into your 6%.

Abey
Abey

Are you a new blogger sirtheta?
I like how you blog, very detailed, very organized.
Thank you and looking forward to read more from you.

prussiablue
prussiablue

I was thinking that your next write-up would be BCE/BCP!

prussiablue
prussiablue

I was hoping that you could comment on how the $25 redemption limit would affect your actual cashback (likely lower than 6%.) I have $7 in my BCE that I don’t think will be able to be redeemed before I close it.

Steve
Steve

It’s hard to calculate it exactly, since you’ll probably also redeem some amex sync offers, which will affect the amount of cashback you have. But BCP can be downgraded to BCE (and the reward balance carries over); since BCE doesn’t have an annual fee, you can keep it forever, and probably eventually reach $25; BCE’s 3% at grocery stores is still a decent rate, and you’ll probably do a few amex sync offers on it each year. So I would keep the BCE (unless you’ve reached the max number of amex cards and there’s some other amex card that you want).

Lrdx
Lrdx

This card has a signup bonus; just lower it by $24.99 to cover worst-case scenario if you want to calculate how much would you lose to the minimum redemption if you closed the card.

Eric
Eric

Why would you close your BCE? It doesn’t have an annual fee.

prussiablue
prussiablue

There are more Amex credit cards that I want to get and Amex won’t let me have more than 4 at a time :/

Geoff
Geoff

Data point, my credit limit on this card is 25k even.

This is actually my favorite card I own! I spend about 6k at grocery stores every year and it’s also nice for gas… plus the amex offers I get off of it (with 2 cards) net me about $250 per year which more than pays for the annual fee. All in all I value this card (for me) conservatively at $600 per year.

And it’s clear… nuf said

anthonyjh21
anthonyjh21

Considering you can downgrade it to a BC the amex offer value is a N/A. Granted, a few amex offers have been exclusive to the BCP but not by much. I had this card for 3 years and cancelled when the AF posted this past December.

Evan
Evan

I never had an AF card. Do you pay the fee at the beginning or at the at the end of your first year?

Bob
Bob

I’ve had this card for nearly 6 years now. Since I spend almost exactly $6000 a year at grocery stores, it’s perfect for me. I also save $200-$300 a year on AMEX offers, so even after deducting the annual fee, I get $500+ a year from this card.

Peter
Peter

FYI Amex gas excludes wholesale clubs. So no 3% on BJ’s or Sam’s Club gas.

Chase and Discover both include wholesale clubs in their gas categories.

JASON
JASON

For MS, 6% of $6000 is $360, but after AF $95 that’s $265 only, or $22/month. Keep in mind that gift card comes with a fee so buying a total of $6000 may pay around 6000/500*5=$60, so it brings down the profit to a little more than $200 a year.

007
007

This is not a great card for MS but can be worth it if you don’t have other 5+% options for Amazon (my sallie mae is going away at the end of the month and I don’t want to use a hard pull for one of the Amazon cards as I expect a potential house purchase 6 or so months from now). It’s actually even better as gift cards count for at least double fuel points at my Kroger, and I also get Kroger gas, which ends up getting me my Amazon discount PLUS more of a gas discount (up to $1 per gallon which for me ends up being about $10 per fill).

Mser
Mser

A big benny on all Amex cards are the sync offers. Fairly easy to save $50 or more per year per card. That lowers net cost of AF substantially, especially with AU cards

EastSideBK
EastSideBK

I don’t understand why anyone factors in the AmEx offers with this card. Can’t you just product-change to the free Blue Cash Everyday card and still get access to AmEx offers?

In other words, shouldn’t the sole determination of this card be whether you spend more than “X” on groceries compared to your next-best cc alternative (be it EveryDay, BofA Americard, etc.) Especially since the card’s other benefit, getting 3% on gas, isn’t as exciting compared to the other alternatives out there…..

What am I missing? Thanks in advance for clearing this up!

anthonyjh21
anthonyjh21

Yup, you’re spot on. Amex Offers mean nothing here since you can get it with a product change to the BC. It really comes down to whether or not you save enough money per year on gas and grocery to offset the AF and that’s YMMV. I happily downgraded my BCP last month. Between several alternative cards and grocery stores not accepting CC for GC it was an easy decision.

Steve
Steve

It’s not a factor when comparing BCP to BCE or other amex cards. But some people are comparing BCP to non-amex cards, in which case the amex sync offers are a factor.

Kevin
Kevin

The actual, realistic cash back rates are lower because of the forced 25 dollar increments and the two month reward delay. You’ll almost never be able to redeem everything.

007
007

FYI, I am by no means a huge fan of the rewards structure for this card, which is the worst I have seen (vs my double cash which allows me to direct deposit rewards into my bank each month and my Sallie Mae which shows points per transaction and allows redeeming >$25 right away). However, for my grocery spend + other spend (Amazon GCs now and $500 VGCs last year) which I always make sure ends up at $6000 per the appropriate statement year, this card comes out ahead of any other options, unless you are eligible for the $100k+ assets with BoA/Merrill and associated cards. Granted, it is not ahead by a LOT vs the other options, but I see no reason to change for now.

007
007

Also, as far as Amex offers, I realize this is not linked to this specific card, and is present on the everyday card (which I also have). Another nice thing for both cards is authorized users get separate accounts which ALSO have THEIR OWN amex offers. I have saved $120 in the past year with my BCE and BCP each with 1 AU on the cable and cell phone offers. I have also saved $200 on the Verizon offers (most of that with prepay/gift cards). A few savings sprinkled in too with Staples offer x 1 & Amex gift card offer x 1. Not too bad for me.

Amy123
Amy123

007, doesn’t the BofA card (even with the 75% bonus for 100k in assets) only return 3.5%? So why does this come out ahead of the AmEx Preferred assuming you are spending more than $3,800/yr with it?

007
007

Oops… sorry, you are correct. For context, I am mostly really interested in 2.625% back on all spend with $100k+ in Merrill Edge/BofA assets on a different BofA card, and haven’t looked very carefully (or forgotten what I read, even though it is in this thread) the other perks.

momosan
momosan

Nah, my Barclaycard CashForward is worse, it has a $50 minimum to redeem. I just cash it out once a year.

The annual fee increase on the BCP is a bummer, but the BCP is still a great card. I hit $6000 almost exactly at the grocery (I was a little under in 2016) because my pharmacy is in the grocery and codes as grocery.

anthonyjh21
anthonyjh21

I’m surprised there’s so much interest in this card with the increased $95 AF. I had this card for 3 years and downgraded to the BC when my AF was due again in December.

You did a fine job detailing the b/e point in which having the BC is a better choice so I won’t get into the specifics. But for those who are debating on getting this card they should heed the advice of Austin (above) and do a test purchase to see how Amex codes the transaction. Since I do 90% of my grocery shopping at the Neighborhood Walmart and/or Super Target the BCP does nothing for me since neither code as grocery (where as they do with SallieMae MC which is ending soon). Point is, make sure this card is good for you before you jump aboard.

One other point to make is that you may want to get the BC first since downgrading from BCP -> BC I’m guessing blocks you from getting a sign up bonus on the BC if you’ve never had this card before. I currently have two BC cards now so my amex offers capacity remains unchanged.

My methods of 4%+ on gas and grocery:

Grocery – SallieMae 5% anywhere, Walmart GC 5%+ (Sams Amex Offer too), Target RedCard/GC, Safeway GC from staples.com (5x UR)

Gas – Discover/Freedom 5% (usually 1-2 quarters per year), Costco Visa 4%

Dave
Dave

Supermarkets are very regional. I wouldn’t buy groceries from the Walmarts here but we have several great grocery stores. They all code correctly. If it were just grocery spending, I would never hit the $6k or even the $3k. When I can buy G/C and earn $15 off every gas fill up for a small $95 AF, sign me up all day long! Safeway has great deals on gift cards and the prepaid debit card deals are discounts, no pesky rebate cards like the office supply stores. Was I happier at $75, of course, but this is a better deal than my Ink card (or Freedom or Discovers). I’ve had credit cards since 1984 and this is the first one with an annual fee for me. Wasn’t sure it would be worth it but it has.

anthonyjh21
anthonyjh21

As you probably know you’re also paying a premium if you’re shopping Safeway over Walmart. I’d rather pay $1 for a box of rice a Roni than $1.70 (or play the J4U savings dance). Point is, a Walmart selling produce and groceries IS a grocery store in my eyes, regardless of whether or not Amex codes it as such. I’m not going to pay more just to get more rewards. It’s the game the banks and stores want you to play.

As far as had with rewards, yes, I can see a situation where the math adds up towards saving you enough in gas to justify the cost even if we ignore groceries. I think there’s other important variables at play here though as well, such as the value of your time (buying gc) or the fact that safeway gas (here at least) isn’t the cheapest.

P.S. You can buy safeway gift cards from staples.com and earn 5x and use towards your groceries. For most that’s worth more than 6%.

anthonyjh21
anthonyjh21

5x with INK Plus/Cash**

Dave
Dave

You have to admit that most of what Walmart sells isn’t groceries. Of course, the folks at AMEX (or Chase & Discover) don’t know what we are buying at the grocery chains either. I also have to drive further to get to one and deal with the same issues that keep some from using KATE or buying MO there. I can get local produce and meats at the local grocers while Walmart stock has seen a bit of travel time. Personal preference to be sure. I’m also a quick shopper, if I can’t be in and out in under 15 minutes, I’m not happy. Try just getting through a Walmart check out in that time! I do shop at Sam’s and find that to be more productive (can also pick up easier).
My experience in shopping for groceries at Walmart versus any of the grocery stores is that many prices aren’t that different. Folks don’t realize how regional pricing is and how much the cost of real estate and labor affects pricing. Many of the Walmarts here (Baltimore) are in expensive real estate.
I’m not buying G/C to resell, if that’s what you mean by wasting time. Strictly for business or personal use for a defined need. Since they dropped Shell, I do have to drive further to get Safeway gas, but the price is right around what I would pay at a closer station (looking at Gas Buddy to compare). I could now use the Sunoco option, but with a max of $.20 off. I can still use a 5% (during the right quarter) or 6% (buy G/C) discount to get that gas for more savings.
Not sure how waiting for a mailed card (no free shipping) at 5% is better than a straight 5% or 6% right at the store, unless I need to hit a spend threshold.
If the BCE was 6% for $3k instead of the other way around, I would change in a heartbeat. But I have 2% and 3% cards already.
Preference and locality make a big difference, particularly with respect to gas and real estate pricing.

matt
matt

So can you have 2 Blue Cash Everyday cards at the same time?

anthonyjh21
anthonyjh21

Yep. One was a downgrade of BCP -> BC. Kept the same card numbers too. Whats funny is I just received a $150 upgrade offer on my other BC card.

MH
MH

I’m going for OBC this year, won’t be renewing BCP.

Dan
Dan

I’m debating closing this card but i’m afraid of losing all of the AmEx offers associated with it. Do we get the same AmEx offers on the BlueCashEveryday card?

007
007

In my experience (I have both cards), offers have been similar but not 100% identical.

With that said, all offers I have actually used last year (cable, cellular service, Verizon, Staples, AmEx Gift Card) were on all of my cards at some point.

JB
JB

Agree with the “similar but not identical.” For example, I got the $30 off wireless bill on my BCP, and the $30 off cable/sat. TV on my BCE. And a Raymour Flanigan promo is only on the BCP. Other offers like Levis / Ray-Ban / Hulu are on both cards.

Mh
Mh

Apply for the blue cash everyday for the bonus while the preferred is still open, you can then track and compare the offers.

Back to Top ↑