Published on January 13th, 2017 | by sirtheta59
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.
- $95 annual fee
- Standard American Express benefits, including access to Amex Offers
- 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
- 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
- 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.
- 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
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 score||668|
|Average approved score||726|
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 CL||Highest CL||Average CL|
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.
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|
|2% back||$2,375.00||BankAmericard Cash Rewards, Citi Double Cash, EveryDay with 1 MR : 1 ¢, Fidelity Visa|
|2.2% back||$2,500.00||BankAmericard Cash Rewards w/ 10% bonus|
|2.4% back||$2,638.89||EveryDay with 20 transactions per billing cycle & 1 MR : 1 ¢|
|2.5% back||$2,714.29||BankAmericard Cash Rewards w/ 25% bonus|
|3% back||$3,166.67||BankAmericard Cash Rewards w/ 50% bonus, Blue Cash Everday, EveryDay with 1 MR : 1.5 ¢|
|3.5% back||$3,800.00||BankAmericard Cash Rewards w/ 75% bonus|
|3.6% back||$3,958.34||EveryDay 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.
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.