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Home » Credit Cards, Reviews

The Best Grocery Rewards Card: Blue Cash Preferred® from American Express

Last updated by on 51 Comments

I’m starting to think a lot more categorically about how I use my credit cards in order to max out on cash back rewards for every type of purchase I make.

After looking at my year-to-date breakdown recently, it really hit me that a full one-third of my annual expenses are from groceries. And up until then, I had only been earning 1% cash back on those purchases.

I thought I might just be able to do better than that. So I went searching for the best cash back rewards card for grocery purchases. And all of my research brought me back to the Blue Cash Preferred® Card from American Express.

Cash Back Rewards on Blue Cash Preferred

As a cash back card, the Blue Cash Preferred Card is pretty outstanding.

My favorite perk is that it offersbest-grocery-rewards-card 6% cash back at US supermarkets, up to $6,000 per year in purchases. If that isn’t enough, it also offers3% cash back at US gas stations stations and select US department stores. And it also offers 1% cash back on other purchases.

Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. And cash back is simple and straightforward: No rotating reward categories. No enrollment required.

The cash back rewards, on their own, make the card worth it, but there is also a promotion for new card members to get $150 back after you spend $1,000 on purchases on your new card in your first 3 months. You will receive $150 back in the form of a statement credit.

There is an annual fee of $75 for the card.

Is the Blue Cash Preferred Card Worth its Annual Fee? Let’s Crunch the Numbers

I used to be very against annual fees, but 6% on a category I spend so much of my budget on is very convincing. With the card’s annual fee of $75, does it pay off? Let’s crunch the numbers to find out. According to the U.S. Bureau of Labor Statistics, the average American spent $3,624 on groceries over the course of a year. A couple would average approximately twice that, or $7,248.

  • At 6% cash back on those purchases (up to $6k), a single person would theoretically get $217 cash back from grocery purchases. An average couple would theoretically get $372 back.
  • Had those purchases been made with a 1% cash back card, the result would be $36 per person with that card.
  • When you subtract the $75 annual fee, you still end up with a net cash back of $142 per person (vs. $36 with a 1% card) or $297 per couple (vs. $72 with a 1% card).

I’m willing to pay $75 to get $297 cash back vs. only $72 cash back.

If you want to compare the cards rewards to others, find out what your previous year’s grocery expenses were, multiply that by 0.06 and subtract $75 to get the net cash back on the card, to see if the Blue Preferred card outdoes your or any other card rewards for grocery purchases.

What Supermarkets Get 6% Cash Back with the Blue Cash Preferred American Express?

Your mileage may vary, but the card has given me 6% cash back at each of the grocery stores I shop at: Trader Joe’s, Whole Foods, Meijer, and Kroger.

Is it the Best Grocery Rewards card? Comparison vs. the Blue Cash Everyday® Card from American Express

How would the results of the card fare against another grocery rewards card without an annual fee? The best I’ve seen in the category is actually the sister card of this one – the Blue Cash Everyday® Card from American Express (check out my review). That card offers 3% cash back on US supermarket purchases, 2% on US gas stations & select US department stores, and 1% on other purchases – without no annual fee.

  • With the Everyday card, an average individual would get back $108 (vs. $142 for the Preferred Blue), and a couple would get back $217 (vs. $297 for the Preferred Blue).
  • Additionally, the Preferred version offers 3% cash back at select gas stations and department stores vs. 2% for the Everyday.
  • Then there’s the $150 sign-up bonus vs. $100.

If your annual grocery purchases are in line with the averages I’ve highlighted here, the Blue Cash Preferred Card from American Express will result in the most net cash back, despite the $75 annual fee. I’ve signed up.

UPDATE: My first year of using the Blue Cash Preferred resulted in $385 cash back!

Disclosure: This content is not provided or commissioned by American Express. Any opinions, analyses, reviews or evaluations provided here are mine alone, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through Advertiser affiliate programs. I am an American Express cardholder, as highlighted in this post.


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


51 Comments »
  • Sun says:

    If I buy gift cards at a grocery store, will I get 6% back?

    • G.E. Miller says:

      I have heard of others being able to do this, but that is not official or anything. I would like to test it out before confirming. If you indeed can, then it opens up some interesting possibilities for savings (gas, Amazon, restaurants, etc.).

      • Sun says:

        I know it depends on the credit card company and how the merchant is “coded”. If you are an office supply or grocery store, how does the credit card company know you are buying gift cards? And within the same transaction, what if you are buying gum along with a gas card?

      • PD says:

        Purchasing gift cards at the grocery store will get you the 6% cash back. I do this often with Amazon and other store gift cards.
        From my experience, AmEx has no idea what you’re buying specifically.

        Like others have mentioned, just be sure that the store you’re purchasing from is categorized as a “grocery store”. For example, my local Fred Meyer (part of the Kroger grocery chain) is unfortunately categorized as a wholesaler and not a grocery store.

      • Darek says:

        I have this card and use it to purchase gulf gas cards for my gas at my grocery store. This works out best for me overall since the cumberland farms(a gulf station) right next to my grocery store is usually the cheapest gas in the area, AND it doesn’t charge an additional amount for using a credit(or gift) card. This way I’m getting 6% back on the lowest gas prices around, with no penalty for using the credit. I’ve also done this for items that can be purchased through amazon(which is a lot of stuff) since they sell those cards as well.

        Although I haven’t done this yet, I also plan on buying the “visa gift card” when I need to make a substantial payment on something that takes credit cards($500 or more) to get the 6% back. This works out overall when you do the math even though there is a $6 fee to but the gift card ($500 x 6% = $30, $30 – $6 = $24 cash back)

        • PD says:

          I tried this once, but my local grocery store would only allow “Visa/MC/AmEx” gift cards to be loaded using cash… may have just been that store’s policy.

          • Darek says:

            I once read about that happening to someone when trying to buy gift cards with their amex, but the stop and shops I go to have no problem with it. Haven’t tried the visa gift card thing yet though.

  • KC @ PsychoMoney says:

    Alright you got me, I went ahead and signed up. 6% is great.

  • Nvaled says:

    It’s important to mention how AMEX, and other reward cards, categorize each purchase in regards to the cash back percentage. I use the Blue Cash card for all purchases, but you only get the 3% or 6% (percentage depends if you have a annual fee or not) if you make grocery purchases at stand alone grocery stores (e.g. Kroger or Publix). If you buy food at Wal-Mart or Target, you only get 1% back. Same with gasoline; you only get the optimal gas cash back when you purchase gas from stand alone gas stations.

    • G.E. Miller says:

      Good point. I buy 90% of my groceries at Trader Joe’s and Whole Foods, which are both classified as grocery. I believe Meijer’s is as well, at least according to my AMEX spending category breakdown. So, it works for me. But if you buy your groceries at Wal-Mart, it’s probably not a good fit.

      • MSB says:

        Thanks for the article– it’s very helpful. You mentioned that you thought Meijer was included in the 6% cash back category. I called AMEX and they said they didn’t have Meijer listed as one of their “grocery store” merchants. Were you able to validate that Meijer is indeed included with the 6% on your statement? I would get their card in a heartbeat if they are. Thanks much!

        • G.E. Miller says:

          For me they are. I always get 6% cash back at the two Meijer’s I shop at (shhh…. don’t tell AmEx). I called AmEx and they told me there might be the potential for same merchant/different region to be categorized with a different code. I’d say give it a shot to confirm for yourself. At the worst, if you sign up, you can get the cash back credit, which is double the annual fee, so you’ll make money testing it out.

  • Anon says:

    The break even point for the annual fee is $2500 per year ($208.33 a month) on groceries alone. Any more than that and you are gaining more from the 6% rewards than the 3% cash back card. Any less than $2500 and the annual fee consumes more than the rewards benefit. My budget is $2000 per year ($167 per month) for groceries so the no annual fee turns out to be better. Of course this doesn’t account for fuel and the other benefits, but those are easy additions to the math below for anyone else’s individual situation.

    Math:
    n=Dollars per year on groceries
    0.06n-75=0.03n
    n=2500

  • Micah Warren says:

    This card seems great, I use it as I spend about 8-10K a year on groceries (I have three sons and live in NJ) However, it appears that the promotional cash back is somehow deducted from the rest of the cash back, or something else doesn’t add up. I had originally $100 in cash back rewards, and this number didn’t increase until I had spend quite a bit on groceries. Maybe I’m reading it wrong.

    Another thing which is moderately annoying is that they give you 12 months no interest on purchases, which you go ahead and take advantage of. Then they slide the $75 fee underneath that balance. So if you don’t pay the whole thing down after the statement on which this annual fee shows up, you get interest every month. Not breaking the bank, but it’s something like 20.24 interest rate on $75 which is still annoying enough. So it’s more like $100 yearly fee if you planned on making some major purchases soon after paying the card.

    • G.E. Miller says:

      This one has no minimum spend before cash back kicks in. Are you sure you have the Preferred version?

      As for the no interest on purchases – I still plan on paying in full every month. If you do that, you shouldn’t pay interest on the annual fee.

    • Nvaled says:

      Micah, I’m not sure about the sign-up bonus deal, but I do know that AMEX takes a while before your reward dollars show up; I think your current reward dollar balance lags a month or so. Coming from the Discover More card, I was used to my most recent reward dollars showing up on my statement, but AMEX does things a little differently.

      • Sun says:

        This is why I encourage every credit card customer to demand a points column for every settled transaction for online statements. You will know right away what percentage a particular transaction earned.

        • Nvaled says:

          In my experience they do, kind of. Each purchase shows up in whatever category they are charged to (i.e. department store, gas, etc.) and then a seperate breakout of your monthly reward points shows how much cash back you recived per category.

    • MIcah Warren says:

      I spoke too soon. I read the rules closer and they actually do apply payment to the higher rate balance, after the minimum payment is met. So you just have to make sure to pay 75 over the minimum after the fee kicks in. In a perfect world I have no other debt and can pay everything down, but I saw the 0% for 12 months and choose to pay down other things with interest rates.

      We’ll see how this lag goes, maybe you guys are right. It just appear that the total amount I have should be about right without the 100 bonus, which they gave me right away.

  • Ron Ablang says:

    Thanks for another informative article, GE. Definitely I need to take a look at my yearly grocery expenses to see if the annual fee is worth it.

  • Taming Our Finances says:

    I’ve been thinking of getting this card for a few weeks now. My previous card (which had 2% cash back on all expenses) recently got bought out by another company and is losing its cash back. Like you, I’m usually against the annual fee, but after reading your article I realize you still come out on the winning side. Thanks for the breakdown.

  • Oren says:

    This is a great card. It is the only card with an annual fee I would think about signing up for.

  • Julie says:

    I always wondered about this particular card – thanks for breaking it down everyone :)

  • Jim says:

    I have this card and like it.
    But you have to watch out for the store coding.
    On my statements, Kroger is coded as a grocery but Publix is not.
    I have purchased visa gift cards at the grocery to pay for car insurance or new tires.
    The only real danger is losing the gift card. That could negate any cashback reward in an instant.

    • JoeTaxpayer says:

      Last year I saw a card that offered 10% back on grocery and drug store purchases but only for the first 90 days.
      I stopped at my CVS on the way home as often as I could and bought $2000 in gift cards ($500 each $5 fee each, so $20 lost). Over the 90 days, I bought 100 cards for a $5050 rebate and a net gain of $4550. It took just under 9 months to spend it all and it was an experience. After the first $10,000 worth of cards was bought, the bank pulled the offer. The new ad showed 5% which made it far less attractive in my opinion. The effort was minor, and to those who think such deals are crazy, I don’t ask how long you work to clear $4550, but how long do you work to ‘save’ that much. Fewer than half the US has $2500 in their savings account. For me it was well worth it.

  • Stephen says:

    I have had this card for 4 months now and can attest that buying Visa gift cards from grocery stores are very hit and miss. Not a single grocery store in San Francisco has allowed me to buy visa, mastercard, or amex gift cards with a credit card. They say its cash only.

    However, I am allowed to buy as many visa gc’s as I want from this Pak n Save just outside of SF. So if you are planning to get this card to buy gift cards, make sure you check with your grocery store if they let you use credit cards to buy Visa GC’s!

    P.S. This card is very worth it if you can buy visa gc’s. In the 4 months of owning this card, getting 6% off everything is amazing! I’ve bought about 3k worth of visa gc’s so far. (I can pay for cell phone, electric, water, and gas bills with credit cards, and therefore, with these visa gift cards) I use my visa GCs to purchase everywhere I can swipe now. Currently at around $300 in cash back rewards from Amex – in just 4 months! (this $300 includes the $150 bonus)

  • Aeth says:

    Call American Express and ask the agent. He or she will check a list.

  • CK says:

    Is there any additional charge for a second card?

  • anne fischer says:

    Amex told me that Meijers is not considered a “stand alone” grocery store because it has a gas station! So no 6%.

    I was told that any grocery store having a gas station will not get the 6%.

    I don’t know how someone would get around this….personally, I’m not interested in buying a bunch of gift cards to game the system…..so I don’t know about this card for me.

    I ALready have a amex costco card…..but I don’t shop at costco that often.

    This card has some intriguing benefits…..250 back on the first 1000 of purchases and the 6%.

    I’m wondering if I could use this card for a year to see…..if it doesn’t benefit me I could cancel….

    Does this seem like a good idea? I am a single retiree ….

    • G.E. Miller says:

      Meijer’s gives 6% back for me. Test it out and see what happens. At the worst, use it for the first 3 months to get the $150 cash back bonus for charging $1,000. If you only get groceries at Meijer, and it’s not showing as 6% for you – then cancel at that point.

      • Casey says:

        Yikes! I hope you are right. I applied for this card and JUST activated it for the sole purpose of shopping at Meijer (and occationally Kroger) From my research most people were saying Meijer and Kroger both count. I rarely have the opportunity to shop at Trader Joes (hour drive from me) but when I do I will make sure to use this card there too.

      • annie says:

        I’m getting the 6% back on my Meijers purchases! YEAH!!!!!!!

  • Kevin says:

    Wow this looks like a pretty good card. Do you know an alternative to the card for people outside of the US? I live currently in Europe and such a bank card with rewards seems pretty solid.

  • annie says:

    That’s interesting. There is one store I shop at regularly that may not be classified a grocery store.

    Trouble is, Amex does not list the stores…atleast on my statement….by name, so it is very difficult for me to know what’s actually going on!

    Is there someplace you can get an itemized list that says the names of the stores, gas stations, etc.?

    Do you keep your receipts? That would be alot of receiipts, if you do!

    Thanks!

    Annie

  • Julia says:

    Do you know if Costco is one of the stores included?

  • Bryan says:

    Hey Mr. Miller -

    Your link to the sign up for this card is busted… and they’re now offering $150 as a signup bonus. Pays for 2 years regardless!!

    Signing up now!

    • Bryan says:

      Oh it burnss……. “If we identify you as currently having an American Express® Card account, you may not be eligible for this welcome bonus offer. ”

      We have amex skymiles and costco cards… :-/

  • Alan Steinborn says:

    Such a great list. One thing though. The AMEX Blue card link sends you to a page in which the card is no longer available. If you want the card, go to: https://www304.americanexpress.com/credit-card/blue-cash-preferred

    Best Wishes,

    Alan Steinborn

  • Matthew says:

    Hey, would you still recommend looking into this card this year? Just looking over some reviews and i didnt see this card too often reviewed but i like what the perks show.

  • Justin says:

    This seems like a great card if you shop @ places like Trader Joes and kroger etc. But keep in mind that those places are on average 6-10% more expensive than walmart, Bjs wholesale and weiss so if you shop @ these more expensive places you may be negating your cash back. It should also probably be mentioned that you can only redeem cash back in 25 dollar increments. Then there’s the gift card game If your into that sort of thing.

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