Invest

how to invest

Live

career, food, travel

Save

saving, credit, debt

Protect

insurance, security

Retire

401K, IRA, FI, Retire

Home » Credit Cards

6% Cash Back on Groceries Again? Year 2 Results are in

Last updated by on 17 Comments

2013 was my second full year of using the Blue Cash Preferred® Card from American Express as my primary card of choice for supermarket purchases. In my first full year of usage, I was able to achieve the maximum 6% cash back rewards. Could I duplicate this feat in year two?

The results are in, and since I’ve hyped this card a lot in the past, I wanted to share them with you.

It was another successful year of getting the maximum 6% cash back reward on my largest expense category – groceries.

In reviewing my year end spend analysis within my account, I was able to isolate that I spent $6,100 on supermarket (Trader Joe’s, Whole Foods, Kroger, and Meijer) purchases. My wife and I spend less than the average 2-person household on grocery items, for comparison. If you’re in a one-person household, I provide an analysis later in this post on whether this card will pay off for you.

The Blue Preferred Card caps your 6% cash back on the supermarket category at $6,000 in spend ($360 cash back). Every dollar spent beyond that threshold receives 1% cash back.

Here’s how my monthly cash back earnings charted out for me over the course of the year:

grocery rewards card comparison

I’m nothing, if not consistent, I suppose.

This screenshot, includes non-supermarket purchases as well. Outside of the 6% cash back at US supermarkets, this card also has 3% cash back at US gas stations, 3% at select US department stores, and 1% cash back on other purchases. So some of that (although not too much) is in the chart as well.

Updated Perks for New Cardmembers

Outside of the hefty ongoing cash back rewards in categories that don’t change, the Blue Cash Preferred Card also has an updated perk for new cardholders. You can 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.

Does the Blue Cash Preferred Card Make Sense for you?

It is worth noting that this card has a $75 annual fee.

Because of that, the Blue Cash Preferred card might not make the most sense for 1-person households that don’t spend nearly as much on groceries as 2+ member households do. If that more accurately describes your household, the Blue Cash Preferred Card has a sister card with no annual fee (and lower cash back rewards) – the Blue Cash Everyday® Card.

Last year, I did a Blue Preferred vs. Blue Everyday cash back comparison to a typical common no-annual-fee/1% cash back card on $6,000 in supermarket purchases. Here is what I found:

Blue Preferred:

  • year 1: $360 cash back ($6,000 @ 6%) + $150 bonus – $75 annual fee = $435
  • subsequent years: $360 cash back – $75 annual fee = $285

Blue Everyday:

  • year 1: $180 cash back ($6,000 @ 3%) + $100 bonus = $280
  • subsequent years: $180 cash back = $180

1% Cash Back card:

  • year 1: $60 cash back ($6,000 @ 1%) = $60
  • subsequent years: $60 cash back = $60

In this scenario, the Blue Cash Everyday Card triples and the Blue Cash Preferred Card more than quadruples the cash back on supermarket purchases versus a 1% card, even after the annual fee is factored in. If you make department store or gas station purchases, the comparative cash back rewards could be even higher.

If you don’t have either card, and you responsibly pay off your full credit card balances each month, what are you waiting for?

Related Posts:

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 legitimately 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.


17 Comments »
  • Aurelius says:

    This card took a nosedive once they split the old Blue Cash card into the current Blue Cash Preferred/Blue Cash Everyday, though it is still better than many of the other options out there.

    I still have the “old” Blue Cash card. No annual fee and no limits on cash back. 5% for groceries, gas, pharmacy, after meeting the minimum spend threshold. 1.25% back on everything else (although they crammed this down to only 1% when they discontinued the card). Without crunching the numbers, I feel this is (was) a superior card and am disappointed AMEX no longer offers it.

    It looks like the Blue Cash Preferred is working for you, however, and I do think AMEX is a top-tier operation. I hope to ride out the “old” Blue Cash as long as I can.

  • Tom says:

    I just obtained the Blue preferred last month and am excited to start getting the benefits. My wife and I also spend just over $6k on groceries in a year so it seems like a good fit.

    It’s also an opportunity for me to build credit as it is my first credit card. Before getting married I think it was wiser for me to not have a credit card, but some of my wife’s responsibility has rubbed off on me. :)

  • Joe says:

    Is it safe to assume if you do grocery shopping at Target or Wal-Mart, you ill only get 3%.

    • G.E. Miller says:

      It depends on how those stores classify themselves with Amex. If it is as a supermarket, it would be 6%. If it is a department store, 3%. If it is anything else, 1%.

      I know Meijer (at least the ones I shop at) classify themselves as a supermarket. I don’t shop enough at Target or Wal-Mart to know.

      Anyone have experience with this?

      • Brian says:

        I don’t know the answer to how it’s classified but I would recommend if you do your grocery shopping at Target get a Target Red Card. You get 5% on everything you purchase at Target with no limit and no annual fee. My guess is you would easily make up the 1% difference without the $75 annual fee and no limit.

  • Deke says:

    “Outside of the 6% cash back at US supermarkets, this card also has 3% cash back at US gas stations, 3% at select US department stores, and 1% cash back on other purchases. So some of that (although not too much) is in the chart as well.”

    Just curious, do you use another card for gas, or do you just not drive that much? I’ve been leaning towards this card as my next largely due to the grocery AND gas perks, but if there is something else out there you’d recommend for gas, I’d be interested.

  • Tim says:

    Sounds like an awesome deal for you guys and it works with your current spending.

    I barely spend $2200 a year on Groceries so it wouldn’t work out that will for me. Probably looking at the other saving it would balance out.. but I get rewards of various types on a few cards so I get a few extra pay days when those checks come in.

  • Syed says:

    Thanks for the review. I got this card in January (was lucky enough to get the $150 signup bonus) and it’s been working great. We eat out rarely and get almost all of our food and ingredients from the grocery store so it works out great. We’ll easily reach the $6,000 mark before the end of the year. But I know I’ll be using this card for a long time.

  • RNT says:

    I love this card. We signed up a year ago, and earned $500, which I deposited into my son’s 529 account. It felt great knowing that was money earned on necessary expenses, and now it will compound over the next 15 years.

    For those wondering, Target is classified as 1% (most of the superstores are, so Walmart would probably fall into the 1%, too).

    • Riky says:

      Target is 1%, but they do have their 5% off store card, which seems like it may be a good deal. Especially now that they have probably beefed up their security since their data breach.

      I’d only get it if I shopped there more often though.

  • Riky says:

    I’ve been using this card in combination with my Amazon card and Southwest card for everything. I really only purchase things from a few places: Grocery stores, pharmacies, Amazon.com and restaurants.

    Using this card, it helps me rationalize buying organic produce sometimes versus the cheaper stuff. It’d be interesting to look at those costs actually, now that I type about it.

  • Steve says:

    Even for single people, the Preferred Card may be a better option than the Everday Card. After the first year – once the sign-up bonuses are no longer valid – the break-even point for groceries, alone, is an annual spend of $2500. Therefore, if you spend more than $2500/year at grocery stores, the Blue Cash Preferred card is the better of the two options. I’d guess that a lot of single people spend this much on groceries, especially if they also buy toiletries at their grocery store. Or, if they want to be sneaky, get even more cash back, and buy gift cards for other expenses at their grocery stores – I often do this, solely because of this card.

    Again, this is factoring in groceries, and only groceries. You can do your own calculation by comparing all purchases you’ll use on the card.

    Preferred: Yearly cash back = (Spend at grocery stores)* .06 + (Spend at both department stores and spend on gas) * .03 + (all other spend) * .01 – 75

    Everyday: Yearly cash back = (Spend at grocery stores)* .03 + (Spend at both department stores and spend on gas) * .02 + (all other spend) * .01

    The above formulas don’t take into account the maximum spend before you just get 1% cash back, but if you’re spending that much, it’s already a no-brainer that the Preferred card will save you more money. I really think that for most people, the Blue Cash Preferred card is, well, preferred.

  • Jake says:

    Have you tried using this card inside Meijer to buy gift cards and then use the gift cards at the pump? It is a little more tedious to go inside to use the gift card if its a prepaid pump but its gains more rewards.

    I do this with my Chase Freedom card when it offers 5% back on gas. I go inside the gas station to buy gift cards and use it to buy groceries.

  • Ben says:

    My wife and I buy our groceries from a regional grocer that does not take credit cards. That being said, we’re able to get a much lower price for the items we buy compared to other grocery stores in our area. We could go to a more expensive grocery store but I definitely do not want to do that just to earn the cash back. This looks like a great card if you can use it for groceries!

SPEAK YOUR MIND

Enter your:


Home | Sitemap | Terms | © 20somethingfinance.com