I’ve had a number of years of using the Blue Cash Preferred® Card from American Express as my primary card of choice for groceries (by far, the biggest expense category I charge by credit card). So, I wanted to share the results on whether my quest for 6% cash back on groceries paid off (or didn’t) in the American Express Blue Cash Preferred review.
Realizing that around 60% of my typical credit card purchases were at supermarkets, I went on the hunt for a card that could offer more cash back in that category. What’s sweeter for a frugal rewards card hacker than extra cash back on common grocery purchases that you were going to make anyways? (a man’s gotta eat!)
At the conclusion of my search, two cards jumped out as being far superior to any others on the market in this category (and they just so happen to be closely related):
- The aforementioned Blue Cash Preferred.
- The Blue Cash Preferred’s sister card, Blue Cash Everyday® Card from American Express.
Amex Blue Cash Preferred vs. Blue Cash Everyday Benefits
What’s the difference between the two cards? (highlighted in bold below)
Blue Cash Preferred highlights:
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
- 6% Cash Back on select U.S. streaming subscriptions.
- 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
- 1% Cash Back on other purchases.
- Intro offer: Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
- $0 intro annual fee for the first year, then $95.
You can find out more about this card and APPLY HERE.
Blue Cash Everyday highlights:
- 3% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases, then 1%.
- 3% Cash Back on U.S. online retail purchases, on up to $6,000 per year, then 1%.
- 3% Cash Back at U.S. gas stations, on up to $6,000 per year, then 1%.
- 1% Cash Back on other purchases.
- Intro offer: Earn a $200 statement credit after you spend $2,000 in purchases on your new Card within the first 6 months.
- No annual fee
You can find out more about this card and APPLY HERE.
The 6% cash back in favor of streaming services was not a big differentiator, nor was the introductory bonus offers (though the Preferred’s is easier to get). The 6% vs. 3% on supermarkets was a differentiator. As was the $95 annual fee.
I rarely pay for a credit card annual fee and often hold a negative view towards those with an annual fee (who likes credit card fees?). However, after crunching the numbers, I determined the Blue Preferred would deliver a better overall return, even with the $95 annual fee. Would these #’s play out in reality?
Blue Cash Preferred Cash Back After 1-Year
Crunching numbers is one thing. But how would the cards play out in real life?
Here’s a screenshot of my rewards earnings over the year:
You can see my earnings had a huge jump from Jan to Feb., as I received my reward bonus (and redeemed it as a statement credit). Then, they steadily increased between $35-$45 per month each month, as I purchased groceries each week.
For more granularity, I live in a 2-person home (my wife and I) and we buy our groceries at Trader Joes, Whole Foods, Meijer (includes all toiletries, over-the-counter medicine, pet supplies), and Kroger (for a rare unscheduled run). We also eat at home 99% of the time. Dining out expenses probably average $30/month.
My total “groceries” (supermarket) category expenses in my year end review, according to AmEx, was $6,446.87. How common is this? According to a recent U.S. Bureau of Labor Statistics survey, American households spent an average of $6,189 on groceries over the course of a year.
I personally just passed the $6,000, 6% cap and received the full $360 cash back for the “supermarket” category (and 1%, or $4.46 on the remaining $446.87 in spend for that category).
Note that each retailer you purchase from has a classification code that determines what category it falls in to. What retailer purchases fell in to Amex’s “groceries” category for me? Trader Joes, Whole Foods, Meijer, and Kroger.
Blue Cash Preferred vs. Blue Cash Everyday Results
What happens when comparing the two cards (and a typical no-annual-fee 1% cash back card) when looking at the first $6,000 in grocery expenses?
Blue Cash Preferred:
- year 1: $360 cash back + $250 bonus – $0 annual fee = $610
- subsequent years: $360 cash back – $95 annual fee = $265
Blue Cash Everyday:
- year 1: $180 cash back + $200 bonus = $380
- subsequent years: $180 cash back = $180
Generic 2% Cash Back card:
- year 1: $120 cash back = $120
- subsequent years: $120 cash back = $120
Generic 1% Cash Back card:
- year 1: $60 cash back = $60
- subsequent years: $60 cash back = $60
This calculation doesn’t include the additional 6% cash back benefits in the streaming category that you get with Blue Preferred, which make the card even more beneficial.
If you haven’t already, you may want to re-think that anti-annual fee sentiment!
American Express Blue Cash Preferred – Final Review:
The Blue Cash Preferred Card comfortably surpasses the Blue Cash Everyday card and 1% cards on supermarket purchases in net cash back for most users, despite the $95 annual fee. For me, it brought an additional $500+ cash back in year 1 and will bring $200+ each subsequent year versus a typical 1% cash back card. Just for buying the groceries I was already buying! Your mileage may vary, of course, depending on where you shop and how much you spend annually.
If you have a large family, it might actually pay off to use both, hitting the Blue Preferred 6% cap, then moving on to the Blue Everyday.
My only gripe with the Blue Cash Preferred card is that they have kept the annual 6% grocery cash back cap at up to $6,000 in spend. With grocery price inflation in recent years, that $6,000 cap should be raised to meet the moment.
As always, pay off your monthly statements in full and don’t use your card just for rewards benefits, that’s just silly.
You can find out more and apply for these 2 cards HERE and HERE, respectively.
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