Why you might like the Amex Blue Cash Preferred as an everyday card

 

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The Blue Cash Preferred® Card from American Express is the only American Express cash-back credit card that comes with an annual fee, at least after the first year. But it has the potential to earn enough cash back on many families’ ordinary expenses to offset the annual fee several times over, and it also offers a credit that could offset the fee all by itself.

The Amex Blue Cash Preferred is a great card for families and commuters, because it earns a lot of cash back on grocery, streaming, gas and transit purchases. In fact, in our article about the best cards to use for groceries — and this Amex offering is absolutely among the top choices for that — we called it “the all-American credit card” because it gives top rewards on spending related to things most households in the U.S. do a lot of.

Besides the annual fee, its only major negative is that the cash back it earns can’t be turned into points and used to book travel. But if you aren’t interested in that and only want cash back, the Amex Blue Cash Preferred can deliver serious value, with only a few caveats. Let’s look at why this card is a serious contender for many families.

The Amex Blue Cash Preferred at a glance

• Welcome offer: As high as $300 cash back* after spending $3,000 in the first six months. Welcome offers vary, and you may not be eligible for one — you’ll need to apply first to see your personalized offer (with no impact to your credit score unless you’re approved and accept).
• 0% APR intro period: 0% intro APR on purchases and balance transfers for 12 months from the date of account opening, then a variable APR, 19.49% to 28.49% (see rates and fees).
• Annual fee: $0 introductory annual fee for the first year, then $95 (see rates and fees).

In the first year of having the card, the Amex Blue Cash Preferred doesn’t charge an annual fee, and the $95 a year it charges after that can be offset pretty easily (see rates and fees). For new card holders, the welcome offer allows you to earn as high as $300 cash back after spending $3,000 in purchases within six months of opening the card — an easily attainable target.

The Blue Cash Preferred also offers a year without interest on purchases and balance transfers, which can be an attractive option for people who want time to pay for a big purchase or have debt from another credit card they want to transfer. Just note that balance transfers can only be requested within the first 60 days of account opening and that a fee applies to each transfer, either 3% or $5, whichever is greater (see rates and fees).

The clincher for many people might be the yearly $120 Disney streaming credit. After enrolling, you can get up to a $10 monthly statement credit if you use the card to buy a subscription, including bundles, to Disney+, Hulu or ESPN. That credit alone is larger than the annual fee.

Pros

• High cash back earnings on many everyday expenses.
• Intro period with no interest.
• $120 Disney streaming credit.

Cons

• Limited redemption options for the cash back earned.
• Bonus cash back earnings at supermarkets are capped at $6,000 in spending per year.
• $95 annual fee, after the $0 introductory annual fee (see rates and fees).
• 2.7% foreign transaction fee (see rates and fees).

We’ll see below what the limitations to the card’s cash-back earnings and redemptions are, although they won’t be deal breakers for most people. It’s also worth noting that earnings are geared towards spending in the U.S., and you would be charged a 2.7% foreign transaction fee (see rates and fees) if using the card abroad anyway (or charge in currencies other than the U.S. dollar.) Consider a credit card that doesn’t have foreign transaction fees if you’re planning a trip abroad.

Earning cash back with the Amex Blue Cash Preferred

• 6% cash back* on up to $6,000 spent at U.S. supermarkets each year (then 1%).
• 6% cash back* on select U.S. streaming subscriptions.
• 3% cash back *on transit.
• 3% cash back* at U.S. gas stations.
• 1% cash back* on other types of spending.

The biggest advantage of the Blue Cash Preferred is its elevated earnings on groceries and streaming. In fact, it offers the highest cash-back rate on both those categories of any card. There is, however, a $6,000 spending cap on how much elevated cash back you can earn at supermarkets, meaning you can earn 6% only on the first $6,000 spent. After this, your grocery earnings drop to 1%. Other cash-back cards offer lower earnings on groceries but with no spending cap, so if you know you spend well over $500 on groceries per month, then you may get more value out of another card even if it has a lower earning rate on groceries. But even at $6,000 in yearly spending at supermarkets in the U.S., you’d earn 36,000 American Express Reward Dollars, which can be redeemed for $360 at one cent per dollar. That alone would be almost four times more money earned than you’d spend on the annual fee.

The 6% earnings on streaming have no spending cap and cover pretty much all the major streamers that most Americans watch, like Netflix, Disney+, Spotify and YouTube TV.

Blue Cash Preferred card holders also get an unlimited cash-back rate of 3% on gas and transit. For example, a New York City commuter who spends $100 every month on the subway or trains would earn $36 in cash back over the course of a year (300 Rewards Dollars a month times 12, redeemed at one cent each).

You also have access to Amex Offers, which opens up the opportunity to earn even more cash back on top of your regular earnings. For example, you could be targeted for a bonus cash back offer on gas on top of the 3% you already earn.

If you do your grocery shopping at Target, Walmart or wholesale clubs, this card many not be for you, since those places are excluded from the 6% earnings. And the 3% earnings on gas does not apply to gas stations within supermarkets, superstores and warehouse clubs — only to standalone gas stations.

Using cash back from the Amex Blue Cash Preferred

The card earns cash back in the form of Reward Dollars, which can be redeemed at one cent per dollar for statement credits that lower your credit card bill. That may seem very limited especially compared to the numerous uses of American Express Membership Rewards® points earned from several other Amex cards — but it’s also not a surprise for a card whose very name clearly says it’s meant for those who prefer cash back. If you’re not interested in the intricacies of credit card points, that one redemption option equals money effectively in your pocket.