The other day I received a text from a friend asking me about a new(ish) credit card from American Express. Specifically, my friend asked if the American Express Blue Cash Preferred card was worth carrying. I responded to him and told him that I wasn’t too familiar with the card. I also told him that I’d do some research and get back to him.
See, the truth of the matter is, I only have so much time/energy to research credit cards. So, in an attempt to keep it all straight, I typically only focus on rewards credit cards. I focus on rewards cards because that’s where I extract the most value from credit cards. I earn points that are typically worth $0.01 to $0.02 a piece and try go get upwards of $0.10 of value from them. For example, flying Lufthansa First Class with points represents a fantastic value. Even with all of the cash back in the world, I couldn’t justify buying a $10,000 airline ticket. However, with points, I’m able to do essentially that.
However, not everyone values points. A lot of people earn points and then can’t find a way to use them. Worse, some use points to buy merchandise at $0.005 a point! Basically, not everyone wants to put in the time/effort to learn about point reward programs and how to extract the maximum value. Instead, for those people, cash back, into their pockets, is the most valuable to them. Enter, the American Express Blue Cash Preferred Card.
American Express Blue Cash Preferred Overview
When I started looking into the Blue Cash Preferred card I was impressed by the benefits offered from the card. The card earns 1% cash back on all purchases, but features a few bonus categories that earn up to 6% cash back. For example, the card earns 6% cash back on purchases at US Supermarkets and on US Streaming Service Subscriptions. Additionally, the card earns 3% cash back on transit (taxi, Uber, Lyft, Public Transport, etc.) and 3% cash back on US gas stations. Beyond that, card members earn 1% cash back on all other purchases.
Personally, I’m pretty impressed by the bonus cash back categories. It is worth noting that the US Supermarket benefit is capped to just $6,000 of annual spend. After that, card members only earn 1% cash back on supermarket spend. Still, with that benefit alone, you’ll earn up to $360 of cash back annually.
Additionally, the card comes with some other benefits, such as roadside assistance, car rental damage insurance, travel accident insurance, and cell phone protection which typically aren’t offered by a cash back credit card.
For all of that, the card carries an annual fee of just $95. So, assuming you put more than $1,500 of supermarket spend on the card, you’ll easily offset the annual fee each year.
My Impressions Of The American Express Blue Cash Preferred Card
Overall, I’m impressed by the Blue Cash Preferred card from American Express. The annual fee is a bit off-putting for a cash back credit card, but I think it’s worth it. At minimum, the average consumer should be able to at least offset the annual fee each year through spend. Still, when looking over the card’s benefits, I couldn’t help but wish the card offered more than just 1% cash back on “all other spend.” The card would be much more attractive if it offered 1.5% of 2% cash back on non-bonus spending. Even so, I would still choose a rewards credit card over a cash back card.
For example, the American Express Gold card earns 4X points on grocery store spend. Assuming I spend the same $6,000 each year, I’d earn 24,000 American Express Membership Rewards points with the Gold card. I value Membership Rewards points at $0.015 each, which mean, I’d get $360 of value from my points. That $360 of value is exactly equal to what you get from the 6% cash back offered from the Blue Cash preferred card. However, when using Membership Rewards points to book Singapore Suites, I got closer to $0.07 of value from my points. In that case, those same 24,000 points are actually worth closer to $1,680. With that, I’d still choose a rewards card over this card.
Final Thoughts
Let me be clear, if you’re looking for a great cash back credit card, the American Express Blue Cash Preferred card is a great option. With the generous bonus spend categories, you can easily offset the annual fee and get real value from the card. When comparing this card to the Chase Freedom, Chase Freedom Unlimited, Citi Double Cash, or other cash back cards, I’d say that this is the most attractive of them all.
That being said, if it were up to me, I’d still choose a rewards credit card that earns flexible points currency over a cash back card. The only thing that would change my opinion is if American Express would begin allowing card members to transfer cash back into Membership Reward points. If that were the case, then my opinion on this card would change significantly.
Featured Image Courtesy of American Express
