All About Finance

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Several years ago, I had to cancel my credit card because I noticed some fraudulent activity on it. That was when I realized I didn’t have a backup card. It was more of an inconvenience than anything, but I recognized the value of having another credit card in reserve. So I researched the best cards on the market and found a deal I couldn’t pass up – the Blue Cash Preferred Card from American Express. This card is so good, it actually became my primary credit card and I relegated my old faithful to reserve status.

This card comes in two versions, the Blue Cash Everyday Card from American Express, and its big brother, the Blue Cash Preferred Card from American Express.

These cards offer similar benefits, but the Preferred version comes with stronger cash back and an annual fee. That said, I broke my personal rule for having a card with an annual fee and opted to pay $95 for the Preferred version – and I’ve already made my money back and then some.

Let’s take a look at these cards and I’ll show you why both of them are great cash back credit cards for many people to own, and why the card with the annual fee may be the better option for you.

Comparing the Blue Cash Preferred vs Everyday

Both of these cards offer an easy to remember cashback rewards program:

Blue Cash Preferred Card from American Express:

$250 statement credit after spending $1,000 in purchases within the first 3 months.
6% Cash Back at US supermarkets for first $6,000 per year in purchases; 1% cashback after that
6% Cash Back on select US Streaming services.
3% Cash Back at US gas stations & on transportation services, including taxis/rideshare, parking, tolls, trains, buses, and more.
1% Cash Back on purchases in other categories.
Cash Back is awarded as Reward Dollars which can be redeemed for a statement credit, gift cards, or shopping.
Terms and limitations apply.
$95 Annual Fee
Compare this card to other cash back credit cards at CardRatings.com.

Blue Cash Everyday Card from American Express:

$100 statement credit after you spend $1,000 in purchases within the first 6 months.
3% Cash Back at US supermarkets, up to $6,000 per year in purchases (1% thereafter)
2% Cash Back at US gas stations & select department stores
1% Cash Back on all other purchases.
Cash Back is awarded as Reward Dollars which can be redeemed for a statement credit, gift cards, or shopping.
Terms and limitations apply.
No Annual Fee

The primary difference is the Blue Cash Preferred Card from American Express offers higher cash back rewards, but it comes with a $95 annual fee. But after running the numbers for my situation, I quickly realized the $95 annual fee is well worth paying, especially in light of the current welcome offer for new cardmembers.

Blue Cash Preferred Card Welcome Offer – Receive $250 After Spending $1,000 in 3 Months

For example, new cardmembers who open a Blue Cash Preferred Card from American Express can get 250 Reward Dollars, redeemable for a $250 statement credit, after you make $1,000 in purchases with your new Card in the first three months.

New cardmembers who open a Blue Cash Everyday Card from American Express 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first six months.

Also, both cards also fall into the category of balance transfer credit cards by offering new cardholders the ability to transfer a credit card balance for a 0% APR introductory rate. Please see the American Express website for terms and conditions.

Here are more credit cards that offer new members a welcome offer.

Comparing the Annual Cash Back (Hypothetical Spending)

Let’s compare the cash back benefits over the course of the year for some hypothetical spending levels (plug in your own numbers to see how much cash you may be able to earn in a year):

Blue Cash Everyday® Card from American Express			Blue Cash Preferred® Card from American Express
Spending Category	Monthly Spending	Annual Cash Back	Spending Category	Monthly Spending	Annual Cash Back
Groceries (3%)	$500	$180	Groceries (6%)	$500	$360
Gas (2%)	$200	$48	Streaming Services (6%)	$50	$36
Department Stores (2%)	$100	$24	Gas & Other Qualifying Transportation (3%)	$200	$72
Other (1%)	$750	$90	Other (1%)	$750	$90
Streaming Services (1%)	$50	$6	Department Stores (1%)	$100	$10
Annual Fee		$0	Annual Fee		($95)
Annual Cash Rewards	Total Monthly Spending: $1,600	$348	Annual Cash Rewards	Total Monthly Spending: $1,600	$473 (includes paying annual $95 fee)

Notes:

The calculations don’t include the welcome offer, since it is a one time deal.
Pay attention to the difference between the gas and transportation column. The Blue Cash Preferred offers cash back at gas stations as well as other forms of ground transportation. The Blue Cash Everyday only offers cash back at gas stations.
These are examples of common spending patterns. Adjust based on your specific spending habits and needs.

Verdict? I prefer the Preferred version by a mile (for my needs). Even after accounting for the $95 fee, the Blue Cash Preferred Card from American Express comes out well ahead. It’s possible to earn much more than this in cash returns as well, if you have larger expenses, or pay more items with your credit card, including things such as utilities, cell phone bills, etc.

The Annual Credit Card Fee That Pays for Itself

I’ve rarely been a fan of credit cards which have an annual fee. There are plenty of great credit cards out there that have no annual fees and offer solid cash rewards or other benefits.

But in this case, the higher tiered rewards were too good to pass up. Most of the top tier cash back credit cards offer a 1% cash back as their baseline rewards, then up to 5% cash back in rotating categories (often with a cap for the rotating categories). Some cards will offer as high as 2% cash back on all purchases, which is still a solid offer.

Both Blue Cash cards offer the same 1% baseline, but you don’t have to deal with the rotating categories or low rewards caps featured on many other credit cards. Since groceries and gas are two expenses we know we will always have, it makes sense to maximize our rewards in those categories. We will always make enough cash back from those two categories to justify the $95 annual fee – and then some.

In our case, we earn several hundred dollars cash back each year.

How I Use This Credit Card

I opened this card right before Christmas and promptly put all my Christmas shopping on the card. I quickly reached the $1,000 spending requirement to receive the welcome offer when I combined my holiday spending with our regular expenses like gas and groceries.

I also opened a joint credit card with my wife so we could both use this card on our groceries and gas so we could more quickly rack up the cash back. (The benefit of opening a joint card is to avoid paying two annual fees. We typically use this card for family expenses, and we each maintain individual credit cards for gifts or other purchases we don’t want to classify as family expenses).

More Card Features

These cards don’t have any minimum or maximum spending tiers for your rewards, so you don’t have to worry about juggling cards to ensure you are getting the most return for your time. You can redeem your rewards as statement credits, which effectively lowers your payment. And you can wait as long as you like since your rewards never expire.

My wife and I waited almost seven years to redeem our cash back. Why wait so long? Well, we were saving it for a time when we knew we would have a lot of expenses. So when we moved, we used our statement credit to purchase some furniture for our new home. In effect, we used the cash back from American Express as another savings account, albeit one that doesn’t earn interest.

American Express also offers additional features that vary by card. Some examples include fraud protection, online account management, an online shopping portal where you can redeem your rewards for a statement credit, gift cards, or shopping, extended warranties, and more.

Please read the terms and conditions before applying to verify which additional services apply to your card.

It’s All in the Details

As far as the best cash back cards on the market go, this is probably my favorite, and it’s one that I personally carry.

When I compared the two cards above, the Blue Cash Preferred was a more lucrative rewards card for my spending patterns. I encourage you to compare them both as well to see which is better for you.

I also compared them both to a credit card that offered a flat 2% cash back. 2% cash back for the same spending fell right between the two American Express cards. So this could be a situation where it could make sense to use one of the Blue Cash cards for the higher cash back in its respective categories, and use a different rewards card for other spending, such as an airline rewards card for air travel, hotel rewards card to earn free nights, or other options.

Compare this card to other cash back credit cards at CardRatings.com.

Do you have either of these cards? What do you think about it?

Cash Money Life has partnered with CardRatings for our coverage of credit card products. Cash Money Life and CardRatings may receive a commission from card issuers.

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