Blue Cash Preferred® Card from American Express 2021 Review – Ideal For Groceries

The Blue Cash Preferred Card’s 6% cash back at U.S. supermarkets might turn heads, but those heads might turn away after reading all the fine print. The 6% cash back category is capped at $6,000 and does not include superstores like Walmart or Target or wholesale clubs like Costco. For those that hit the cap, additional purchases will only earn 1%.

The card also earns 6% back on select U.S. streaming services and while the list of eligible services is not too shabby, it’s unlikely to be a top-earning reward category—except, perhaps, for those media fiends with subscriptions to everything.

Earning 3% cash back on transit and U.S. gas stations and 1% cash back on everything else, the card is by no means a weak cash-back option. No balance transfer options exist with this card, but the card’s 0% on purchases for 12 months (thereafter 13.99% – 23.99% Variable APR) makes it competitive in the low introductory APR market.

The welcome bonus can also be stacked against the annual fee when weighing the overall worthiness of this card option.

Travel benefits for the card include car rental loss and damage insurance and a global assist hotline for those in tricky situations over 100 miles from home. Consider the card’s 2.7% foreign transaction fees if looking at this as a primary travel card, though. Also, American Express is still not as widely accepted internationally as other issuers.

One other potential drawback of the Blue Cash Preferred card is that rewards are redeemed as statement credits at a $25 minimum and do not apply toward minimum payments. This is standard for most Amex cards that do not offer Membership Rewards Points, Amex’s transferable point system.

• 6% cash back capped at $6,000 in annual spending at U.S. supermarkets (not including superstores like Walmart or Target)
• 6% cash back on select U.S. streaming services
• 3% cash back on transit and gas
• 1% cash back on all other purchases
• $0 introductory annual fee for the first year, then $95 annual fee
• Welcome bonus: Earn 20% back on Amazon.com purchases on the Card within the first 6 months of Card Membership, up to $200 back. Plus, earn $150 back after you spend $3,000 in purchases on the Card within the first 6 months of Card Membership. You will receive cash back in the form of statement credits.
• Introductory 0% APR on purchases, but not balance transfers, followed by the card’s standard APR

Earning Rewards

Cash-back rewards with the Blue Cash Preferred Card are earned in fixed, capped purchase categories and on all-around purchases. Cardholders will earn 6% back at U.S. supermarkets on up to $6,000 per year in spending excluding superstores like Target or Walmart or Wholesale clubs like Costco and 6% back on select U.S. streaming services. Additionally, rewards can be earned to the tune of 3% back on transit like trains, buses, tolls, parking and even rideshares, taxis and at gas stations. All other purchases earn 1% cash back.

A welcome bonus also comes with the card: Earn 20% back on Amazon.com purchases on the Card within the first 6 months of Card Membership, up to $200 back. Plus, earn $150 back after you spend $3,000 in purchases on the Card within the first 6 months of Card Membership. You will receive cash back in the form of statement credits.

Redeeming Rewards

Rewards are earned as Blue Cash Reward Dollars, which may be redeemed for statement credit with a minimum redemption of $25. Rewards cannot be applied toward minimum payments.

Rewards Potential

To determine the rewards potential of the American Express Blue Cash Preferred card we have to look at the bonus categories and calculate what an American household might spend in those areas. Forbes Advisor uses data from various government agencies in order to determine both baseline income and spending averages across various categories. The 70th percentile of wage earners bring in $100,172 annually and we base spending on that number.

Forbes Advisor estimates that a household in this income category spends $5,687 on groceries per year, which adds up to $341.22 cash back on groceries alone. Streaming service spending of $443 adds another $26.58 in annual cash back. The $2,687 on transportation our sample household spends would translate to $80.61 to cash back, and $17,593 on other purchases that could reasonably be charged to a credit card would earn cash back of $175.93. This means that the card would earn a total of $624.34 per year in addition to the first-year welcome bonus.

The Blue Cash Preferred Card offers 0% APR on purchases for 12 months (thereafter a 13.99% – 23.99% Variable APR applies).

• Car Rental Loss and Damage Insurance: When you use your card to pay for a rental vehicle and decline the collision damage waiver at the rental counter, you may receive secondary auto coverage in an eligible territory. Terms apply.
• Global Assist Hotline: Help coordinating and finding resources during a travel emergency.
• American Express Experience: Member-only entertainment experience opportunities.
• Fraud Protection: $0 cardholder liability for unauthorized transactions.
• Online Account Management: Cardholders can manage their accounts via the web.
• Year-End Summary: A year end document allows review of annual spending.
• Pay It Plan It: A payment plan option for purchases in categories under or over $100.
• Return Protection: If the seller won’t take an eligible purchase back up to 90 days from the date of purchase, American Express may refund the full purchase price excluding shipping and handling, up to $300 per item, up to a maximum of $1,000 per calendar year.

Interest Rates

• Regular APR: 13.99%-23.99% Variable
• Purchase Intro APR: 0% on purchases for 12 months, thereafter a 13.99% – 23.99% Variable APR applies
• Balance Transfer Intro APR: N/A

Fees

• Annual Fee: $0 introductory annual fee for the first year, then $95
• Balance Transfer Fee: N/A
• Cash Advance: Either $10 or 5% of the amount of each cash advance, whichever is greater.
• Foreign Purchase Transaction Fee: 2.7% of each transaction after conversion to US dollars. (see rates and fees)

Blue Cash Preferred® Card from American Express vs. Blue Cash Everyday® Card from American Express

Those who frequently spend in the bonus categories offered on the Blue Cash Preferred,  but can’t stomach an annual fee, may want to consider the Preferred’s no-annual-fee sibling card, the Blue Cash Everyday® Card from American Express. With this card you’ll earn 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%), 2% cash back at U.S. gas stations and at select U.S. department stores and 1% cash back on other purchases. Cash back is received in the form of Reward Dollars that can be easily redeemed for statement credits. So you’re earning less at supermarkets and gas and trading transit rewards for department store bonus earnings. Those who spend more than $61 a week on groceries and other supermarket items will come out ahead with Blue Cash Preferred in spite of the $0 introductory annual fee for the first year, then $95 annual fee.

Blue Cash Preferred® Card from American Express vs. Chase Freedom Flex℠

Although the Blue Cash Preferred Card and the no-annual-fee Chase Freedom Flex don’t offer the same bonus spending categories, the Freedom Flex also offers the ability to earn significant bonus cash back in its top categories.

The Chase Freedom Flex earns 5% cash back on quarterly rotating categories (once activated, up to $1,500 in spending each quarter) and travel purchased through Chase Ultimate Rewards. It also offers 3% cash back at restaurants (including takeout and delivery) and at drugstores and 1% cash back on all other purchases.

Those whose budgets lean more towards travel and dining out may find that the overall rewards structure of the Freedom Flex benefits them more than the Preferred. Because the two cards cover different areas of common spending, it may also make sense to pair the two cards to earn elevated rewards across a wide swath of categories.

Blue Cash Preferred® Card from American Express vs. Citi® Double Cash Card

The Blue Cash Preferred Card is an entirely different cash-back animal from the beast that is the Citi Double Cash Card. The Citi Double Cash offers up to 2% cash back on all purchases—1% when purchases are made and an additional 1% upon paying for them—and not a lot else when it comes to cash back.

Unlike the Blue Cash Preferred which only has a 0% APR offer on purchases, the Double Cash has a 0% intro for 18 months on Balance Transfers followed by the card’s standard rate APR of 13.99% - 23.99% (Variable). The Citi Double Cash card does have a balance transfer fee of 3% of each balance transfer; $5 minimum. This should be taken into consideration before transferring a balance.

These two cards could also work well together for those who find their spending priorities align well with the higher earning categories of the Blue Cash Preferred Card but don’t want to lose out on higher cash back opportunities all-around.

Although the Blue Cash Preferred Card from American Express has a $0 introductory annual fee for the first year, then $95 annual fee, it can be offset by the welcome bonus in the first year. Beyond that, healthy cash-back opportunities exist for those who spend up to $6,000 at grocery stores each year and for those who spend a decent amount at gas stations or on transit.

Although its rewards-earning potential could be stellar for the right person, the card isn’t a fit for everyone. It likely won’t work well for international travelers and there are more rewarding cards that for those who fly often and/or stay in hotels with some regularity. But for those looking to maximize cash back in common everyday categories, this is a great card—especially paired with another that earns a high rate of earning on other purchases.

To view rates and fees of the Blue Cash Preferred® Card from American Express, please visit this page.

To view rates and fees of the Blue Cash Everyday® Card  from American Express, please visit this page.