Full Review of American Express Blue Cash Preferred
Pros
Outstanding cash-back rewards at U.S. supermarkets and on select U.S. streaming services
Generous welcome offer for new cardholders
0% intro APR on purchases
Cons
$95 annual fee after the first year while comparable cards have none
2.7% fee on foreign transactions
Cashback rewards on groceries are capped, and some chains are excepted
American Express isn't as widely accepted as Visa or Mastercard
Pros Explained
- Outstanding Cash-Back Rewards, Especially at Supermarkets and Streaming Services: This card offers the top cash back rewards rate for groceries and streaming services in our database. It currently offers 6% cash back at U.S. supermarkets, on up to $6,000 in spending per year, and on select services like Hulu, Netflix, and SiriusXM.
- One-Time Offer for New Cardholders: The one-time offer is one of the most generous that’s currently available, and should be fairly easy to achieve. New cardholders can earn $250 back after you spend $3,000 in purchases on your new Card within the first 6 months of Card Membership. You will receive cash back in the form of a statement credit.
- 0% Intro APR on Purchases: For the first 12 months of membership, all purchases with this card have a 0% APR. That can be useful for financing a major purchase and paying it off before the introductory period is up. The APR increases from between 17.74% to 28.74%—a typical range—after the first year is up.
Cons Explained
- $95 Annual Fee: Although American Express offers a zero annual fee to new cardholders for the first year, the annual fee is $95 afterward. As a result, you'll need to use it fairly extensively to recoup the $95 expense after you’ve benefited from the zero annual fee introductory offer and generous first-year signing bonus. To break even on the fee within the year, you’ll need to spend at least $31 per week at a combination of supermarkets and streaming services or $62 per week on gas or transit. Naturally, you can mix spending in these categories, and supplement your rewards with other spending, which earns an unremarkable 1% cash back.
- Superstores and Warehouse Clubs Are Excluded from the Top Cash Back Earnings: Grocery purchases at superstores like Walmart and Target and wholesale clubs like Sam’s Club or Costco do not qualify for the 6% cash back tier, nor do gasoline purchases at these retailers gasoline qualify for 3% cash back. Rather, all purchases at these earn only the default 1% cash back. The same applies to groceries purchased almost anywhere else but a supermarket, such as at convenience stores. Online grocery shoppers are in luck, however, since some online services like FreshDirect are eligible for 6% cash back.
- 2.7% Foreign Transaction Fee: This charge makes the card at best a mediocre choice for travel, since some travel rewards cards waive this fee. American Express charges a 2.7% foreign transaction fee, which is triggered whenever a foreign merchant or bank is involved in a credit card transaction.
- American Express Isn't as Widely Accepted as Visa, Mastercard, or even Discover: While American Express can be used at thousands of merchants, its level of international acceptance is significantly lower than other major card networks, though its domestic acceptance at near parity with Visa, Mastercard, and Discover. It is, however, accepted by most major streaming services. Before you decide on this card, though, check that the merchants you frequent, and especially your local supermarkets and gas stations, accept American Express.
The American Express Blue Cash Preferred card is best suited to those who buy their groceries at traditional supermarkets or subscribe heavily to streaming services, or both. Purchases in these categories come with an unequaled 6% rewards rate. If you maxed out your spending at supermarkets at the capped limit of $6,000, for example, you'd earn $360 in cash back—more than three times the $95 annual fee. Spending $50 per month on streaming services like Netflix, Hulu, Spotify, HBO Now, and ESPN+ could net you another $36 in cashback per year.
The card is also a fine choice for commuters since it earns a 3% cash back on gas and transit purchases. If you charge to this card the average amount spent by a household on gas, which was $1,568 in 2020 according to the U.S. Bureau of Labor Statistics, you'd earn $47 in cash back. If you're a transit commuter, you could earn about $25 a year in cash back if you spent an average of $70 per month on transit passes.
Blue Cash Preferred Card One-Time Offer
Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
That’s a relatively small spend for a relatively hefty reward. Indeed, the one-time offer represents over a 10% return on the card’s initial spend alone, on a net basis for the year. (Our calculation subtracts the card’s $95 annual fee from the net reward. It does not, however, count the extra $10 to $60 you’d earn in cash back from the required spend within three months, or the continuing cash back you might make by using the card for the remainder of the year.)
By comparison, other cards have spending requirements as high as $3,000, but often for cash rewards of at most $150 or $200. With other cards, the one-time offer comes in the form of points, making them a less direct form of reward than the statement credit you earn with the American Express Blue Cash Preferred Card, which essentially represents cash in your pocket.
Rewards Earning Details
This card offers 6% cash back at supermarkets in the U.S, up to a maximum spend for rewards of $6,000; 6% cash back on most streaming video and audio services in the U.S., and 3% cash back on transit and gas expenses. All other purchases earn a 1% cash back reward.
All streaming service purchases must be on American Express' approved list in order to qualify for cash-back rewards. The list is expansive, encompassing most or all of the major audio (Spotify, Audible, Apple Music) and online video (Netflix, Hulu, HBO Now) streaming services. Online cable alternatives (Sling TV, YouTube TV, DirectTV now) are also included, as SiriusXM service, either online or via satellite. Not included, notably, is service billed through major cable or satellite TV services.
Transit purchases include taxis, ride-sharing services, ferries, tolls, parking, buses, and subways. Spending on airfare, car rentals, and cruises is not eligible.
Rewards Redemption Details
Cash back rewards are received in the form of rewards dollars that can be redeemed as a statement credit once they total $25 or more.
How to Maximize Your Rewards
The best way to get the most out of this card is to max out the 6% cash back on supermarket purchases, up to the $6,000 cap for receiving the amount of that reward. Then, charge all your streaming services to the card to earn the same hefty 6% rate, as well as purchasing as much as possible of your gas and other transit expenses with the card, to earn a still-generous 3% in cash back. All other purchases earn 1%, which can still add up.
Average Case
Let's say your family spends $7,061 on groceries per year, $348 on streaming services, $254 on transit, and $1,977 on gas. You’d already earn $458 in cash-back rewards from this card, without considering other miscellaneous purchases that would earn 1% in cash back.
That's a weekly spend of $135.79 at supermarkets (assuming you buy all of your groceries there), $6.69 on streaming services, $4.88 on transit, and $38.02 on gas.
Aspirational Case
Families can really maximize this card by opting to buy more items at the supermarket, shifting their TV-service spending from ineligible cable and satellite services to eligible streaming services, and charging all local transit and gas purchases to the card.
For example, if you can't reach the $6,000 cap for supermarket spending (to earn $360 in cash back) through food alone, supplement your spending, thereby purchasing pharmacy products, pet supplies, household cleaners, and other items that you might otherwise buy elsewhere. Cutting the cord on cable or satellite and increasing your spending on streaming services could also help. In addition to on-demand providers such as Netflix, services like DirecTV Now are often cheaper than cable or satellite while still allowing for live TV streaming. You could save a further $36 a year by charging a $50-per-month cable alternative streaming service to the card.
And since this card doesn't charge for additional cards for others, adding the entire family to maximize spending on ride-sharing and gas would also be beneficial. A family that together spends $3,000 on gas annually, for example, would earn $90 in cash back.
Overall, that's $486 in cash-back rewards per year, again without counting in additional rewards from charging miscellaneous purchases to the card to earn 1% cash back.
Blue Cash Preferred Card Outstanding Benefits
- Buy Now, Pay Later: Pay no plan fees when you use Plan It(R) to split up large purchases into monthly installments during the first 12 months after account opening. Plans created after that incur plan fees.
Standard Benefits
- Fraud and return protection*
- Extended warranties*
- Free shipping through ShopRunner membership
- Rental car collision insurance (secondary to your own policy)*
- Sports, music, and event ticket presales, plus VIP access at some events
- Global Assist Hotline*
*Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
Cardholder Experience
American Express ranked number one, beating all other card ranked card issuers, in J.D. Power's 2021 U.S. Credit Card Satisfaction Study.
Customers can utilize the company's help center on its website or mobile app for inquiries about their card; they'll find frequently asked questions and how-to videos.
The customer service call center is available 24/7 at 800-528-4800. Members can also log into their account on the website or app and chat with a representative.
Security Features
Credit cards from American Express come with a slew of security benefits. Cardholders have access to free credit reports, credit report alerts, and credit score updates.
This card also has pre-purchase verification to confirm that your use of the card on certain purchases is authentic, as well as benefiting from Amex alerts for irregular account activity.
If you lose your card, American Express will replace it for free. It will be delivered within a few days, sometimes the next day.
Virtual credit card numbers can be made through the American Express Go portal, and international travelers can set up a PIN for additional security while on the go.
Fees to Watch Out for
This card doesn't come with a lot of fees, relatively speaking, and those it does carry are in line with industry standards. However, for international travelers, the 2.7% foreign transaction fee is in contrast to the absence of such a fee with some cards, including many aimed at travelers.
Our Verdict
The high rewards rate in this card's main categories—groceries, streaming services, transit, and gas—makes it a stand-out card for day-to-day spending, as opposed to cards whose most generous rewards are in travel or entertainment categories.
It's also a good fit for consumers who want a dual cash back reward. The 12-month 0% introductory APR provides the opportunity to finance a major purchase over a year's time while still earning rewards.
Pairing this card with a high flat-rate cash back reward card could make it an even better choice. The Citi Double Cash card, for instance, pays an unlimited 1% cash back when you buy and then an additional 1% when you pay for those purchases. That's essentially 2% cash back on all purchases, making this card a good option when paying for everything else. There is also no annual fee or cap on rewards purchases with Double Cash.
Though the American Express Blue Cash Preferred card is a good option for those seeking cash-back rewards, it's probably not the best choice for frequent travel, especially if it's outside the U.S. There's a 2.7% foreign transaction fee, and it lacks the higher cash back rates for travel purchases and other travel perks of cards that focus more on travelers.
To see the rates and fees for Blue Cash Preferred® Card from American Express, please see the following link: Rates and fees