Brace yourselves, American Express Blue Cash cardholders. We’re sad to report the Blue Cash will now impose a $6,000 cap on grocery bonus rewards, effective November 1stfor new customers and upon renewal in 2013 for existing customers. Alas, what’s good doesn’t last. But does this mean you should write off the Blue Cash altogether? Not so fast. For all that you can’t rewards-hack to your heart’s content anymore, the Blue Cash is still a great way to get rewards on a good majority of your spending.
Capped is the new blue
Blue Cash Preferred cardholders used to earn an unlimited 6% cash back at standalone grocery stores and 3% on gas and department stores, while Blue Cash Everyday cardholders earned 3% and 2%, respectively. With unparalleled rewards rates on the most typical expenses, the uncapped Blue Cash was a steal for anyone who eats or drives. Which is exactly why it couldn’t last. One main draw of the Blue Cash was that you could earn 6% rewards on almost anything, by purchasing gift cards at the supermarket checkout line. By paying for prepaid cards at the register, you could earn the sky-high rewards rate on Amazon, Starbucks, whatever. And that’s still feasible. In 2011, the average consumer spent$3,800 on groceries, leaving $2,200 for gift card purchases. According to an email from an American Express spokeswoman, few people get close to the $6,000 cap:
The cap preserves our ability to continue rewarding our Cardmembers at 3% and 6% cash back for their supermarket purchases on these cards. We set the cap at $6,000 because it more than covers what the majority of Cardmembers are spending on supermarket purchases.
Left implied is the “…if you’re playing fair.” When it comes down to it, hacks are hacks, and loopholes close. Still, 6% rewards on $6,000 is fairly substantial.
What is a stand-alone grocery store, anyway?
Stores whose primary product is food – such as Safeway, Whole Foods and Stop & Shop – can, generally speaking, be considered stand-alone grocery stores. On the other hand, warehouses like Costco or megastores like Walmart or Target (which sell produce, but don’t consider it their main offer) don’t count. An explanation from American Express Canada might give some insight:
Purchases at merchants where [grocery] sales are not their primary business (including superstores, wholesale clubs, alcohol retailers and general merchandise retailers) and purchases at sponsors do not qualify for the earn rate in this category.
|Blue Cash Preferred® Card from American Express||Blue Cash Everyday® Card from American Express|
|Earn 150 Reward Dollars after you make $1,000 in purchases in the first three months of Cardmembership.||Earn 100 Reward Dollars after you make $1,000 in purchases in the first three months of Cardmembership.|
|Intro APR Promo|
|0% on Purchases for 12 months||0% on Purchases for 12 months|
Blue Cash versus the competition
In any case, many other groceries rewards cards impose caps as well. Here’s how the Blue Cash cards stack up against major grocery cards: Bank Americard Cash Rewards
The Bank Americard Cash Rewards, the closest equivalent to the Blue Cash Everyday, earns 3% on groceries and 2% on gas up to $1,500 in combined spending per quarter. The Everyday wins out for a few reasons:
- Only groceries are capped. The Bank Americard limits your bonus rewards on both gas and groceries.
- The Bank Americard limits combined purchases. Let’s say you spend $1,500 on gas in a given quarter, and only afterwards spend money on groceries. You’d be stuck earning the 2% gas rewards rate instead of the higher 3% groceries rate.
- Longer capping period. The Bank Americard limits your rewards to $1,500 spent per quarter, or $6,000 per year – the same as the Everyday. But let’s say you spent $1,000 in two quarters and $2,000 in two quarters. With the Bank Americard, you’d earn rewards only on $5,000, whereas on the Everyday you’d earn rewards on the full $6,000.
The 5% bonus cards
The Chase Freedom named groceries as one of its 5% rewards categories for Q2, subject to the rewards cap of $1,500 per quarter.The U.S. Bank Cash+ offers it as one of the categories on which you can earn 2% rewards. The U.S. Bank card lets you pick two categories from a rotating list to earn 5% rewards, and between gas, groceries or drugstores for 5% rewards. We’d assume that since it’s a 2% reward category, groceries are unlikely to show up on the Cash+’s 5% list. And between the rewards cap and having to leave your groceries to the vagrancies of fate, the Freedom isn’t a great choice for dependable grocery rewards. The Blue Cash will consistently give 6% or 3% rewards on groceries, and though there is a cap, it’s about the same as the Freedom’s cap on all bonus rewards.
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