Everyday Rewards: Costco American Express vs. AmEx Blue Cash Preferred
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American Express now offers two new Blue Cash cards: the Blue Cash Everyday and the Blue Cash Preferred. The entire Blue Cash line-up is tailored towards family spending: gas, groceries, typical household purchases. We favor the Blue Cash Preferred over the Everyday, since you get a much higher rewards rate for a $75 annual fee that’s offset by a Get $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit. signup bonus (the Everyday’s bonus is Get $100 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $100 back in the form of a statement credit.. If you spend $50 a week on groceries, you’ll more than make up for the annual fee.
Looking at these rewards categories, the question we had is how the Blue Cash Everyday and the Blue Cash Preferred compare to the issuer’s other family-friendly card: the American Express Costco TrueEarnings, which in addition to being a great gas credit card, also privileges travel purchases.
The bottom line: Most people will do better with the Blue Cash Preferred: it gives a whopping 6% back on up to $6k spent on groceries and includes gas and department store purchases in its rewards categories, so you’ll earn extra cash back when you shop for clothing/home furnishings/household items at Target, when you buy groceries for a family of four at Safeway, and when you fill up while running your errands.
However, frequent Costco shoppers – particularly those who buy most of their gas there – will prefer the TrueEarnings. Neither of the Blue Cash cards earn bonus rewards on Costco gas, while the TrueEarnings does. The AmEx Costco also pays out in once-a-year Costco vouchers, which have to be redeemed in-store, either for Costco goods or for cash.
So which one is best for you? Depends where you buy your gas
The deciding factor will be where you buy your gas: if you fill up primarily at Costco, you’ll be getting 3% back on gas with the Costco AmEx rather than 1% with the Blue Cash. In fact, for all you Hummer owners out there, the Costco TrueEarnings is one of the best gas rewards credit cards around.
Beyond gas, the Costco AmEx also bonuses for spending on restaurants and travel, while the Blue Cash cards favor department stores and supermarkets. So a frequent traveler by land and air who dines out often might find the TrueEarnings to be a better deal. However, in order to make the Costco card worth it, you’d need to spend twice as much money dining out as you do on buying groceries, and spend $3 on travel for every $2 on department stores.
For those who don’t spend as heavily on the gas-travel-restaurant trinity, the Preferred is a clear winner with its 6% back on up to $6k spent on groceries a year and unlimited 3% on department stores, which encompass everything from T-shirts to bikes to toilet paper. Unlike the Costco card, the Preferred offers a $100 signing bonus. And rewards are paid out in cold hard cash back, whenever you’ve earned $25, rather than Costco vouchers you’ll only get once a year.
If you aren’t driving an SUV, feeding your spouse and 2.5 kids, or buying sundries at Target, you should probably take a look at one of the rotating-category rewards credit cards, like the Chase Freedom. Alternatively, the Citi Forward is geared more toward the city life: restaurants and entertainment get 5% back.
|Category||Blue Cash Everyday||Blue Cash Preferred||American Express Costco|
|Signing bonus||Get $100 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $100 back in the form of a statement credit.||Get $150 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive $150 back in the form of a statement credit.||Earn cash back: 3% US gas stations up to $4,000 per year in purchases; 2% US restaurants & eligible travel; 1% other purchases. See details.|
|Annual fee||None||$75||None, but $50 Costco membership required|
|Rewards||Cash back||Cash back||Costco voucher, redeemable for cash|
|Rewards redeemed||Anytime||Anytime||Once a year|
*Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period.
**Up to $6,000 spent annually; otherwise 1%
***Up to $4,000 spent annually; otherwise 1%