Post image for Everyday Rewards: Costco American Express vs. AmEx Blue Cash Preferred

Everyday Rewards: Costco American Express vs. AmEx Blue Cash Preferred

by

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 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months. 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. signup bonus (the Everyday’s bonus is Get 50 Reward Dollars, redeemable for a $50 statement credit, after you make $1,000 in purchases with your new Card in the first three months. 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. . 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
American Express Blue Cash Everyday Credit Card
Apply Now

on American Express's
secure website

*
American Express Blue Cash Preferred Credit Card
Apply Now

on American Express's
secure website

*
American Express Costco Credit Card
Apply Now

on American Express's
secure website

Signing bonus Get 50 Reward Dollars, redeemable for a $50 statement credit, after you make $1,000 in purchases with your new Card in the first three months. 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. Get 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months. 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. None
Annual fee None $75 None, but $50 Costco membership required
Base Rewards 1% 1% 1%
Groceries 3%** 6%** 1%
Gas (non-Costco) 2% 3% 3%***
Gas (Costco) 1% 1% 3%***
Department Stores 2% 3% 1%
Restaurants 1% 1% 2%
Travel 1% 1% 2%
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%

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.
  • Pingback: Everyday Rewards: Costco American Express vs. AmEx Blue Cash … | Supreme Credit Cards

  • disqust101

    Amex Blue wins hands down in EVERY category. You get 6% at grocery stores and can buy Visa and Amex gift cards that you can use for all your spend – including gasoline.

    • Anne Fischer

      can you actually buy gift cards at the grocery store and use them to buy gas and get the 6% off?

      • Thee Gooch

        Yes. They are coded as groceries since they were purchased at a store that is coded as a grocery store.

  • Jason Putnik

    This might be an obvious question, but are purchases at Costco, not including gas, considered groceries? Because if so, Blue Cash Preferred would be the obvious choice for me.

    • http://twitter.com/TheAshleyCarter Ashley

      No, the 6% off groceries refers to supermarkets, not “warehouses or superstores” so Costco is not included.

  • mary

    I have the Blue Cash Everyday card, and Costco (non-gas) purchases do NOT count as groceries

    • closingracer

      Because it isn’t … It is considered wholesale which it is

  • disqus_ZpnAIapZoM

    I have seen $150 signing bonus for Blue Cash Preferred through another credit card website.but I saw no mention of waiver of 1st year annual fee.

    • http://www.facebook.com/mdmangus Michael Mangus

      On my first statement it showed the $75 fee, so it is not waived. I also spent enough to get the $150 signing bonus on first statement too. So first year not waived other than treating the sign-up bonus towards it.

      • http://www.nerdwallet.com/ NerdWallet

        Thank for catching the error, Michael! We have updated accordingly. Though if you’re not averse to fees on principle, the higher rewards rate + signup bonus makes the Preferred pretty attractive.

  • HopelesslyFaithful

    so what supermarkets does the preferred card work for? Jewel, Dominick, food lion, albertson, krogers, supervalue, and any others? Can anyone confirm which of those work or if all of them? Fresh market?

    • http://www.nerdwallet.com/ NerdWallet

      Hey there,

      The Blue Cash Preferred should work at most grocery chains, such as Safeway, Food Lion, Dominick’s, Jewel, Kroger’s, Trader Joe’s and Whole Foods; it won’t work at department stores that happen to sell fresh foods like Walmart or Target.

      • HopelesslyFaithful

        thanks i’ll confirm if it works at jewel next time i go and confirm what it works for

  • Jay Kresge

    I just wanted to clarify one error in the article. I had the Blue Cash preferred for about 2 years and stepped down to the Everyday last week. Target (like Wal-Mart) is classified as a warehouse/wholesaler, not a department store. You will not get the 2%/3% deparment store bonus on the Blue Cash cards for shopping at Target.
    This means that if you are primarily a Costco shopper, and you get your gas there exclusively, your Blue Cash is essentially 1% for normal purchases, 1% for groceries (at Costco), 1% for gas (at Costco), and 2% for department stores (JC Penny, Kohls, etc., there is a list on the Amex website). If you’re a person who wants to shop primarily at Costco, the best deals are the Costco card, or the Fidelity Amex (which is 2% on EVERYTHING). Unless you spend a ton on gas, that 3% on gas and 1% on all others isn’t going to balance out to 2%, so the Fidelity will be the best deal.

  • Thee Gooch

    My burning question is – which is better value for groceries in general? The CostCo/TrueEarnings duo, or the Grocery Store/Blue Cash duo?