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AmEx Unveils Two New Rewards Cards: Blue Cash Everyday and Preferred

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American Express has changed the Blue Cash to two new versions: the Blue Cash Everyday, and the Blue Cash Preferred.

The old Blue Cash card had “everyday categories” that earned extra rewards: spending on drugstores, supermarkets and gas (though gas from Costco and other warehouse stores doesn’t count for the bonus). It also came with a threshold rewards system: for every dollar spent up to $6,500 a year, cardholders received 1% back on these everyday categories and 0.5% back on everything else. For spending above $6,500, cardholders got 5% back on everyday and 1.25% back on everything else.Both have a base rewards rate of 1%. The Everyday gives 2% back on gas and department stores and 3% back on supermarkets, while the Preferred gives 3% back on gas and department stores plus 6% back on groceries. Cardholders also receive a bonus, $25 for the Everyday and $75 for the Preferred, for referring a friend to the Blue Cash cards. There’s no bonus for referring someone to another AmEx card.

Despite our past gripes about the American Express Blue Cash, the newcomers will be welcome improvements for suburbanites who don’t necessarily reach the spending thresholds for maximum rewards. Like everything in life, the new Blue Cash Everyday and Preferred come with tradeoffs, but for many families, the changes are for the better.

What’s different about the new Blue Cash cards?

The old Blue Cash had no annual fee, while the new ones offer an option to pay the fee and receive better rewards. The new ones also have no spending threshold: you earn the top rewards rate from the first dollar spent. As for redeeming the rewards, the previous Blue Cash card only allowed users to get their cash back once a year, at year end, but the Blue Cash Everyday and Preferred will allow for redemptions at any time, in increments of $25 or higher.

The new rewards program has shifted primarily towards lower rates in a greater number of categories, so depending on your spending habits, you may prefer the old or new rewards system. The new structure rewards department stores rather than drugstores, but has a lower rewards rate almost across the board. The only category with a higher earn rate is supermarket spending with the Blue Cash Preferred. However, the lowered rewards rates will be offset by the nixed spending threshold for many households.

A nice feature of Amex’s new Blue Cash cards is that the rewards program stays constant. Some rewards cards have rotating 5% bonus categories that change by the quarter and require you to enroll every three months to get your rewards. AmEx’s program is simple: you don’t have to opt in, or keep abreast of changing categories.

When should you go with Blue Cash?

There are a number of excellent rewards cards out there. Some have good base rates, but most privilege certain purchases with “bonus” rewards. So choosing the right credit card for your own needs means analyzing your own spending habits, and picking the card that will reward them.

For social butterflies: The AmEx Blue Cash cards are not for those in their thirsty twenties. They favor groceries over dining out and department store shopping over movies. If you live in a city and take public transit or taxis, the gas rewards won’t be particularly helpful. Our choice for these urban socialites is the Citi Forward, which pays out 5% rewards on music, movies, books, restaurants and bars (it even works with small, non-chain restaurants), and 1% on everything else.

For Ramen-noshers: If you’re single, frugal, public-transit-taker or biker who grows her own vegetables and doesn’t often shop at department stores, you won’t be helped out much by AmEx’s preferred categories. We suggest a rewards card with no annual fee, if you won’t be putting much money on the card. If you have a Fidelity investment, retirement, or checking account, the Fidelity American Express contributes 2% of all your purchases to your account and charges no annual fee.

For suburbanites: Do you buy groceries for a family of four (especially one that includes a teenage boy), buy a lot of gas, and/or shop at Macy’s far too often (perhaps replacing the rapidly outgrown clothes of said teenage boy)? Then the Blue Cash cards are perfect for you. They reward the purchases of those who drive a lot, and cook most of their meals at home. They also favor department stores over smaller boutique stores. It’s a card tailored to the spending habits of commuters and busy parents. The closest competitor for those who match this profile is the TrueEarnings from Costco, which pays 3% on gas and restaurants, and 2% on travel.

Which is better: the old Blue Cash, the Everyday or the Preferred?

If you decide that the gas/groceries/department store rewards are the way to go, you now must select a card in the Blue Cash family. Existing Blue Cash customers will have the option to either keep their current rewards program, or switch to the Everyday or Preferred, but new AmEx customers will only have the new versions to choose from.

If you already have a Blue Cash card, consider staying with the old one if you a) spend a lot of money, b) spend a lot on gas, or c) shop at drugstores a lot. You should switch if you a) don’t spend quite enough money to maximize rewards over the $6,500 spending threshold or b) frequent department stores more than drugstores.

Between the Blue Cash Everyday and the Blue Cash Preferred, the Preferred is almost always the better option. The Preferred card offers twice the rewards on supermarket purchases, and 1.5 times the rewards on gas and department stores. That means the deal is worth it if you can make up the $75 annual fee in spending in those categories.

So when should you go with the old Blue Cash, the Everyday or the Preferred? We’ve broken down a few different spending scenarios, in terms of money spent in each category per month – it’s far easier to calculate how many times you fill up in four weeks than fifty-two. However, the verdict is the savings you’d get from using the chosen card over the course of a year.

Spending Profile Monthly Spending** Category Breakdown Rewards Rate after Fees Best Blue Cash Card
Average US consumer* $1,713
  • Drugstores: $132
  • Groceries: $574
  • Gas: $226
  • Department stores: $150
  • Preferred: 2.75% after annual fee
  • Blue Cash Everyday: 1.89%
  • Old Blue Cash: 2.49%
Preferred
Light-spending consumer $1,170
  • Drugstores: $70
  • Groceries: $400
  • Gas: $150
  • Department stores: $100
  • Preferred: 2.60%
  • Everyday: 1.90%
  • Old: 2.09%
Preferred
Smaller household $1,325
  • Drugstores: $100
  • Groceries: $450
  • Gas: $150
  • Department stores: $100
  • Preferred: 3.96%
  • Everyday: 2.55%
  • Old: 2.41%
Preferred
Environmentally friendly $900
  • Drugstores: $25
  • Groceries: $500
  • Gas: $0
  • Department stores: $75
  • Preferred: 3.25%
  • Everyday: 2.19%
  • Old: 1.85%
Preferred
Single commuter $710
  • Drugstores: $35
  • Groceries: $175
  • Gas: $100
  • Department stores: $50
  • Preferred: 1.77%
  • Everyday: 1.70%
  • Old: 1.23%
Preferred

*From the US Bureau of Labor Statistics Consumer Expenditure Survey. Other values are our own estimations, for illustrative purposes.
**Total monthly spending put on the card

It largely comes down to how much you’ll put on the card. If you spend substantially more than the $6,500 threshold of the old Blue Cash, you’ll benefit greatly from the 5% rewards on gas, supermarket and drugstore spending, as well as the bumped-up base rewards rate. On the other hand, if you spend a lot of money at department stores, but don’t put a lot on your card overall, you’re better off with the new one.

See how the Blue Cash cards stack up against the competition with our cash back credit card finder!

  • Rsbk

    I have the American Express Preferred cash card. It’s all great if the merchants you purchase things from would cooperate. After speaking with American Express about my transactions that didn’t show up under the “fuel” category because the merchant categorized my gas transaction as “Merchant Snack” I was told that I would have to contact each merchant and ask them to change the wording on their card machine to make it apply. So I am currently very disappointed.

    • Rsbk

      I do need to make a correction to my previous comment. After speaking with American Express again they assured me that all of my charges do apply to a category. The person I spoke with previously apparently didn’t have correct information. This person assured me that the gas transaction that was categorized as “Merchant Snack” did qualify as a gas purchase. I’m a lot happier now!

  • inquisitor

    So if I shop at Wal-Mart weekly for my groceries (not a Neighborhood market) is that going to earn the 3%?

  • laura lou

    With Chase freedom, you have to keep $15,000.00 total in that bank for rewards, right? Do other banks require you to keep money in their banks for cash rewards?

  • Matt Hess

    I know this is old, but I’m assuming Costco qualifies as a grocery store? And if I buy gas from a grocery store that has an attached gas station, would that count as a gas station or grocery store? Thanks for the post.

    • http://www.doctorofcredit.com/ doctorofcredit

      Should do. Usually they have different terminals for the gas station section so it’ll depend on where you make your purchase.