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

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Costco ended its exclusive credit card arrangement with American Express in June 2016, so this article is out of date. As a result of the Costco-AmEx split: 

  • The TrueEarnings® Card from Costco and American Express was discontinued.
  • Costco stores stopped accepting American Express cards — including the Blue Cash Preferred® Card from American Express, described in this article.
  • The only credit cards now accepted at Costco stores are Visa cards. 
  • Members who want a Costco-branded card can now get the Costco Anywhere Visa® Card by Citi. Read our review of that card here

 

American Express now offers two Blue Cash cards: the Blue Cash Everyday® Card from American Express and the Blue Cash Preferred® Card from American Express. The entire Blue Cash line-up is tailored towards family spending. We favor the Blue Cash Preferred® Card from American Express over the Blue Cash Everyday® Card from American Express, since you get a much higher rewards rate for its annual fee of $0 intro for the first year, then $95, which is offset by its bonus offer for new cardholders: Limited Time Offer: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Offer Expires 12/10/2020. Terms Apply. The Blue Cash Everyday® Card from American Express also has a bonus offer for new cardholders. If you spend $61 a week at the supermarket, you’ll more than make up for the Blue Cash Preferred® Card from American Express‘s annual fee.

Looking at these rewards categories, the question we had is how the Blue Cash Everyday® Card from American Express and the Blue Cash Preferred® Card from American Express compare to the issuer’s other family-friendly card: the TrueEarnings® Card from Costco and American Express, 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® Card from American Express: it gives a whopping 6% cash back at U.S. supermarkets, on up to $6,000 a year in spending (then 1%); 6% cash back on select U.S. streaming subscriptions; 3% cash back at U.S. gas stations and on transit; and 1% cash back on all other purchases. Terms Apply.

However, frequent Costco shoppers – particularly those who buy most of their gas there – will prefer the TrueEarnings® Card from Costco and American Express. Neither of the Blue Cash cards earns bonus rewards on Costco gas, while the TrueEarnings® Card from Costco and American Express does. The TrueEarnings® Card from Costco and American Express 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 TrueEarnings® Card from Costco and American Express rather than 1% with the Blue Cash. In fact, for all you Hummer owners out there, the TrueEarnings® Card from Costco and American Express is one of the best gas rewards credit cards around.

Beyond gas, the TrueEarnings® Card from Costco and American Express also offers bonuses for spending on U.S. restaurants and travel, while the Blue Cash cards favor U.S. supermarkets and select U.S. department stores. 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 Blue Cash Preferred® Card from American Express is a clear winner with its 6% back on up to $6,000 spent at U.S. supermarkets a year and 3% on select U.S. department stores, which encompass everything from T-shirts to bikes to toilet paper. Unlike the TrueEarnings® Card from Costco and American Express, the Blue Cash Preferred® Card from American Express has a bonus offer for new cardholders: Limited Time Offer: Earn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Offer Expires 12/10/2020. Terms Apply. 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®.