Advertiser Disclosure

American Express Blue Cash Preferred Review: Best in Class for Big Grocery Buyers

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.
American Express Blue Cash Preferred Credit Card Review

Blue Cash Preferred® Card from American Express Editor's Rating: 4.4 / 5

The Blue Cash Preferred® Card from American Express sits among the elite in cash-back credits cards and is perhaps the ideal gas-and-groceries card.

BADGE_Top10CreditCards_EverydaySpendingIt offers an eye-popping 6% cash back at grocery stores and a generous 3% back at gas stations and select department stores, plus 1% cash back on everything else. Those premier rewards come at a cost, though: an annual fee of $95. That’s pricey for a cash-back credit card, especially since most of its competitors charge no annual fee.

Nevertheless, the card’s high rewards rates will more than make up for the fee for many cardholders, especially those with families. The decision becomes a break-even analysis: Will you spend enough on the card, especially on gas and groceries, to quickly cover its cost and start earning a profit? Let’s take a closer look.

Blue Cash Preferred® Card from American Express

Apply Now on American Express's secure website

Pros

  • Leading cash back rewards for groceries
  • Sign-up bonus
  • 0% APR for 12 months on purchases and balance transfers

Cons

  • Has annual fee - but if you spend more than $31/week the rewards offset the fees
  • American Express isn’t accepted at as many merchants as Visa or MasterCard

Bonus Offer

Special Offer - Earn 5% cash back on eligible travel purchases in the first 6 months, up to $200. Plus, earn $150 back after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply

Annual Fee

$95

Intro APR Promotions

0% on Purchases for 12 months and 0% on Balance Transfers for 12 months

APR

  • APR: 13.24%-23.24% Variable
  • Penalty APR: Up to 29.49%, Variable
  • Cash Advance APR: 25.49%, Variable

Card Details

  • Special Offer - Earn 5% cash back on eligible travel purchases in the first 6 months, up to $200.
  • Plus, earn $150 back after you spend $1,000 in purchases on your new Card within the first 3 months.
  • You will receive cash back in the form of statement credits.
  • Everyday Cash Back: 6% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%); 3% at U.S. gas stations; 1% other purchases. Terms and limitations apply.
  • No rotating reward categories. No enrollment required.
  • Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. You can only earn cash back on eligible purchases.
  • 0% intro APR on purchases and balance transfers for 12 months, then a variable rate, currently 13.24% to 23.24%, based on your creditworthiness and other factors.
  • Terms and Conditions apply.
  • View Rates and Fees

Blue Cash Preferred® Card from American Express: Benefits and basics

The annual fee on the Blue Cash Preferred® Card from American Express sets a high bar for its rewards. You can clear it fairly easily if you regularly spend a lot at the grocery store and the gas pump. And if you earn the card’s sign-up bonus, your first year-plus with the card will cost you nothing. Here are the card’s best features.

Big grocery store rewards

The industry leading cash-back rate on groceries is this card’s primary allure. You get 6% cash back at grocery stores, on up to $6,000 a year in spending. After you hit the cap, groceries earn 1%.

The average U.S. household of four spends about $5,800 on food at home annually and hundreds more on housekeeping supplies and personal care products that are also common purchases in supermarkets, according to the most recent Consumer Expenditure Survey by the U.S. Bureau of Labor Statistics. So a family of four could easily max out their 6% rewards.

Nerd Tip

Supermarkets often sell gift cards for a variety of stores, restaurants and online retailers. You can extend your 6% rewards beyond groceries by buying gift cards at the supermarket with your Blue Cash Preferred® Card from American Express and then using them yourself.

This card’s headline feature comes with a big caveat: The 6% rewards are available only at supermarkets. American Express’ definition of supermarkets excludes wholesale clubs such as Sam’s Club, superstores like Target and Wal-Mart, specialty food stores and others. So consider not only how much you spend on groceries, but also where you buy them.

Gas and department store rewards

The 3% cash back at gas stations and department stores is also among the best you can get anywhere — and those rewards are unlimited. That’s a boon for big shoppers, car commuters and owners of gas-guzzling vehicles. However, restrictions apply here, too:

  • The higher gas rewards are available only at traditional stand-alone gas stations. Warehouse clubs, superstores and supermarkets that sell gas don’t count, according to American Express.
  • Elevated rewards for department stores apply only at named merchants, although the list includes most of the largest national department store chains, including Macy’s, Kohl’s and Sears. Again, discount retailers such as Target and Wal-Mart are excluded, and your regional department store chain might not count. American Express maintains a list of qualifying stores.

Sign-up bonus

The Blue Cash Preferred® Card from American Express offers a sign-up bonus, something that not all of its cash-back competitors do: Special Offer - Earn 5% cash back on eligible travel purchases in the first 6 months, up to $200. Plus, earn $150 back after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply That more than covers the annual fee for the first year.

0% introductory APR

The card also has a decent zero-interest period: 0% on Purchases for 12 months and 0% on Balance Transfers for 12 months, and then the ongoing APR of 13.24%-23.24% Variable. That makes it a decent option for those looking to finance a big purchase or pay down existing debt. But if you plan to carry a balance from month to month beyond that period, you’re probably better off with a low-interest credit card. In general, rewards cards are better for people who don’t revolve a monthly balance.

Blue Cash Preferred® Card from American Express: Pitfalls and other possibilities

Even with its high rewards rates and sign-up bonus, the Blue Cash Preferred® Card from American Express isn’t for everybody. Here are the potential drawbacks.

High annual fee

As with any card with an annual fee, you start the year in a hole. You have to earn enough rewards to pay the annual fee before you net any value.

With the mushy value propositions of some rewards, such as airline miles, airport lounge access and concierge service, calculating a break-even point can be cumbersome, inexact and changing. Not so with a cash-back card. It’s all about the dollars.

Considering the 6% grocery rewards alone, you would need to spend about $31 per week at the supermarket to break even on the annual fee. That’s an accessible amount for most people, and it doesn’t even consider elevated rewards on purchases at gas stations and department stores, which only hasten the break-even point. Expressed a different way, if you spent $31 per week to fill each gas tank in two family cars, your supermarket cash back is all profit.

The point is, many cardholders can erase the annual fee quickly. And again, if you meet the requirements of the sign-up bonus, your first-year annual fee is more than paid for.

American Express Blue Cash Everyday Credit Card
Learn More
Still, some people don’t like the idea of an annual fee under any circumstances. For them, there’s a cousin card, the Blue Cash Everyday® Card from American Express, which offers the same bonus categories but at reduced rewards rates, for an annual fee of $0. This card gives 3% rewards on groceries, also up to $6,000 annually (then 1%), plus 2% at gas stations and department stores and 1% elsewhere. Our comparison of the two Blue Cash cards goes into more detail, and includes a calculator for you to compare rewards.

The natural question is: At what spending level is the Blue Cash Preferred® Card from American Express a better deal? Using the same groceries-only analysis, if you spend at least $61 per week at supermarkets, you’ll earn more with the Blue Cash Preferred® Card from American Express, even after the annual fee.

Citibank Citi® Double Cash Card Credit Card
Learn More
Chase Freedom Credit Card
Learn More
Discover It Credit Card
Learn More

 

Other no-fee alternatives include the low-hassle Citi®Double Cash Card – 18 month BT offer, which pays 1% cash back on all your purchases, then another 1% back when you pay them off. Or consider the generous 5% rotating bonus rewards categories of the Chase Freedom® and Discover it® - Cashback Match™, which have in the past included grocery stores and gas stations.

Bonus rewards cap

For big households, a major drawback of the great grocery giveback is the $6,000 annual cap on spending eligible for the 6% rewards. That means the most you could earn back at that level is $360 before additional supermarket purchases net you a mundane 1% back. Of course, you could monitor your rewards and switch to a different card for groceries after hitting the cap. One way to make the most of the Blue Cash Preferred® Card from American Express is by strategically using it with others.

Lower acceptance

American Express cards are not as widely accepted by U.S. merchants as Visa, MasterCard and Discover, and acceptance internationally also lags behind that of Visa and MasterCard. You might have to carry a backup card that is more widely accepted. The card is not ideal to use abroad, either, both because of acceptance issues and because it charges a 2.7% fee on international purchases. Some cards charge no foreign transaction fee.

Is the Blue Cash Preferred® Card from American Express right for you?

The Blue Cash Preferred® Card from American Express is a superior cash-back card and can be an ideal everyday card as long as you use it enough overcome its annual fee and are comfortable with its restrictions on where you shop for groceries and gas.

Updated Aug. 11, 2016.

Gregory Karp is a staff writer at NerdWallet, a personal finance website. Email: gkarp@nerdwallet.com. Twitter: @spendingsmart.