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American Express Raising Annual Fee on Blue Cash Preferred

June 27, 2016
Cash Back Credit Cards, Credit Cards
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One of our favorite cash-back credit cards is getting a little more expensive: The annual fee on the Blue Cash Preferred® Card from American Express will be $95. That’s a $20 increase from before — not huge, but it changes the break-even point at which the rewards make up for the cost of carrying the card.

Here’s what the change will mean for you.

The basics of the Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express earns 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 (including such things as taxis, rideshares, parking, tolls, trains and buses); and 1% cash back on all other purchases. Terms apply.

The card also comes with a bonus offer for new cardholders: $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply.

» MORE: Read our full review of the Blue Cash Preferred® Card from American Express

When the new annual fee takes effect

The annual fee for the Blue Cash Preferred® Card from American Express has been $75. If you don’t have the card, applying by Aug. 3, 2016, will give you a year at the old rate. After that, the fee will go up to its new level.

For existing cardholders, your account renewal date determines when the new fee goes into effect.

“Existing card members will be charged $95 upon renewal beginning in September,” says William Tsang, director of public affairs for American Express. “So, if your card renews in July, you won’t see a $95 [fee] until next July.”

» MORE: NerdWallet’s best cash-back credit cards

The break-even point

Until now, you needed to spend about $25 per week at U.S. supermarkets to earn enough rewards to cover the annual fee on the Blue Cash Preferred® Card from American Express, according to NerdWallet’s calculations. With the new fee, you’ll need to spend about $31 per week at supermarkets to break even. That’s still an accessible amount for most people.

The increased annual fee also changes the calculations we use to compare the Blue Cash Preferred® Card from American Express with its cousin, the no-fee Blue Cash Everyday® Card from American Express. That card pays lower rewards rates — only 3% back on up to $6,000 in U.S. supermarket spending and 2% back at U.S. gas stations and select U.S. department stores. It also offers 1% cash back on all other spending.

(All information about the Blue Cash Everyday® Card from American Express has been collected independently by NerdWallet. The Blue Cash Everyday® Card from American Express is no longer available through NerdWallet.)

If you spend at least $61 per week at supermarkets, you’ll earn more rewards with the Blue Cash Preferred® Card from American Express than you would with the no-fee version.

» MORE: Read our comparison of the Blue Cash Everyday® Card from American Express and the Blue Cash Preferred® Card from American Express

Is the Blue Cash Preferred® Card from American Express still a good deal?

That depends on how much you spend on groceries and gas. For many people, the high rewards rate at supermarkets alone can cancel out the annual fee fairly easily.

If you’re allergic to paying any annual fee whatsoever, you might be happier with one of our best no annual fee credit cards.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: virginia@nerdwallet.com. Twitter: @vcmcguire.