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Clash of the Cash-Back Titans: Citi Double Cash vs. AmEx Blue Cash Preferred

Cash Back Credit Cards, Credit Cards
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If you like your credit card rewards in cash, and a lot of it, then the Citi® Double Cash Card – 18 month BT offer and the Blue Cash Preferred® Card from American Express should be on your radar, if not in your wallet.

These cards offer some of the highest cash-back rates available, although they structure their rewards quite differently:

The Citi® Double Cash Card – 18 month BT offer is a flat-rate card, meaning you get the same rate on every purchase. And what a rate it is: 1% cash back on every dollar you spend and another 1% on every dollar you pay back. Sweetening the deal, the annual fee on this card is $0.

The Blue Cash Preferred® Card from American Express offers tiered rewards, meaning you get a higher rate in certain categories. The card gives you 6% cash back at U.S. supermarkets on up to $6,000 a year in spending (then 1%); 3% cash back at U.S. gas stations and select U.S. department stores; and 1% cash back everywhere else. The catch? It has an annual fee of $95.

Look to your grocery bill

The signature feature of the Blue Cash Preferred® Card from American Express is the 6% cash back at U.S. supermarkets on up to $6,000 a year in spending. And for most people, this spending will be the deciding factor between these cards.

If you don’t spend much at supermarkets, you’re going to have to spend a lot of money at gas stations and department stores to make up for the annual fee — and make up the difference between this card and the Citi® Double Cash Card – 18 month BT offer. Really, if you don’t spend much at the supermarket, you have no business carrying the Blue Cash Preferred® Card from American Express at all.

But let’s say you’ve got a lot of mouths to feed. Counting supermarket shopping alone, and taking into account the annual fee and the $6,000 rewards cap, you would have to spend at least $1,710 a month before the annual rewards on the Citi® Double Cash Card – 18 month BT offer would surpass those on the Blue Cash Preferred® Card from American Express. That’s a lot of peanut butter.

There’s more to life than groceries, though. Transportation, dining out, dog grooming, traffic tickets, patio furniture — it all adds up. If the bulk of your ongoing expenses are incurred outside the supermarket aisle, the 1% + 1% everyday rewards rate on the Citi® Double Cash Card – 18 month BT offer is clearly better than the 1% rate on the Blue Cash Preferred® Card from American Express. The AmEx card’s 3% rewards at U.S. gas stations and select U.S. department stores could mitigate the damage a little — but remember, that annual fee still has to be paid whether you rack up big supermarket rewards or not.

Calculate your own rewards

Everyone’s situation is different, of course. So we’ve made it easy to estimate the cash-back rewards you’d get on these cards. Enter your own estimated monthly spending into our rewards calculator:

New cardholder perks

The Blue Cash Preferred® Card from American Express comes with a sign-up bonus that takes some of the sting out of the hefty annual fee. As AmEx puts it: $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply.

There’s no bonus on the Citi® Double Cash Card – 18 month BT offer — but, hey, a $0 annual fee doesn’t sting nearly as much.

With any rewards card, it’s best to pay your balance in full every month to avoid running up interest, which can quickly wipe out the value of your rewards. But if you need to carry a balance as a new cardholder, both cards give you a bit of a break. For the Blue Cash Preferred® Card from American Express, 0% on Purchases and Balance Transfers for 12 months, and then the ongoing APR of 13.99% - 24.99% Variable APR.

Citi’s card offers a long 0% period, but it’s only for balance transfers: 0% on Balance Transfers for 18 months, and then the ongoing APR of 14.49% - 24.49% Variable APR.

If you choose to transfer a balance onto the Citi card, you should be aware of what will happen. When you carry a balance on a credit card from month to month — even one transferred at 0% interest — you’ll get no grace period on purchases. You’ll pay interest on purchases from the day they hit your account.

Why not carry both?

If you’re dead-set against paying an annual fee on a credit card, then your choice is easy. The Blue Cash Preferred® Card from American Express has one of the steepest fees of any consumer cash-back card, while the Citi® Double Cash Card – 18 month BT offer charges you precisely zip.

On the other hand, if you’ve got a family and you’re spending, say, $700 a month at the supermarket, the Blue Cash Preferred® Card from American Express is offering you a lot of free money for a space in your wallet, even after the fee.

One other consideration: The Citi® Double Cash Card – 18 month BT offer is a MasterCard, which is more widely accepted than American Express. That shouldn’t be an issue at larger stores, but you never know about the little grocery on the corner.

At this point, you might be thinking: “If only I could get the high rewards rates on the AmEx card’s bonus categories and the Citi card’s 1% + 1% rate on everything else.” Well, uh, you can. A quick-and-dirty way to optimize your cash-back rewards is to simply carry both cards. Pull out the Blue Cash Preferred® Card from American Express at the supermarket, the gas station and the department store. For everything else, use the Citi® Double Cash Card – 18 month BT offer. Plenty of people do just that.

Others prize simplicity and would prefer to carry just one card for everyday use. If that’s you, start banging away at the calculator and make your pick accordingly.

Paul Soucy is an editor at NerdWallet, a personal finance website. Email: paul@nerdwallet.com. Twitter: @paulsoucy.