American Express Blue Cash Preferred Review: Perhaps the Ultimate Family Card
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Families can rack up serious cash back. The annual fee is a whopper, but if you spend at least $31 a week at the supermarket, you'll cover it.
Pros & Cons
High rewards rate
Intro APR period
Has annual fee
Requires good/excellent credit
Spending caps on bonus rewards
Earn 3% cash back at U.S. supermarkets, at U.S. gas stations and on U.S. online retail purchases (on up to $6,000 per year in spending in each category). Other purchases earn 1% back. Terms apply. The annual fee is $0.
Compare to Other Cards
$0 intro annual fee for the first year, then $95.
18.74%-29.74% Variable APR
18.49%-28.49% Variable APR
16.49%-27.49% Variable APR
0% intro APR for 12 months on purchases and balance transfers
0% intro APR on Balance Transfers for 18 months
0% intro APR for 15 months on purchases and balance transfers
Recommended Credit Score
690850good - excellent
Recommended Credit Score
690850good - excellent
Recommended Credit Score
690850good - excellent
The Blue Cash Preferred® Card from American Express sits among the elite in cash-back credit cards and is perhaps the ideal card for families.
It offers an eye-popping 6% cash back at U.S. supermarkets on up to $6,000 in spending per year, 6% back on select U.S. streaming subscriptions, and a generous 3% back on transit including U.S. gas stations, plus 1% cash back on everything else. Terms apply. Cash back is received in the form of reward dollars that can be redeemed as a statement credit when your rewards total at least $25. Gift cards and merchandise are also available.
Those premier rewards come at an annual cost. There's a $0 intro annual fee for the first year, then $95. That's pricey for a cash-back credit card, especially since most of its competitors charge no annual fee.
Still, 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 transit and supermarkets, to quickly cover its cost and start earning a profit?
Blue Cash Preferred® Card from American Express: Basics
Type: Cash back.
Annual fee: $0 intro annual fee for the first year, then $95.
Bonus offer: Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Terms Apply.
6% cash back at U.S. supermarkets, on up to $6,000 in spending per year.
6% cash back on select U.S. streaming subscriptions.
3% cash back at U.S. gas stations.
3% cash back on transit.
1% cash back on other purchases.
Interest rate: 0% intro APR for 12 months on purchases and balance transfers, and then the ongoing APR of 18.74%-29.74% Variable APR.
Up to $84 a year in credit for a subscription to the Disney Bundle, in the form of $7 monthly statement credits. The Disney Bundle includes Hulu, Disney+, and ESPN+. Enrollment required; terms apply.
Up to $120 a year in credit for on-demand fitness provider Equinox Plus, in the form of $10 monthly statement credits. Enrollment required; terms apply.
Why you might want the Blue Cash Preferred® Card from American Express
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 supermarket, the gas pump, or on commuting. And if you earn the card's welcome offer for new cardholders, your first year-plus with the card will cost you nothing. Here are the card's top features:
Big supermarket rewards
The industry-leading cash-back rate at supermarkets is this card's primary allure. You get 6% cash back at U.S. supermarkets, on up to $6,000 a year in spending. After you hit the cap, supermarket spending earns 1%. Terms apply.
The average U.S. household of four spends about $6,200 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, which alone is worth $360 in cash back.
This card's headline feature comes with a big caveat: The 6% rewards are available only at U.S. supermarkets. American Express' definition of supermarkets excludes wholesale clubs such as Sam's Club, superstores like Target and Walmart, specialty food stores and others. So consider not only how much you spend on groceries, but also where you buy them.
Supermarkets often sell gift cards for a variety of stores, restaurants and online retailers. Depending on how your supermarket handles gift card sales, you may be able to use your 6% rewards by buying gift cards for other merchants with your Blue Cash Preferred® Card from American Express and then using them yourself.
Big rewards on eligible streaming services
Although that 6% on U.S. supermarket spending is capped at $6,000 annually, eligible U.S. streaming services have no cap on the 6% cash back. If you're all about cord-cutting and have one or more subscriptions to such services as Hulu, Netflix, Pandora or Spotify, you'll save money if you pay with the Blue Cash Preferred® Card from American Express. Granted, you’re unlikely to spend near as much on streaming as you do at supermarkets, but 6% is a huge percentage in cash back. American Express notes that if your streaming subscription is bundled with another product or service or billed by a third party, such as a cable or phone company, your purchase may not be eligible for the 6% back. Terms apply.
The 3% cash back at U.S. gas stations is also among the highest you can get anywhere — and those rewards aren't capped. That's a boon for 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. Terms apply.
American Express further sweetens the card's earning power for commuters by adding transit as a 3% bonus category. This includes spending on rideshares, tolls, taxis, buses, trains and parking. It's a potentially huge boon for those who rely daily on public transportation and other ways of getting around that don't require filling up at the pump. Terms apply.
Bonus offer for new cardholders
The Blue Cash Preferred® Card from American Express offers a welcome bonus, something that not all of its cash-back competitors do: Earn a $250 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months. Terms Apply. That more than covers the annual fee for a while.
There's another version of the card, called the Morgan Stanley Blue Cash Preferred® American Express Card, that is nearly identical. It offers the same rewards, but for those with eligible Morgan Stanley brokerage accounts it also offers a $100 statement credit every year after spending $15,000 on eligible purchases.
Blue Cash Preferred® Card from American Express: Pitfalls and other possibilities
Even with its high rewards rates and welcome offer for new cardholders, the Blue Cash Preferred® Card from American Express isn't for everybody. Here are some 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 rewards at U.S. supermarkets alone, you would need to spend about $31 per week in that category to break even on the annual fee. That's an accessible amount for most people, and it doesn't even consider elevated rewards on select U.S. streaming services, or purchases at U.S. gas stations and other forms of transit, which only hasten the break-even point. Expressed a different way, if you spent $61 per week to get around, 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 welcome offer, your first-year annual fee is more than paid for. You can use our calculator below to determine whether this card is a good fit.
Still, some people don't like the idea of an annual fee under any circumstances. For them, there's a little-brother card, the Blue Cash Everyday® Card from American Express, which offers similar bonus categories without an annual fee. This card earns 3% cash back at U.S. supermarkets, at U.S. gas stations and on U.S. online retail purchases (on up to $6,000 per year in spending in each category). Other purchases earn 1% back. Terms apply. (see rates and fees).
The natural question is: At what spending level is the Blue Cash Preferred® Card from American Express a better deal? Using the same supermarket-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.
Other no-fee alternatives include the low-hassle Citi® Double Cash Card, which pays 2% cash back on all purchases — 1% when you make them and another 1% when you pay them off. Or consider the generous 5% rotating bonus rewards categories of the Chase Freedom Flex℠.
Or if the bulk of your budget goes toward dining out instead of cooking at home, the Capital One SavorOne Cash Rewards Credit Card is a top choice. You'll earn 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart and Target); 8% cash back on Capital One Entertainment purchases; 5% back on hotels and rental cards booked through Capital One Travel (terms apply); and 1% on all other purchases.
Bonus rewards cap
For big households, a major drawback is the $6,000 cap each calendar year on U.S. supermarket spending eligible for the 6% reward. That means the most you could earn back at that level is $360 before additional supermarket purchases net you a mundane 1% back. Again, eligible U.S. streaming services earn 6% back, uncapped. Of course, you could monitor your rewards and switch to a different card at the supermarket 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.
Interested in further exploring your cash-back credit card options? Visit NerdWallet's list of the best credit cards and find out how this card compares.
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 or gas.