The Bottom Line: 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.
Quick FactsView rates and fees
- Earn a $250 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
- NEW 6% Cash Back on select U.S. streaming subscriptions.
- NEW 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more.
Pros & Cons
Leading cash-back rewards at U.S. supermarkets
Bonus offer for new cardholders
Intro APR period on Purchases and Balance Transfers
Has annual fee — but if you spend more than $31 per week at U.S. supermarkets, the rewards offset the fee
American Express isn’t accepted at as many merchants as Visa or Mastercard
$25 minimum redemption
Alternate Pick: No annual fee
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.
Those premier rewards eventually come at an annual cost. There's a $95 annual fee. 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? Let's take a closer look.
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 supermarket, the gas pump, or on commuting. And if you earn the card's bonus 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 $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. Depending on how your supermarket handles gift card sales, you may be able to extend your 6% rewards by buying gift cards for other merchants 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 Walmart, specialty food stores and others. So consider not only how much you spend on groceries, but also where you buy them.
Big rewards on eligible Streaming services
Although that 6% on supermarket spending is capped at $6,000 annually, there's no such restriction on eligible streaming services. If you're all about cord-cutting and have one or more subscriptions to services such as Hulu, Netflix, Pandora or Spotify, you'll save money if you pay for it with the Blue Cash Preferred® Card from American Express. 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.
In May 2019, American Express further sweetened the card's earning power for commuters, 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.
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: $250 statement credit 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.
Blue Cash Preferred® Card from American Express: Pitfalls and other possibilities
Even with its high rewards rates and bonus 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 $31 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 bonus, 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 cousin card, the Blue Cash Everyday® Card from American Express, which offers similar bonus categories but at reduced rewards rates, for an annual fee of $0. This card gives 3% rewards at U.S. supermarkets, also up to $6,000 annually (then 1%), plus 2% at U.S. gas stations and select U.S. department stores, and 1% elsewhere. Terms apply.
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 – 18 month BT offer, 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®, which have in the past included grocery stores and gas stations.
Or if the bulk of your budget goes toward dining out instead of cooking at home, the Wells Fargo Propel American Express® Card is a top choice. You'll earn triple points on dining out or ordering in, but also on some of the same bonus categories offered by the Blue Cash Preferred® Card from American Express, including gas, transit and eligible streaming services. Grocery stores aren't a bonus category, however. The card's annual fee is $0. Terms apply.
BONUS REWARDS CAP
For big households, a major drawback 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 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.
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.
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.
To view rates and fees of the Blue Cash Preferred® Card from American Express, please visit this page.
To view rates and fees of the Blue Cash Everyday® Card from American Express, please visit this page.
on American Express's website
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