With travel at a lull right now, many people have shifted their credit card strategy from earning travel rewards to earning cash back. Even travel aficionados (such as myself) have pivoted, since having cash in your pocket right now might be a better option than earning travel rewards for an unknown time in the future.
Plus, with supermarket purchases being at an all-time high thanks to folks not eating out as much, picking a credit card to maximize your grocery purchases is quite important. This is where the American Express Blue Cash credit cards come into play… but with two different versions of the card, which one is right for you?
Since there isn’t a one-size-fits-all when it comes to credit cards, we’ve broken down the pros and cons of both cards, including the welcome bonuses, the cash back you’ll earn in bonus categories and other card member perks to help you determine which card best fits your spending habits.
First, let’s take a look at all the key details of these two cards side-by-side:
With the Blue Cash Everyday card, you’ll earn 3% cash back at US supermarkets (up to $6,000 per year in purchases, then 1%), 2% cash back at US gas stations and select department stores, and 1% cash back on everything else. For a no-annual-fee credit card, those are decent bonus categories.
On the other hand, the Blue Cash Preferred offers more cash back, but comes with a $95 annual fee. With this card, you’ll earn 6% cash back at US supermarkets (up to $6,000 per year in purchases, then 1%) and on select US streaming subscriptions, plus 3% cash back at US gas stations and on transit, and 1% cash back on all your other purchases.
Unlike some other popular credit cards, neither Blue Cash card allows you to convert your cash back into points for travel or to use at partner airlines or hotels. Instead, your only redemption option is cash back in the form of Reward Dollars, which can then be redeemed as a statement credit on your account.
If you don’t already have the Blue Cash Everyday, you can earn a $150 statement credit after you spend $1,000 in purchases on your new card within the first three months after opening the account.
For new Blue Cash Preferred card members, there’s a $250 statement credit after you spend $1,000 in purchases on your new card within the first three months after opening the account.
These aren’t spectacular welcome offers, but the minimum spending requirement of only $1,000 in three months should be relatively easy to hit, requiring only about $333 in purchases each month with your card. And if you subtract the Blue Cash Preferred’s first year $95 annual fee from its $250 welcome bonus, you’re essentially getting roughly the same welcome bonus with either card.
Although both Blue Cash cards offer some great cash back opportunities, the list of benefits on them is relatively short. However, one of the best benefits that comes with both cards is the introductory APR on purchases.
You’ll get 0% interest on your purchases for the first 15 months with the Blue Cash Everyday from the date you open the account, and for the first 12 months with the Blue Cash Preferred. When compared to many other cash back and travel reward credit cards on the market today, these are some of the better introductory offers on purchases available.
Both cards will also give you access to Amex Offers, where you can save money at many popular merchants simply by using your registered American Express card. Depending on your shopping habits, many times these offers alone can outweigh the annual fee on the Blue Cash Preferred. And since there’s no annual fee on the Blue Cash Everyday card, you’ll come out ahead if you can use even some of these offers.
Like many other American Express credit cards, you’ll also have access to return protection with either Blue Cash card, which can come in handy from time to time.
How does return protection work? Well, if you want to return an eligible item that you bought on either your Blue Cash Everyday or Blue Cash Preferred card within 90 days from the day of purchase and the merchant won’t take it back, American Express will refund the full purchase price (excluding shipping and handling). Claims are capped at $300 per item, up to a maximum of $1,000 per card account per calendar year.
Other benefits of both Blue Cash cards include secondary car rental insurance and up to two years of extended warranty on eligible purchases. These are benefits you probably won’t use often, but they’re very nice to have if you end up in a situation where you need them.
Truthfully, if you’re looking for a credit card that earns cash back, the earning rates on the Blue Cash cards are quite high for purchases that fall into the bonus categories.
However, when it comes to everyday purchases that don’t fall into a bonus category, you’ll be better off using CNN Underscored’s benchmark credit card, the Citi® Double Cash Card, which has no annual fee and earns 2% cash back on all purchases — 1% when you buy, plus 1% when you pay it off). Outside of the bonus categories, the Blue Cash Everyday and Blue Cash Preferred cards only earn 1% cash back.
And while the Blue Cash cards have great category bonuses, if you’re looking for a credit card that will maximize your rewards at restaurants, drugstores and travel, you’ll be better off with a different card with bonuses in those categories.
For example, starting on September 15, the no-annual-fee Chase Freedom Unlimited will earn 5% cash back when you book travel through Chase Ultimate Rewards, 3% cash back at restaurants (including takeout and delivery), 3% cash back at drugstores and 1.5% on everything else.
Finally, the two Blue Cash cards don’t shine in the benefits department. You’ll get the standard American Express benefits, but there are other extra perks you’ll be leaving behind, such as trip delay and cancellation protection or lounge access.
Travel benefits may not be important to you at the moment, but if they are, you might want to consider a card like the Chase Sapphire Reserve, although you’ll also be looking at a much higher $550 annual fee for that type of premium credit card.
This is the million dollar question — or really the $95 question — since the cards are similar in benefits and just vary slightly in welcome offers, category bonuses and annual fee. Since the difference in fees between the Blue Cash Everyday and Blue Cash Preferred card is $95 per year, you’ll need to make sure the cash back and benefits you’ll use outweigh this fee if you decide to get the higher-priced card.
In the first year you have the card, the Blue Cash Preferred’s $250 welcome bonus alone makes up for the $95 annual fee, so your analysis should focus on the second year and beyond. But one main reason to consider the Blue Cash Preferred over the Blue Cash Everyday is if you have high grocery expenses, as this is one of the highest and most common category bonuses between the two cards.
Since the Blue Cash Preferred earns 6% cash back at US supermarkets (up to the $6,000 mark each year) and the Blue Cash Everyday earns 3% cash back at US supermarkets (again, up to $6,000 each year), your break-even point is $3,166 in grocery purchases annually after you take the $95 annual fee into account. That means if you spend less than that on groceries each year, you’re better off with the Blue Cash Everyday. If you spend more, get the Blue Cash Preferred.
Although the two American Express Blue Cash credit cards are similar, the small nuances can make a big difference in deciding which card to get. So if you’re considering either the Blue Cash Preferred or Blue Cash Everyday, make sure to look at how much you spend each year in each card’s bonus categories, so you can make a smart decision as to which card is the best for you.
Find out which cards CNN Underscored chose as our best credit cards of 2020.