Is the AMEX Blue Cash Preferred Card Worth It?
For consumers who frequently shop at grocery stories, the American Express Blue Cash Preferred Card offers one of the very best cash back rewards programs. The card also offers respectable cash back rewards for gasoline and department store purchases.
On the other hand, unlike Visa’s previous slogan, it’s not “everywhere you want to be,” and unlike MasterCard, there may not be as many “priceless” moments, since American Express is not as widely accepted as these credit cards.
Learn the other advantages and disadvantages of obtaining an AMEX Blue Cash Preferred Card.
PROS
- Welcome Bonus
- At the time of publication, the AMEX Blue Cash Preferred Card offers a welcome bonus of up to $150 back for spending $1,000 in purchases within the first 3 months. All cash back is issued in the form of statement credits.
- At the time of publication, cardholders can also receive 10% back – up to $200 – for using the card at US Wireless Telephone Service Providers, but only in 2016
- For the term of one year after opening the account, the APR is 0% for purchases and balance transfers
Balance Option
There is an option to pay off the entire balance each month, or choose to carry a balance from one month to the next.
Cardholders have at least 25 days after the close of each monthly billing cycle to pay off the entire balance and avoid interest charges.
Cash Back Rewards
It’s relatively easy to start earning cash rewards with the AMEX Blue Cash Preferred Card. There is no enrollment process, and no rotating reward categories. Cardholders can also track their Reward Dollar balance online in real-time.
Cardholders earn 6% at supermarkets in the U.S., with a $6,000 yearly limit. Once the cardholder exceeds the $6,000 limit, cash back is earned at 1%. For gasoline purchase at gas stations in the U.S., cardholders earn 3% cash back. Other types of purchases earn 1% cash back.
There are two ways for cardholders to earn cash back at a faster rate. They can request additional cards for their family members to use, or they can use their AMEX Blue Cash Preferred Card for other monthly expenses, with qualified merchants:
To earn additional rewards, eligible department stores include J.C. Penney, Macy’s Sears, Saks Fifth Avenue, Belk, Bloomingdale, Dillards, and several other popular chains. Eligible drug stores include Walgreens, CVS Pharmacy, Rite Aid, and DUANE Reade. Eligible gas stations include Exxon, Shell, Mobile, Gulf, Murphy, and Hess.
In addition, cardholders can receive additional business rewards for using their card at merchants like Office Depot, Staples, and other office supply stores. And when they purchase computer hardware, software, and cloud computing, they can earn additional rewards when they use such providers as Apple, Dell, HP, Intuit, Microsoft, and Tiger Direct.
CONS
- Credit Requirements
- There’s a reason it’s called the “preferred card” Applicants who don’t have good credit – a minimum score of 690 – are not eligible for the AMEX Blue Cash Preferred Card
- High APR
- After one year, the card has a variable rate between 13.24% and 23.24%, depending on the cardholder’s credit score and other personal factors, and also dependent on the Prime Rate
- The APR for cash advances is 25.49%, subject to change based on the Prime Rate
Fees and Penalties
- Annual fee: $75 – and it cannot be waived. However, depending on how much the card holder spends, they may earn enough in rewards to justify this yearly charge.
- Late Fee: Up to $37
- Returned Payment Fee: Up to $37
- Balance Transfer Fee: At least $5 or 3% of the transfer amount – whichever is the larger amount
- Cash Advance Fee: At least $5 or 3% of the cash advance amount – whichever is the larger amount
- Foreign Transactions: 2.7% of the transaction amount
Penalty: After at least one late payment, or if a payment is returned for insufficient funds, etc., the APR will increase to 29.49%. This rate will be in effect for at least six months. The APR will vary based on the Prime Rate, so it could go even higher.
Purchase Limitations
The terms of eligible rewards are very specific. “Supermarket” purchases do not include purchases from super stores, convenience stores or warehouse clubs. Also, gasoline purchased at supermarkets, super stores, or warehouse clubs is not eligible for cash back rewards.
Positive and Negative Company Information
Regarding customer service, American Express was in first place in the J.D. Power U.S. Credit Card Satisfaction Study for eight consecutive years, and came in second place in 2015. The survey measures several categories, including problem resolution, and credit card terms.
Near the end of 2013, the Consumer Finance Protection Bureau ordered American Express to pay $59.5 million for illegal credit card practices, such as claiming to suspend minimum monthly payments for 24 months for cardholders who purchased an Account Protection Plan and subsequently lost their job. However, the company only limited the payment amount to 2.5% of the total balance – and often the minimum payment amount was actually smaller than this amount. Also, the advertised 24-month period was only one to three months in most cases.
Upgrading from AMEX Blue or Optima
Since the reward system is different, cardholders who upgrade to Blue Cash Preferred from Blue or Optima will not be able to merge the programs. The previous rewards program will be discontinued, and the cardholder will have 30 days to redeem existing points. However, if the cardholder has another Membership Rewards-eligible card that is linked to the rewards program account, those points can be transferred to that card.
Is the AMEX Blue Cash Preferred Card Worth It?
For consumers with good credit who buy a lot of groceries – and purchase them from grocery stores instead of superstores like Wal-Mart and Target, this card provides excellent cash back rewards. And for consumers who would prefer to put most of their other purchases on a credit card than use a debit card, it is also a good choice.
However, if cardholders are on the lower end of the “good” credit spectrum, at the end of 12 months they may be faced with a high interest rate if they choose to carry a balance. And if these cardholders are not disciplined enough to avoid late and returned payment fees, their interest rates may go even higher, nullifying some of the savings from their cash back rewards.
Consumers considering the AMEX Blue Cash Preferred card will want to check out the Chase Freedom Unlimited credit card as well.
