If you’re looking for a cash back program that will reward you handsomely for grocery shopping, the Blue Cash Preferred® Card from American Express is one to check out. Although this card has an annual fee, the amount of cash back you have the potential to earn can easily cover the fee.
1. Earn 6% cash back at U.S. supermarkets with a cap.
The supermarket category excludes superstores and warehouses. Specialty retailers like wine stores and convenience stores likely won’t earn 6% cash back either. The annual cap for the supermarket category is $6,000.
2. Earn 3% cash back at gas stations and select department stores, 1% cash back on everything else.
There’s no annual spending cap for the 3% and 1% cash back categories. The following department stores are examples of those that qualify for 3%:
- Bon-Ton Stores
- Century 21 Department Store
- JCPenney (JCP)
- Lord & Taylor
- Neiman Marcus
- Saks Fifth Avenue
- Stein Mart
3. Earn an extra introductory bonus.
You get a bonus of $150 in cash back if you spend $1,000 within the first three months of card signing.
Cash back earned converts into Blue Cash Rewards Dollars. You can redeem Blue Cash Rewards Dollars for a statement credit in increments of $25.
Word of warning: A cash back statement credit does not get applied to your minimum payment. To keep your card in good standing, you need to make at least the minimum payment each month even if you redeem cash back.
These are the American Express perks:
- Car rental loss and damage insurance. You can decline the rental agency’s collision damage waiver because you’re covered if your rental car is damaged or stolen when you pay with this card, though some countries like Australia and Italy aren’t covered.
- Global assist hotline. When traveling you get 24/7 access to legal, emergency, and financial assistance.
- Travel accident insurance. You get coverage for accidental death or dismemberment during travel.
- Extended warranty of up to an additional year after your manufacturer’s warranty expires.
- Roadside assistance for emergencies if your car needs to be towed, you need to fix a flat, or you need a battery jump. Third-party service costs may apply.
6% cash back on groceries up to $6,000.
Despite the annual fee and category restrictions, we’re still big fans of the Blue Cash Preferred® Card. You only need to spend $1,583 per year (or $132 per month) on groceries to earn enough cash back to cover the $95 fee.
Since the supermarket spending cap is a generous $6,000 per year, you still have plenty of room to earn cash back beyond this break-even point, and if you spend a full $6,000 on groceries in a year, you’ll earn $360 in cash back before the annual fee is deducted.
Unlimited 3% cash back for gas.
You’ll be able to earn 3% cash back in the gas category without any cap, which can serve you well on your commute.
No revolving categories.
This card is simple to use. You don’t need to enroll in the bonus categories quarterly or annually. You just need to remember to pull out this card when you shop at major grocery stores, gas stations, and department stores.
Store restrictions in 3% and 6% categories.
Category restrictions are common for most cash back cards, but still a piece of fine print you should be aware of. American Express uses merchant codes to determine how much cash back you get on each purchase.
Stores like Amazon, BJ’s Wholesale Club, Target, and Walmart won’t qualify as supermarket spending.
Furthermore, you can’t earn 3% cash back by pumping gas just anywhere. You have to buy gas at places with a gas station merchant code. Gas purchases at supermarkets or warehouse clubs will not qualify unless otherwise noted.
This restriction on gas spending may be the biggest deal-breaker for savvy gas shoppers since supermarkets and warehouses often have competitive gas prices with minimal markup.
Before you apply for the card, contact American Express if you pump at discount locations to see if the spending qualifies. American Express has a short list of example stores that fall into each cash back category here.
Whether the Blue Cash Preferred® Card is or isn’t for you will depend on how much you spend in the bonus categories.
The Blue Cash Preferred® Card has a sister card that comes with no annual fee called the Blue Cash Everyday® Card.
The Blue Cash Everyday® Card gives:
- 3% cash back on groceries
- 2% cash back at department stores and gas stations
- 1% cash back on everything else
Pick the Blue Cash Everyday® Card (no fee) instead of the Blue Cash Preferred® Card ($95 annual fee) if you spend less than $3,200 per year on qualifying groceries (about $300 a month).
If you spend more than $3,200 on groceries per year (about $300 a month), the Blue Cash Preferred® Card with the $95 annual fee outperforms the free Blue Cash Everyday® Card.
Another thing to consider is where you do your shopping.
If you live in a city where major groceries stores are few and far between, neither the Blue Cash Preferred® Card nor Blue Cash Everyday® Card will serve you well. You won’t get 6% for food purchases at corner markets and specialty stores.
Shoppers who stock up for groceries at warehouse or superstores like Walmart will also get less use from these American Express cash back cards since that spending doesn’t qualify.
Consumers who’ll get the most out of the Blue Cash Preferred® Card are those who spend at places that are eligible for bonus cash back like Whole Foods, Safeway, and Kroger.
You have the best chance of getting approved for the Blue Cash Preferred® Card with good to excellent credit (a score that’s 670 or above).
American Express lets you prequalify for offers without a hard pull to your credit history here.
You can find our ultimate roundup of cash back cards for every category in this post.
Here we’ll cover four alternatives to compare against the Blue Cash Preferred® Card:
- Blue Cash Everyday® Card from American Express
- Chase Freedom®
- Citi® Double Cash
- Alliant Visa® Signature
As mentioned, the Blue Cash Everyday® Card is the free version of the Blue Cash Preferred® Card. It offers:
- 3% cash back at grocery stores
- 2% cash back on gas and department store spending
- 1% cash back on all other purchases
Again, this is the card to go with instead of the Blue Cash Preferred® Card if you spend less than $3,200 per year on qualifying groceries.
But, let’s be honest: $3,200 or $267 per month spent on groceries is a pretty small sum even for a one- or two-person household. For this reason, the Blue Cash Preferred® Card is what we prefer of the two supermarket cards.
A revolving category cash back card is an alternative if you spend pretty evenly across multiple areas. The Chase Freedom® card gives you 5% cash back in bonus categories that change quarterly.
There’s a $1,500 quarterly spending cap on the 5% category. You earn 1% cash back on all other spending. The bonus category for July through September this year includes restaurants and movie theaters, but categories change every quarter, and there’s no guarantee these will be a bonus category in the future.
An unlimited flat-rate cash back card such as the Citi® Double Cash is good to pair with any of the category cards we discuss above. The Citi® Double Cash offers unlimited 2% cash back on all purchases with no fee, making this a great card to earn a consistent cash back rate. Citi® also does not charge an annual fee for this card.
The Alliant Visa® Signature offers 3% cash back on all purchases during your first year as a cardholder. After the first year, you will earn 2.5% cash back. There is an annual fee for this card, however it is waived the first year. A good rewards strategy is partnering a high cash-back rate category card with one of these unlimited cards for non-category spending.
One disadvantage of American Express is it’s a card that some stores don’t accept. Why? American Express charges a higher merchant processing fee, which causes some smaller shops to avoid it. Most of the places eligible to earn 6% and 3% cash back from the Blue Cash Preferred® Card are big stores that will most likely take American Express anyway. Stick to these stores and your cash back potential won’t be impacted by limited acceptance.
Anything you spend over the $6,000 cap on groceries will earn only 1% cash back. Fortunately, the 3% cash back at gas stations and department stores is unlimited, so you’ll always get bonus cash back for that spending.
No, Blue Cash Rewards Dollars do not expire as long as your account remains open.
Yes, the minimum amount to redeem Blue Cash Rewards Dollars is $25.
Blue Cash Rewards Dollars can only be redeemed for statement credit. They can’t be redeemed for merchandise or gift cards.
Blue Cash Rewards Dollars are redeemable for statement credit, while Membership Rewards® Points are redeemable for statement credit, travel, gift cards, merchandise, or entertainment. With the Blue Cash Preferred® Card you receive Blue Cash Rewards Dollars. You would need a different American Express credit card, such as the Amex EveryDay® Preferred Credit Card, to receive Membership Rewards® Points.