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.
- Annual fee
- Cashback Rate
- 6% at U.S. supermarkets on up to $6,000 per year in purchases (then 1%), 3% at U.S. gas stations and select U.S. department stores, 1% on other purchases
- Regular Purchase APR
1. Earn 6% cash back at U.S. supermarkets (up to $6,000 per year of purchases).
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 - after you earn 1%.
2. Earn 3% cash back at U.S. gas stations and select U.S. 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 a Welcome Offer.
You can earn a $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
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 at U.S. supermarkets up to $6,000 per year
Despite the annual fee and category restrictions, we’re still big fans of the Blue Cash Preferred® Card from American Express. You only need to spend $1,583 per year (or $132 per month) on groceries to earn enough cash back to cover the $95 annual 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 at U.S. supermarkets in a year, you’ll earn $360 in cash back before the annual fee is deducted.
3% cash back at U.S. gas stations.
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 U.S. supermarkets, U.S. gas stations, and select U.S. 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 U.S. gas station merchant code. Gas purchases at U.S. supermarkets or U.S. 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 from American Express is or isn’t for you will depend on how much you spend in the bonus categories.
The Blue Cash Preferred® Card from American Express has a sister card that comes with a $0 annual fee called the Blue Cash Everyday® Card from American Express.
The Blue Cash Everyday® Card from American Express gives 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
Pick the Blue Cash Everyday® Card from American Express ($0 annual fee) instead of the Blue Cash Preferred® Card from American Express ($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 from American Express with the $95 annual fee outperforms the $0 annual fee Blue Cash Everyday® Card from American Express.
Another thing to consider is where you do your shopping.
If you live in a city where major supermarkets are few and far between, neither the Blue Cash Preferred® Card from American Express nor Blue Cash Everyday® Card from American Express 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 from American Express 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 from American Express with good to excellent credit (a score that’s 670 or above).
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 from American Express:
- Blue Cash Everyday® Card from American Express
- Chase Freedom®
- Citi® Double Cash
- Alliant Visa® Signature
3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
Regular Purchase APR
As mentioned, the Blue Cash Everyday® Card from American Express is the $0 annual fee version of the Blue Cash Preferred® Card from American Express. It offers 6% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 3% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.
Again, this is the card to go with instead of the Blue Cash Preferred® Card from American Express 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 from American Express 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. Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. The categories change quarterly on the Chase Freedom®.
There’s a $1,500 quarterly spending cap on the 5% category. The bonus category for January through March 2018 includes Gas Stations & Internet/Cable/Phone Services, 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.
The acceptance of American Express is worse than for Visa and MasterCard - especially outside of the United States. However, the network continues to expand every year, and it is much more difficult to find places in the US that don't accept Amex.
Anything you spend over the $6,000 cap at U.S. supermarkets will earn only 1% cash back. Fortunately, there is the 3% cash back at U.S gas stations and select U.S. department stores, 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 from American Express you receive Blue Cash Rewards Dollars. You would need a different American Express credit card, such as The The Amex EveryDay® Credit Card from American Express, to receive Membership Rewards® Points.
Barclays Online Savings Account
Synchrony Bank High Yield Savings
Synchrony Bank 12 Month CD
Goldman Sachs Bank USA High-yield 12 Month CD
* All banks listed are a Member FDIC.