Blue Cash Preferred with 6% Cash Back at Grocery Stores Full Analysis

32
7189

Reader Michael recently emailed me the following question:

“Which [card] would you recommend my wife use for Groceries?”

This is a surprisingly tough question. On the one hand, the best card for groceries is obvious:

The Blue Cash Preferred® Card from American Express earns an unparalleled 6% cash back at grocery stores up to $6,000 in spending per year then 1% after. Plus the card comes with:

  • a $100 statement credit in the form of Rewards Dollars after you make $1,000 in purchases with your new Card in the first three months
  • and a statement credit of $99 plus applicable taxes for the initial annual membership fee of a new Amazon Prime membership after spending $1,000 on the first three months
  • term and restrictions apply

Normally I prefer to earn points and miles on purchases because I can use them masterfully to get outsized value. But don’t forget that cash can buy plane tickets too. 😉

The 6% cash back at grocery stores offered by the Blue Cash Preferred® Card from American Express is unmatched by miles- or points-earning cards.

But, on the other hand, just because the Blue Cash Preferred® Card from American Express offers the best returns at grocery stores doesn’t mean that everyone should get the card. The decision is a little more complicated.

Why should you not necessarily get the best card for groceries?

The crux of the issue of what card to use for groceries is that there are a lot of great rewards cards, but one can only get a finite number of them. That means we have to pick and choose our spots to get the best rewards cards for our spending and travel goals.

The benefits of the Blue Cash Preferred® Card from American Express are clear:

  • You get 6% of your first $6k each annual reward year spent on groceries. That’s $360 Rewards Dollars back if you max out the benefit. “An annual reward year is 12 billing periods in a row starting with the one that begins in January.”
  • You get $100 Rewards Dollars (redeemable for statement credits) back after spending $1k in the first three months of cardmembership.
  • You get 3% cash back at US gas stations and select department stores
  • You get 1% cash back on all other purchases

Who the Blue Cash Preferred is Better For

The Blue Cash Preferred® Card from American Express is better for people who want to earn travel rewards that are ideal for economy travel and who have large grocery bills in relation to their total spending. To me this describes families.

The reason that the Blue Cash Preferred is ideal for economy travelers is that economy awards are often a poor value with traditional airline miles, which often count business and first class awards among their best uses. (This is why I often recommend the Barclaycard Arrival Plus™ World Elite MasterCard® for economy travelers because its miles are ideal for economy award travel.)

Just because you should save your miles when looking to book an economy ticket doesn’t make shelling out cash any less painful. That’s where this card comes in, letting you use the cash back you earn in lieu of miles for airline tickets–or for anything else, which is the real beauty of cash back.

And obviously if groceries make up a big part of your budget, that’s the category where you want a massive 6% back.

Who the Blue Cash Preferred is Worse For

Folks who want to fly first class, don’t spend much at grocery stores, and big spenders can skip the Blue Cash Preferred.

If you want to fly International First Class, you might need $10k cash back to get the same seat you can get for 135k traditional airline miles. Skip the cash back cards.

If you eat out all the time, obviously you don’t need a card with big cash back at grocery stores.

And, counter-intuitively, if you’re such a big spender at grocery stores that you would easily max out the grocery store 6% cash back, you should probably skip the Blue Cash Preferred. The reason is that the 1% back after $6k spent is not very appealing, especially when the American Express® Premier Rewards Gold Card card earns 2x Membership Rewards on all supermarket purchases. If I spent $1k a month on groceries, I’d rather do it on the Premier Rewards Gold than the Blue Cash Preferred.

Recap

Michael asked a one sentence question about which card his wife should use for groceries, probably expecting a one sentence answer. He got this post.

The clear best card is the Blue Cash Preferred® Card from American Express, which offer 6% back on grocery purchases up to $6k per year.

But there are so many great personal cards from American Express that you have to dig deeper and compare the sign up bonus, how much you can expect to get back from your grocery purchases, and whether you want to fly economy or business class to determine if the Blue Cash Preferred is right for you.

Full offer details:

 

  • Get 100 Reward Dollars, redeemable for a $100 statement credit, after you make $1,000 in purchases with your new Card in the first three months.
  • Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period.
  • As an Amazon Prime member, you get unlimited FREE Two-Day Shipping on millions of items.
  • Earn Cash Back: 6% US supermarkets up to $6,000 per year in purchases, 3% US gas stations & select US dept stores, 1% other purchases. Terms and limitations apply.
  • Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • 0% intro APR on purchases and balance transfers for 15 months, then a variable rate, currently 12.99% to 21.99%, based on your creditworthiness and other factors.
  • Terms and Restrictions Apply.

Application Link: Blue Cash Preferred® Card from American Express


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.

If you liked this post, sign up to receive one free daily email every morning with all of the day’s posts! You can also follow MileValue on Twitter and Facebook.

32 COMMENTS

    • The Blue Cash Preferred is the best card for groceries. The question is whether it’s worth giving up the chance to get better overall cards just to hold the best card for groceries.

  1. My strategy with the Amex Blue Cash Preferred card is to only spend on gift card purchases at my local grocery store with attached gas station during “4x fuel points” promotional periods, which happened 2-3 times per year for 1 month periods. Normally, you are awarded 2x fuel points, but I find that waiting for the 4x periods is best. For instance, for a $250 gift purchase during 4x periods at my local Kroger, I am awarded $1 off/gallon for up to 35 gallons (which I max out on a simultaneous fill-up of both my wife and I’s vehicles). So right off the bat without considering Amex Blue Cash, there is a 14% savings ($35/$250=14%). Add in the 6% cash back from the Amex Blue Cash card and I’m at 20%. To maximize opportunity costs, I try to purchase gift cards to merchants that would otherwise only grant me 1x spend. (for instance, since I have the Chase Sapphire Preferred card, I try not to buy restaurant gift cards). Granted, a huge down side is that the strategy accomplishes pretty much nothing towards my wife and I’s travel aspirations for a family of 3. I appreciate your post, and will have to run the math of using my Amex Starwood Preferred Guest card, my Chase Sapphire Preferred, or my US Bank FlexPerks card in the future, all of which I have already attained their sign-on bonuses.

    • Great work getting 20% back! If you already have the Blue Cash Preferred, keep using it at grocery stores during 6% and look at Premier Rewards Gold or your favorite 1x card (SPG) when you exceed $6k in spending.

  2. Can the points from the Blue Cash Preferred account be transferred to a Membership Rewards account? If so, could you share how that would change the outcome from your comparison? Your rational approach to this hobby is helpful to all of us pocket protector Excel spreadsheet people. Who wants to spin their wheels? Thanks for all your value adds.

    • No, you can only use your rewards from the Blue Cash Preferred as statement credits on your BCP account.

  3. One thing to consider, esp. for couples where only one half is into this game, is the simplicity of just telling a spouse/GF/SO to use the Blue Cash Preferred card at the grocery store.

    My husband, despite the stickers on the cards that revolve in and out of his wallet, is always a bit bemused and confused when he goes to put a purchase on a card. If I need his help with a minimum spend, I remove the other cards from his wallet, but that always is a bit disorienting for him at first 😉 !!

    It is easiest when I can, for the most part, make sure I meet the minimum spends on new cards, while he knows to use Ink Bold for office supplies, BCP for groceries, and CSP for all else.

    • Unfortunately not. “Warehouse club” stores are excluded if you click through the terms and conditions to find the rewards categories.

  4. I did not understand getting 6% upto 6000$ spend twice in 12 billing periods. Do you mean if one gets the card in Nov’13, then he has time till year end to spend as much as 6000$ and get 6%. And again do the same starting Jan’14 till 12 biiling periods get over? so effectively its 6% on 12000$?

    • If you got the card now, you’d have 2-3 billing periods on which you’d get 6% of grocery spend up to $6k before the $6k counter resets with the January statement. So yes, in the first 12 months you have the card, you can get 6% of $12k in grocery spending ($720) back.

  5. Thanks for this post! I have been doing this whole miles and points thing for more than two years. I just asked this exact question in another blogger’s site and one person recommended I get the amex blue cash preferred but I can’t bring myself to commit to one card, especially one with an annual fee.
    We sign up for new credit cards every 4 to 6 months and I always use my grocery spending of close to $800 a month to help me meet my minimum required spending so for me it’s hard to sign up for one credit card to get 6% money back in one category. But now that you included the SPG I think I might lean towards putting all my grocery spending (when not trying to meet minimum spend) on that card.
    Also, it is important to realize that if you get a card with a bank (such as Amex) then it takes away from your ability to have the ‘maximum’ number of allowed cards with one bank, which for some people can mean only 4.

  6. When using these credit cards with grocery store bonuses to buy groceries at Target or Walmart, do you earn the bonus points or bonus cash back? Also, when shopping at ethnic grocery stores such as Seafood City or Island Pacific, does it code correctly as a grocery store and earn the bonus points or cash back?

    • Target and Walmart will not code as grocery stores. The ethnic one very likely will, but I do not know. Make a test purchase.

  7. Of course, you need to be able to afford to patronize a grocery store that’ll accept that card as payment. Most people will shop for groceries where they save the most money and those stores tend to accept cash, checks or ATM cards only.

    • Really? I’ve never been to a grocery store that didn’t accept AMEX. But I guess I always shop at chains.

  8. Can you still get 6% from grocery store when you buy Amex, Visa, or MC gift cards ? I heard this won’t work anymore.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.