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

Chase Sapphire Preferred

Earn 80,000 Chase Ultimate Rewards Points after you spend $4,000 spend in 3 months

Just getting started in the world of points and miles? The Chase Sapphire Preferred is the best card for you to start with.

With a bonus of 80,000 points after $4,000 spend in the first 3 months and 2x points earned on dining and travel spend, this card truly cannot be beat for getting started!

Learn More

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