Amex Blue Cash Grocery Rewards Capped in 2013

by Michael on Jan 4, 2013

American Express (Amex) Logo

Years ago, I got an Amex Blue Cash reward credit card. At the time, this card offered great rewards and had no annual fee.

You got 5% cash back on “everyday” purchases (gas, grocery, and pharmacy) and 1.5% on everything else once you hit $6,500 in spending for the year (the rewards were lower up to that point).

Over the years, however, American Express gutted the rewards on this card to the point that I no longer use it. That being said, they have rolled out a couple of solid offerings in the same niche since that time.

One of these is the Amex Blue Cash Everyday card (link), which offers 3% cash back at grocery stores, 2% cash back at gas stations and select “major” department stores, and 1% on everything else — with no annual fee.

The other is known as the Amex Blue Cash Preferred card (link). This card offers a whopping 6% on grocery purchases, 3% at gas stations and select “major” department stores, and 1% on everything else. The catch is that there’s a $75 annual.

Even with the annual fee, many people come out ahead with the Preferred version of this card. Consider that, with $300/month in grocery spending, the Preferred card earns $108 more in rewards vs. the Everyday version. The difference is, of course, even greater at higher spending levels.

And since most grocery stores now sell all kinds of gift cards, you could extend the 6% cash back to all sorts of other purchases. Doing a home improvement project? Load up on Home Depot gift cards and earn 6% cash back. And so on. Nice, huh?

Unfortunately, Amex has wised up and will be capping the highest level of rewards at $6,000 in annual grocery purchases starting on January 1st. This card is still a good deal, but not nearly as juicy as it used to be.

Even with the cap, I should probably consider converting my old Blue Cash rewards card to a Blue Cash Preferred card and putting it back into rotation.

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