A cash-back king: Review of the Amex Blue Cash Preferred

Editor’s note: This post has been updated with the latest card information. 

Blue Cash Preferred® Card from American Express overview

The Blue Cash Preferred is a lucrative cash-back card for several spending categories. If cash back is more up your alley — and select U.S. streaming, U.S. supermarkets, transit and U.S. gas station categories align with your pandemic spending — then you can’t go wrong with the Blue Cash Preferred. Card Rating*: ⭐⭐⭐⭐

*Card Rating is based on the opinion of TPG’s editors and is not influenced by the card issuer.

If you prefer to be paid back in cents instead of points, a cash-back card may be a better choice in the midst of the ongoing COVID-19 pandemic.

In recent years, American Express has updated its most popular rewards cards to keep them relevant for modern consumers. The issuer also turned its attention to its cash-back card portfolio, with a makeover of the Blue Cash Preferred® Card from American Express.

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Currently, you’d earn a limited time offer of $300 statement credit after you spend $3,000 in purchases within the first six months. You also can take advantage of a $0 intro annual fee (see rates and fees) for the first year. Offer ends 12/10/2020.

While the card carries a $95 annual fee after that first year (see rates and fees), this can be more than offset by its generous — and timely — category bonuses, including an industry-leading 6% cash back on select U.S. streaming services and 6% back at U.S. supermarkets (on the first $6,000 in purchases each calendar year; then 1%). Let’s take a look at the ins and outs of this card to help you decide if it’s right for you.

Who is this card for?

There are pros and cons to picking a cash-back card over a travel rewards card, but if you don’t travel frequently and want the flexibility to spend your rewards in other ways, the Blue Cash Preferred might be right for you.

The unique and high-value bonus categories set this card apart from a simpler option, such as the Citi® Double Cash Card. The Blue Cash Preferred is for discerning customers looking for a rewards credit card to maximize their returns in specific bonus categories.   

Related: 3 reasons why the Amex Blue Cash Preferred comes out on top during the pandemic

Current welcome offer and fees

Cash-back credit cards rarely offer sky-high bonuses like travel rewards cards do, and the Blue Cash Preferred is no exception. New applicants can receive a solid $300 statement credit after spending $3,000 in purchases within the first six months of account opening. The first year’s annual fee (see rates and fees) is also waived.

After the first year, the Blue Cash Preferred comes with an annual fee of $95 a year (see rates and fees), although the card also charges a 2.7% foreign transaction fee (see rates and fees). Most of the bonus categories are limited to U.S. purchases anyway, so this clearly isn’t the best card to bring on vacation with you.

Related: Best cards with no foreign transaction fee

Earning

The standout features of the Blue Cash Preferred is its various cash-back bonus categories, which seek to reward you day in and day out. This is especially the case during the pandemic when you may be staying closer to home. The categories are as follows:

• 6% back on select U.S. streaming subscriptions
• 6% back at U.S. supermarkets (up to $6,000 per calendar year, then 1% thereafter)
• 3% back on transit (parking, tolls, ride-sharing, subway, etc.)
• 3% back at U.S. gas stations
• 1% everywhere else

The refresh in 2019 saw the removal of a 2% bonus category at select U.S. department stores, but the replacement categories of streaming services and transit will likely be much more appealing to the average customer.

While the Blue Cash Preferred is not the first card to offer a bonus multiplier on the growing industry of streaming subscriptions, its rate of 6% cash back is almost any card is offering (with the exception of temporary pandemic-related benefits).

In addition to this change, the Amex Blue Cash Preferred is a rewarding card at both the supermarket check out and gas pump, earning 6% cash back and 3% cash back, respectively.

And with the exception of the 6% U.S. supermarkets bonus, none of the other categories have an annual cap on how much you can earn. Still, you’ll have to analyze your spending patterns to make sure you’ll earn enough cash back to offset the card’s $95 annual fee.

You can get even higher rewards on the Blue Cash Preferred through American Express’s Refer-A-Friend program, which runs through Oct. 28, 2020. When you refer a friend through this link, you will have access to a special referral bonus specific to each card you have. Once approved, your friend will get their own increased welcome bonus through the referral. Plus, you’ll get a 3x multiplier for three months on whichever Amex card you referred from.

So for Blue Cash Preferred cardholders, that becomes a generous 9% on  U.S. supermarkets (up to $6,000 annually; then 1%) and U.S. streaming services, 6% on transit and U.S. gas stations, 3% on everything else for three months once your friend is approved for an Amex card.

Related: Check to see how many Amex points you can earn for referring a friend

Redeeming

While cash-back credit cards aren’t going to unlock the doors to $10,000 first-class airplane suites, there’s also no pressure to save up for a specific reward. With the Blue Cash Preferred, you can cash out your rewards any time your available balance is more than $25.

You have three redemption options:

1. Receive a statement credit
2. Redeem for gift cards
3. Shop with your rewards

No matter what you plan to use this extra money for, I suggest always redeeming for a statement credit. If you plan to purchase gift cards or go shopping you can simply put that purchase on your credit card, earn even more cash-back rewards, and then erase the purchase from your statement with your existing cash-back balance. Keep in mind that it can not be used to pay your minimum payment.

Perks

You’re not going to find as many perks on low-fee cash-back cards as you can on premium travel rewards cards, but the Blue Cash Preferred has a few nice features worth mentioning:

• 0% APR on purchases for the first 12 months from date of account opening (see rates and fees) (then a variable rate of 13.99%-23.99%) (see rates and fees)
• Secondary car rental insurance when you pay for the entire rental with your Blue Cash Preferred card
• Up to two years of extended warranty
• Return protection
• Access to Amex Offers

With the exception of the 0% intro APR offer, most of these perks fall into the category of things you hope to never need, but it’s nice to have if you do. These perks also aren’t going to do much to offset the card’s annual fee, so you really have to make sure you’re getting enough value from the cash back itself.

Which cards compete with the Blue Cash Preferred?

The Amex EveryDay® Preferred Credit Card from American Express

The Amex EveryDay® Preferred Credit Card from American Express has a very similar structure to the Blue Cash Preferred card, but it replaces cash-back earnings with valuable transferable Amex Membership Rewards points.

You’ll earn 2x points at U.S. gas stations and 3x points at U.S. supermarkets (up to $6,000 spent per calendar year; then 1x), as well as a 50% point bonus when you use your card to make 30 or more transactions in a single billing period. While it doesn’t offer as many unique bonus categories as the Blue Cash Preferred, based on TPG’s valuation of Membership Rewards points at 2 cents each, it’s a great choice for grocery and gas purchases.

The information for the Amex Everyday Preferred has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom line

It’s great to see Amex adding value for existing Blue Cash Preferred cardholders and new applicants alike, and it’s even better that it’s doing so without raising the annual fee.

While the 6% cash back on streaming services is very appealing, many people will have a hard time justifying the annual fee on this cash-back card when they could be earning transferable points instead.

Additional reporting by Chris Dong.

For rates and fees of the Blue Cash Preferred, please click here.

Featured photo by The Points Guy