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While this is a travel blog that emphasizes how to maximize points, cash back cards are still incredibly popular purely for their simplicity. You spend a certain amount, and you receive a percentage of cash back in return. That’s it. No points valuations, transfer partners, or complexity.
American Express has refreshed one of its more lucrative cash back cards, the Blue Cash Back Preferred.. Here’s what is changing, including an increased initial bonus offer.
Cash Back Categories Are Changing On The Blue Cash Preferred
Say goodbye to department stores and say hello to streaming services (i.e. Netflix) and transit and rideshares (i.e. the subway and Uber). The cash back category bonuses on the Blue Cash Preferred are the primary changes being made to the card.
- 6% cash back on U.S. streaming services (NEW)
- 3% cash back on transit, including parking, tolls, trains, and rideshare (NEW)
These two bonuses are essentially replacing the 6% cash back on department store purchases. I see this as a net win. Sure, there may have been some bigger spend items at department stores which carry a wide range of items, but personally, I would have to go out of my way to spend at one of those stores. These category bonuses are ones that most people like myself — who live in a city and has multiple streaming services — would be spending on no matter what.
For that reason, I can completely see the appeal for a card like this. It’s not only simple in that it’s a cash back card, the new bonus categories are items that many people already spend money on anyhow.
Other Benefits On The Blue Cash Preferred
These other benefits remain on the card — the 6% cash back at supermarkets is particularly lucrative. And if you own a car and commute to work, Amex was smart to retain the 3% cash back for gas stations.
- 6% Cash Back at U.S. supermarkets (on up to $6,000 in purchases then 1%)
- 3% Cash Back at U.S. gas stations
- 1% Cash Back on other purchases (Cash Back is earned in the form of Reward Dollars that can be redeemed for a statement credit)
The New Offer On The Refreshed Card
New eligible Card Members who apply and are approved on or after May 9, 2019, will receive a welcome bonus of $250 back after spending $1,000 on purchases in the first 3 months of Card Membership (received in the form of a statement credit). That’s up from $200 back. There is a $95 annual fee on this cash back card which can all be easily negated if you spend in the category bonuses. (See Rates & Fees)
Let’s take a look at real world example of my spend, and how much cash back I would receive if I were to use this card only on these categories.
How Much Yearly Cash Back Would I Earn Based On These Bonus Categories?
6% Cash Back Categories
- Streaming Services: My spend of $35 monthly x 12 = $420
- Supermarkets: My spend of $120 monthly x 12 = $1440
6% of $1860 = $111.60 per year
Besides clearly not spending enough on groceries and eating out in New York City way too often, it appears I would earn about $100 in cash back each year. Personally, I would rather put that supermarket spend on the Chase Freedom’s grocery spend bonus of 5x Ultimate Rewards points (rotating) or the American Express Gold’s 4x Membership Rewards points. However, since this is for people interested in a cash back card, a 6% return on groceries is pretty darn great.
As mentioned, you can also take into consideration other high earn cards for every dollar spent on groceries.
- American Express Gold: 4x Membership Rewards points
- American Express Blue Cash Everyday: 3% Cash Back (the no annual fee version of this card — see rates & fees)
- Chase Freedom: 5x Ultimate Rewards points this quarter, but those categories rotates
3% Cash Back Categories
- Transit and Rideshare: My spend of $140 monthly x 12 = $1,680
- Gas Stations: My spend of $0 x 12 = $0
3% of $1,680 = $50.40 per year
Transit is a category that is also covered by the Chase Sapphire Reserve (coded as “travel”) that earns 3x Ultimate Rewards points. But again, for a cash back card where things are kept simple, 3% back is a solid offering.
In total, my approximate spend would’ve allowed me to earn $162 in cash back in just the bonus categories alone, easily surpassing the $95 annual fee.
According to a survey by Amex, the places where older millennials (ages 31-38) are spending the most day-to-day now, compared to five years ago, are groceries (67%), streaming (36%) and commuting (34%). This is exactly the target audience for the Blue Cash Preferred and why these changes were made.
The important takeaway here is that this card only makes sense if you have significant spend in the category bonuses. That means if you’re interested in a cash back card, put in the minor work and actually forecast how much cash back you would receive in a given year. Then, compare that to other cards like the American Express Blue Cash Everyday (no annual fee) or a restaurant and travel-focused card like the American Express Gold.
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