Note: As of 4/30/2011, American Express replaced the American Express Blue Cash Card (which is no longer available), with 2 new credit cards: the Blue Cash Everyday® Card from American Express, and the Blue Cash Preferred® Card from American Express. If you spend more than a few hundred dollars on food at supermarkets (defined as U.S. stand-alone supermarkets), then the Preferred version will likely outperform the Everyday card.
Last Reviewed: 7/23/2010
The Amex Blue Cash Card (NO LONGER AVAILABLE) is a force to be reckoned with, ranking near the top of the pack if you spend enough on the card. If used skillfully, Blue Cash can earn an effective cashback rate of 3% or even more.
The rewards scheme for this card needs a bit of explaining, so it’s a good thing you stumbled across this article.
Warning: if you think you will spend materially less than $1,000 or so per month with Blue Cash, this may not be the card for you. In order to hit the “big rewards” (read more below) you need to reach $6,500 per year in spend, and if you are only spending say $500 per month, you won’t reach that higher tier each year.
American Express Blue Cash Rewards
Here’s a quick table summarizing some of the key features of the card:
|Rewards||Tiered-see table below|
|Redemption requirements||Cash back is awarded annually after 12 consecutive billing cycles in the form of a statement credit. Update: as of March 15, 2011, rewards can be redeemed anytime, with a $25 minimum redemption-a significant improvement in the redemption structure.|
|Sign up bonus||None|
|International Transaction Fee||2.7% of each transaction after conversion to USD|
American Express Blue Cash Rewards Details
The Blue Cash card has a split category tiered rewards structure (that sounds complex!). Basically, AMEX separates out spend into “everyday purchases”, which include spending at supermarkets, gas stations and drug stores, and “all other purchases”, which includes any other purchases not falling into the former bucket. Purchases at superstores or warehouse clubs do not qualify as Everyday Purchases.
On the first $6,500 of spend per year, Everyday Purchases earn 1% cashback, while all other purchases earn only 0.5% cashback. Once you spend $6,500 you move up to the next rewards tier, where Everyday Purchases earn a whopping 5% cashback, and all other purchases earn 1.25%. The table below lays this all out in an easy-to-digest format.
|Year-To-Date Purchases||Cashback on Everyday Purchases||Cashback on All Other Purchases|
The Best Strategy To Maximize the Value of the American Express Blue Cash Card
As you can see, for your first $6,500 of spend each year, the Amex Blue Cash card is actually inferior to any plain vanilla 1% cash back card. It’s not until you get above that threshold that it becomes a powerhouse-especially if you use it just for Everyday Purchases.
In the hands of the right person, the Amex Blue Cashback Card can be a deadly weapon. The strategy is quite straightforward, as follows:
- Use Blue Cash on any and all purchases until you hit the $6,500 ceiling which propels you into the next earnings tier for the year.
- Once you hit the next tier, immediately stop using the card for any purchases except those classified as “everyday purchases”.
If you follow this strategy, you can turn a good cashback program into a great one. The table below shows what the effective cashback rate of the Blue Cash card could be while varying 2 key assumptions: the number of months it takes you to hit the $6,500 spend threshold before moving to the more profitable rewards tier, and the amount you spend each month on Everyday Purchases. The other key assumption that GetDebit makes is that once you hit the $6,500 tier, you only use the AMEX Blue Cash card for Everyday Purchases.
As the table higlights, it’s entirely possible to have the American Express Blue Cash card performing at around 2.75% to 3.00% effective cashback for a given year, if used skillfully. If we use 2% cashback as a minimum threshold for owning this card, and assuming it takes you a full 4 months to reach the next tier, you would only need to spend about $350 per month on Everyday Purchase categories to hit the 2% annualized cashback rate.
|# Months to Reach Tier 2 (after spending $6,500)|
GetDebit Strategy Tip: Getting to the $6,500 Threshold Faster
Here are a couple of tips on how to get to that critical $6,500 spend threshold as fast as possible.
- Besides the already-stated advice of making sure to use your Amex Blue Cash card everywhere possible prior to hitting the $6,500 threshold, make sure you get an extra card for your significant other. You could even get one for your parents etc, but it might introduce some extra administrative overhead in terms of squaring up the monthly billing.
- Purchase $1 coins from the US Mint. You can purchase 4 boxes every 10 days with free shipping-that’s roughly an extra $3,000 of spend on your Blue Cash card in 1 month. That ought to give you the turbo boost you’re looking for. Just be sure to use the program in good faith, and spend the coins at retail establishments, versus just depositing in the bank. Here’s the link to the exact page where you can make these purchases.
American Express Blue Cash Expenses and Fees
The AMEX Blue Cash card has no annual fees or rewards program fees. However, you are charged 2.7% of each international transaction after conversion to USD.
GetDebit’s Final Assessment of the American Express Blue Cash Card
Hopefully by now GetDebit’s conclusion is clear: if you have the discipline, after getting to the better rewards tier (that is, after spending $6,500 in any 12 month period), to just use the card for Everyday Purchases (supermarkets, gas stations, and drug stores) and you spend at least $350 per month on Everyday Purchases, this card could be the top ranked cashback card for you. Even without these assumptions, it’s highly likely that Blue Cash will still be an awesome addition to your wallet.
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.