American Express Blue Cash Review (discontinued for new applications)
Updated April 2, 2018.
The Facts
The Math
Old Blue Cash vs. Blue Cash Preferred: If your annual spending in groceries is less than $6,000 per year, just go with Blue Cash Preferred ($75 annual fee), because you will earn much less cashback with the Old Blue Cash. For big spenders in bonus categories, a strategy is needed to burn through the $6,500 threshold on Old Blue Cash quickly. For the first $6,500 on Old Blue Cash, you will incur a loss between ~$100 (when compared to a 2% cashback card like Fidelity Visa for general spending) and $225 (when compared to Blue Cash Preferred for groceries considering the $75 annual fee). So it is better to burn through the $6,500 threshold in general spending, and the $100 loss can be seen as an effective annual fee. After that, you will net 3% cashback on the bonus categories, beyond Fidelity Visa's 2% cashback. If your spending in bonus categories is $10K after the threshold, you will earn an extra $200 beyond Fidelity Visa ($10,000 x 3% - $100 = $200). If your spending in bonus categories is $50K after the threshold, you will earn an extra $1,400 beyond Fidelity Visa.
The Conclusion
For most consumers, Blue Cash Preferred probably makes more sense. However, if you have an effective strategy to burn through the $6,500 annual threshold quickly and have very large spending in bonus categories, Old Blue Cash is an amazing option.
The Facts
- Annual Fee: none
- Signup Bonus: none
- Rewards: For your first $6,500 in purchases in an account year, Blue Cash only returns 1% on U.S. grocery stores, U.S. gas stations, and U.S. drugstores ("Everyday Purchases") and 0.5% on other purchases. After your first $6,500 in purchases in an account year, however, Blue Cash returns 5% on Everyday Purchases up to $50,000 spent and 1% on all other purchases.
- Other Facts: This card is often referred to as the "Old Blue Cash" nowadays to avoid confusion with the newer dual Blue Cash: Blue Cash EveryDay and Blue Cash Preferred. For most consumers, the new Blue Cash, especially Blue Cash Preferred, will be a better option, since you will be able to earn cashback on bonus categories right away. However, for those who have strategies to burn through the $6,500 threshold quickly and have large annual spending in bonus categories, Old Blue Cash is invaluable.
- Other Benefits: (1) Amex Offers - you receive savings in form of statement credit or earn bonus MR points on select merchants when using your Amex card; you need to manually add an offer to your Amex card to be eligible for savings or bonus, and unlike other savings/bonus programs, you don't need to shop through a certain portal. (2) ShopRunner membership for free 2-day shipping with select merchants. (3) Entertainment Access including American Express Presale and Premium Access (Dining Access).
- History: Even with all the catches and various devaluations over the years, Old Blue Cash has enjoyed huge popularity. After the introduction of the new dual Blue Cash, Amex has kept an unadvertised but active application page for Old Blue Cash for quite a while, and finally some time in 2015, Amex officially brought back Old Blue Cash to its credit card lineup. In late 2014, to tackle rewards abuse, Amex started shutting down accounts that were suspected to be abused and imposing the $50K annual spending cap on bonus categories for new customers. As of 2018, it appears that Old Blue Cash is not available for new applications again.
The Math
Old Blue Cash vs. Blue Cash Preferred: If your annual spending in groceries is less than $6,000 per year, just go with Blue Cash Preferred ($75 annual fee), because you will earn much less cashback with the Old Blue Cash. For big spenders in bonus categories, a strategy is needed to burn through the $6,500 threshold on Old Blue Cash quickly. For the first $6,500 on Old Blue Cash, you will incur a loss between ~$100 (when compared to a 2% cashback card like Fidelity Visa for general spending) and $225 (when compared to Blue Cash Preferred for groceries considering the $75 annual fee). So it is better to burn through the $6,500 threshold in general spending, and the $100 loss can be seen as an effective annual fee. After that, you will net 3% cashback on the bonus categories, beyond Fidelity Visa's 2% cashback. If your spending in bonus categories is $10K after the threshold, you will earn an extra $200 beyond Fidelity Visa ($10,000 x 3% - $100 = $200). If your spending in bonus categories is $50K after the threshold, you will earn an extra $1,400 beyond Fidelity Visa.
The Conclusion
For most consumers, Blue Cash Preferred probably makes more sense. However, if you have an effective strategy to burn through the $6,500 annual threshold quickly and have very large spending in bonus categories, Old Blue Cash is an amazing option.