Review: American Express Blue Cash Preferred

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This week, we look at a credit card that's all about cash back. But it's also got some drawbacks. Is it right for you?

I review dozens of credit card offers each week to find the best deals.  My goal is simply to help you use credit cards to build and protect your money and credit. Check out more on our credit card page.

When it comes to credit card rewards, I love cards that help me travel in style. But what if you just want the most cash back? American Express offers its Blue Cash Preferred Card with some of the highest cash back rewards available.

Key features

  • $150 cash back as a sign-up bonus. You earn $150 cash back when you spend $1,000 within three months of opening an account.
  • Cash back for spending. Earn 6 percent cash back at supermarkets, 3 percent at gas stations and department stores, and 1 percent on all other purchases.
  • Introductory APR. As a new cardholder, you get zero-percent interest on new purchases for one year.
  • Standard interest rates. You get a rate of 17.24, 20.24, or 22.24 percent, depending on your credit history.
  • Fees. There’s a $75 annual fee for this card, and a 2.7 percent foreign transaction fee.

Advantages

  • $150 sign-up bonus. While the $75 annual fee isn’t waived, this bonus essentially covers it for two years.
  • Leading cash-back rates. 6 percent cash back on groceries is phenomenal, and 3 percent back on fuel  is as good as many gas cards.
  • Promotional financing. You get one year of free interest on your purchases. This is a good deal – but only if you pay it off before the standard APR applies.

Disadvantages

  • Annual fee. $75 is steep. You could sign up for the Blue Cash Everyday card instead, which has no annual fee, but you get less cash back – 3 percent at supermarkets, 2 percent at gas and department stores, and the same 1 percent everywhere else. Do the math and you’ll find that in order to justify the $75 annual fee, you’ll have to spend more than $2,500 annually on groceries; three times that if you’re trying to recoup the fee with higher rebates at gas stations or department stores.  Since the signup bonus covers the fee for the first two years, however, the Blue Cash Preferred is a better choice until the fee kicks in.
  • High interest rates. If you want big rewards, be prepared for big interest rates. So this is only a good deal if you pay off your card each month. If you don’t, you’re better off here: 5 Credit Cards With Low Interest Rates.
  • Foreign transaction fees. When you travel, these fees stink. I hate them. (See How to Avoid Foreign Transaction Fees.)

Bottom line

Get it if: You want big cash back. In fact, you can use this card to get 6 percent cash back all over town by purchasing gift cards at the grocery store – since all purchases there are subject to 6 percent cash back.

Forget it if: You carry a balance. Just focus on cards with the lowest interest rates, not rewards.

This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program. Also note that any terms, rates or other features described in this article can change without notice. Always double-check everything with the issuer before applying for any credit card.

Stacy Johnson

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