Choosing your credit cards is an important decision which warrants a review of your spending habits and consideration of what features are most valuable. For example, some people do not carry balances on their credit card so they don’t care about the APR; they want points or cash back. Others may be spending a lot on certain consumer categories – e.g. airfare, gas, hotels, etc. – so they want cards with rewards tied to their frequently purchased products/services.
If you spend over $1,500 each month and are in the market for a card great cash back rewards, I recommend you look no further than the American Express Blue Cash credit card. I have used this card as my primary credit card for almost a year now and can say I’m very pleased. Here is a list of the benefits of this card:
- No annual fee.
- Up to 5% cash back at supermarkets, gas stations and drugstores
- Up to 1.25% cash back on all other purchases
- Add family and/or friends on your card, at no cost, to accumulate more cash back
I have no idea what the APR is on the card and it really doesn’t matter. The balance on this card, just like any other credit card, should be paid off in full at the end of each billing cycle. This is one of the tenets of the Modern Saver!
The cash back balance, which can be monitored online, is paid to the card holder on the annual anniversary of the card. If you think about it, you’re probably spending a good chunk of money at the grocery store, gas station, and drug store on a weekly basis (if not more often). Since you’re spending so much money at these places, you are doing yourself a disservice if you’re not getting as much cash back as possible.
Crossing the Threshold
There is one caveat to the 5% cash back feature, which most online reviews are very quick to point out. When you first receive the card, you’re actually only getting 1.25% cash back on supermarkets, gas stations and drugstores and 0.5% cash back on everything else. Think of this as the “beginning tier” of cash back rates for the card. Only after you have accumulated $6,500 in spending, the “better tier” cash back rates of 5% on gas, groceries, and drug store purchases and 1.25% on everything else will automatically kick in from that point forward.
For example, if you received the card in January and spent $1,000 in January, you would be receiving the 1.25% and 0.5% cash back rates. Continuing with the example, if you spent $1,000 each month, you would not be receiving the better rates of 5% and 1.25% until mid-June, when you would cross the $6,500 spending threshold.
Since I frequently travel for work, I was able to reach the threshold in only a couple of months by putting all of my hotel, airfare and out-of-town meals on the card. I highly recommend fellow travelers to do the same if they can use a non-company credit card for expenses. I have a Visa which offers great points on travel expenses so I reverted back to that card for travel expenses after the threshold was met.
Other Benefits and Considerations
In addition to the cash back feature described above, American Express Blue Cash also provides consumer protection benefits:
- Purchase Protection Plan – Receive reimbursement for items (purchased with the Blue Cash card) which have been accidentally damaged or stolen within 90 days of purchase.
- Return Protection – If you try and return a designated item within 90 days of purchase and the merchant won’t take it back, American Express will refund the full purchase prices up to $300 per item.
- Fraudulent Charges – You will not be held liable for fraudulent charges.
As a side note, keep in mind that American Express is not as widely accepted as the other major credit cards. It’s close, but not quite as popular. This is due to the relatively higher fees American Express charges the merchants to accept their cards. It is wise to have a backup credit card ready for any place that doesn’t take American Express. In my experience, American Express can be used on 90-99% of transactions, but there are still the few places where you need a different method of payment.
Category: Credit Card