American Express Rewards vs Cash Back:

[Skooby]

It's been a few years since I've posted in this forum...but I thought this would be the perfect place to ask this question.

I've had the American Express rewards for years...they have dollar for dollar points when you earn but when you 'cash in' your rewards it's 200 points for every one dollar.

For the 'Blue Cash everyday' card it's 3% for grocery stores, 2% for gas stations and department stores and 1% for any other purchase. Note: There is no tier system, no caps and no rotating categories. No annual fee.

Just taking their 1% at $200 I get back $2. I had to spend $200 in the rewards to get just one dollar. I guess I've answered my own question...the Blue Cash is the better card. But I figure I would ask you all anyway.

They also have a Blue Cash Preferred ($75 annual fee). 6% groceries, 3% gas stations and department stores, 1% for any other purchase.

Profile:
34, Single, no kids. If I go for the cash back...which one should it be, preferred or everyday?

[Slug]

You need to calculate based on your budget. For me, my grocery spending legitimizes the Preferred card, but I have a wife and kid and do the organic food thing. For you it may not.

[DKAS]

From my personal experience, you would get lot more value from reward points if you were transfering them to airlines or hotels. Otherwise the cashback is obviously better and I would prefer the one with no fee in your situation.

[JoshuaHeckathorn]

Cash back is generally the better option over points these days, especially if you simply want cash. While you can still find deals redeeming points for airfare, hotels, etc., you're never going to get the best deal by redeeming points for cash.

Take your monthly expenses and estimate how much cash back you can expect to receive. The $75 fee might justify the increased rewards, but my guess is it won't for you unless you're spending major moolah each month. I could be wrong.

[Petunia 100]

So if you are choosing cash, then you are really earning 1.5% for groceries, 1% for gas and department stores, and .5% for everything else.

I didn't know that. I have recently received an AmEx blue, thinking I would use it in lieu of Chase Freedom, but now I think I will just stick with Chase Freedom.

[danieldroga]

Opt for a cash back, you will have more advantages when you choose that.

[DKAS]

Opt for a cash back, you will have more advantages when you choose that.

I agree with Daniel here, you will have a lot more flexibility with doing cashback. That is something people overlook.

[greenskeeper]

The single CC I have (which I pay in full each month) offers up to 5% cash back on monthly specials, 1% on everything else. Each month I put the cashback towards the balance.

It is nice to have the credit card company PAY ME to use their card.

[naomibatac]

Yes, I agree with most of the people in this thread who preferred the cash back option. Cash back is really best and most convenient.

[SeanH]

The breakeven point between the Blue Cash Everyday and Preferred is ~$210 in grocery spending a month at grocery stores (not Walmart, Target, Sams or Costco). I don't take into account the slight increase in rewards for department stores/gas as those aren't major spending categories for me.

[JoshuaHeckathorn]

Amex is also currently offering a $100 bonus for the Preferred option after you make just $500 or more in purchases during the first 90 days, so the bonus offer will completely cancel out the annual fee during the first year. If you think you'll at least spend $500 during the first 3 months, you might as well give the Preferred option a try.

In the future, if you decide the annual fee version isn’t worth it based upon your yearly spend, you can always downgrade before the second year while keeping your $100 bonus.

[Frugal]

I personally would prefer the straight cash back rewards, rather than only 2-3% on some particular purchases. My spouse has a card like that, and i don't like how they reward you, and how often. Better to get cash back, and esp. if it could be quarterly or twice a year.