Among reward card users, there’s a constant debate about whether cash back is better than travel rewards. One of the leading cash back cards has always been the Blue Cash Preferred® Card from American Express, which features and amazing 6% cash back on up to $6,000 spent each year (then 1%) at US supermarkets. However, this card has been around a long time, and some of its other cash back offers have started to become outdated. Thankfully, American Express just refreshed the card and it’s now more compelling than ever.
What the new Blue Cash Preferred® Card from American Express offers (*please note, this offer is now expired. See card details for current offers)
New applicants earn a $250 statement credit after spending $1,000 within three months of account opening. Rewards for spending include:
- 6% cash back on up to $6,000 spent each year at US supermarkets (then 1%)
- 6% cash back on select U.S. streaming subscriptions.
- 3% cash back on transit including taxis/rideshare, parking, tolls, trains, buses and more.
- 3% cash Back at U.S. gas stations.
- 1% Cash back on other purchases.
You also receive 12 months of 0% APR introductory financing on both new purchases and balance transfers, with a 3% balance transfer fee with a $5 minimum. The regular APR will then go to 15.24%-26.24% variable. Benefits include purchase protection, return protection and extended warranty coverage. There’s a $95 annual fee for this card and a 2.7% foreign transaction fee. See rates and fees.
How does this card compare to travel rewards cards?
A popular travel rewards card at this price point is the Chase Sapphire Preferred® Card. It offers double points on all travel and dining purchases, and one point per dollar spent elsewhere. You also receive 60,000 bonus points, worth $750 in travel reservations through Chase Ultimate Rewards, after you spend $4,000 on new purchases within three months of account opening. But more importantly, you can transfer your rewards to airline miles or hotel points, which can be much more valuable depending on how they are redeemed. There’s a $95 annual fee for this card and no foreign transaction fees.
The Sapphire Preferred has a more generous sign-up bonus, but when you buy groceries or streaming subscriptions it can’t compare to the rewards offered by the Blue Cash Preferred. And while the Amex offers up to 3% cash back on transit including taxis/rideshare, parking, tolls, trains and buses, Chase considers all of those to be travel and gives you two points per dollar.
But most importantly, it’s what you do with those points that really determines how much value you can get out of the Sapphire Preferred. When you transfer those points to airline and hotel programs, and redeem them for things like luxury hotels and expensive business and first class airline tickets, it’s possible to receive several cents in value per point redeemed.
Finally, there’s no reason why you can’t have both types of cards, and use the cash back card where it’s most valuable , and earn travel rewards where you are offered a bonus. By examining the best cash back and travel rewards cards, you can decide if one, the other or both is best for your needs.