By Quentin Fottrell
American Express says its new Blue Cash credit card system will simplify the rewards system for consumers. But there is one big change that’s not so complicated: it’s cutting the cash-back for gas purchases.
The current non-fee Blue Cash card offered 1% cash-back on “everyday purchases” or 5% when you spend $6,500 on your card. Everyday purchases include those made at supermarkets, drugstores – and gas stations.
American Express is rolling out two new Blue Cash credit cards. Those on the existing Blue Cash card won’t be forced to migrate to either of the new cards, but American Express will stop marketing the old card.
The “Preferred Card” has a $75-a-year fee and gives a more modest 3% cash-back at gas stations and department stores. On the upside, the new fee-paying card offers a whopping 6% at grocery stores and 1% cash-back on everything else.
With the Blue Cash “Everyday Card,” which like its predecessor doesn’t charge an annual fee, consumers only get 2% cash-back at gas stations and department stores, 3% cash-back at grocery stores and 1% on everything else.
In their favor: with both cards you start earning on the first dollar and there are no spending limits. You may refer an unlimited amount of friends and earn $75 for each approved referral on the Preferred Card and $25 on the Everyday.
The average family spends $3,753 annually on groceries, $1,725 on apparel and $1,986 on gas and oil, according to the U.S. Bureau of Labor Statistics; Amex says this means an Everyday or Preferred Card could earn $187 to $337 cash-back each year.
An Amex spokesman says gas prices are an “emotional” topic right now, but tells Pay Dirt, “When one looks at where consumers are spending the most, it’s important to point out that it’s groceries over gas.”
Do you think the new cards give a better deal?