Archive for June, 2009

American Express Blue Cash Review

In a world where credit card issuers continually change their rewards and program, the Blue Cash from American Express is the same cash back credit card as when it was first introduced. It is in my opinion one of the best cash back credit cards available to consumers today.

Rewards – But what are its’ feature and how does the cash rebate work. Most cash rebate cards simply pay 1% cash rebates on every dollar that you spend on the card. The Blue Cash goes one step better than that. You can earn 5% cash rebates when you make any gasoline, supermarket and drugstore purchases on the card. You can also earn 1.5% rebates on all your other regular purchases on the card. As these rebates are pretty generous, American Express requires that you meet some spending hurdles. You have to spend $6,500 (from your calendar date) before you could earn these rebates. Before that, you will earn 1% on gasoline, supermareket and drugstore spending and 0.5% on all your other spending.

Fees – Like most credit card these days, the Blue Cash has no annual fee. They do have a teaser rate offer for balance transfers. New cardholders get 2.99% APR for balance transfers that is good for up to 12 months. The good thing about the balance transfer offer is that American Express caps the balance transfer to $99 (standard charge for a balance transfer fee is 3% of the amount transferred). Most other major credit card issuers have removed the caps on balance transfer.

How does it compare with other cards? – I honestly think there is simply no peers among its competitors. All other cards offered by other issuers only offer 1% rebates. There used to be better cards around but they have all but disappeared. Three years ago, the Citi Dividend Card offered a straight 5% rebates on gasoline, supermarket and drugstore spending with no tiers (spending requirements). Chase did the same thing with the Chase Cash Plus Rewards. But consumers who got cash back credit cards are generally a savvy bunch who pay their bills fully every month. Hence, these cards did not make much money for the credit cards companies because their consumers did not carry a balance! Soon they began scaling back their rewards. Citi Dividend reduced their rebates for gas, supermarket and drugstores to 2%. Chase got rid of the Cash Plus card and introduced the Freedom Card that paid 3% rather than 5% on the same items. Citi no longer has the dividend card and the Chase Freedom now only pays a standard 1% rebates on everything (though they try to trick consumers by offering 3% for the first six months).

Other good cards – The only real competition that the Blue Cash has is another card from American Express. And the card is the American Express Costco Card. It pays 3% on gasoline, 2% on restaurant dining and 2% on travel. It is not directly comparable because they pay more than 1% rebates on different items from the Blue Cash (with the exception of gasoline). There are also no tiers and spending requirements. You will also have to be a costco member.

Thumps Up – I give the Blue Cash a thumps up in the cash back space. I think that along with the Costco Card, it is the best cash back credit card in the market today. Though there is a tier formula and spending requirements before you can earn the maximum rebates from this card, it has actually enabled American Express to be profitable on this card and not have to change its formula like it’s other competitors. I personally have this card and highly recommend it.

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