Why I Use Blue Cash from American Express

In $10k Challenge: Make Money with Credit Cards I promised to detail why I use the Blue Cash from American Express credit card. Here goes:

1. It makes me a good return. In 2005 I earned $330 with the card and in 2006 it will be more (I'm just waiting for my final statement for confirmation of the number -- I'll post on it when I get it.) I averaged almost 1.7% cash back from the card -- a pretty good amount these days. I may have been able to earn more with other cards (I'll do that analysis in a later post as well) and could certainly have earned more with a multiple-card strategy. But I don't want the hassle of carrying/managing several cards and when all is said and done, 1.7% is a good return for time investment (which is very little.)

2. I trust American Express. I've had cash back cards before, but the banks have always changed the rules of the game several times to cut my returns down each time. I don't think American Express will do this. I think they came a bit late to the cash back game and, as such, had time to see what worked and what didn't -- and they set their rates accordingly. That said, the second they change the rules, you'll see a post from me on it saying how they cut the value of their program.

3. American Express is accepted at Costco (and most other places.) We shop a ton at Costco (and get gas there too) and if you want to charge something there, it has to be American Express. In addition, Amex is also accepted at most other major stores. Some smaller, local stores/websites only take Visa or MasterCard, and for those cases I use the Subaru Platinum MasterCard from Chase (which has saved me a bundle of money, by the way.)

I've used the card for a few years now, love it, like the returns, and would suggest Blue Cash from American Express to anyone who would ask me to recommend a good cash back credit card.

Anyone else out there use the card? What do you think of it?

Anyone else have what they think is a better cash back credit card? I'm always looking for a better deal. ;-)

Comments

[Alex Wang]

Thanks FMF for the tip! I'm was already a BLUE AMEX card holder, but I still needed to call in to AMEX and request a "product change" for them to change my card to the Cash Back Rewards program. Product change doesn't affect my credit and does not open a new credit line, just updates my current card to received the benefits that FMF talked about.

Alex

[moneysmartlife]

I use AmEx Blue as well, mainly for the first reason you listed. One problem I run into is when merchants don't accept AmEx. In these cases I have a backup rewards Visa I use, Chase Rewards card.

[Amillionby40]

I just got an amex card for my business. Your post is very encouraging to me as I've never been an amex customer (although my business does accept them as payment). Perhaps I should look into getting one of the blue cards for personal use. Thanks for the tip!

[MIke B.]

I've had Blue from AmEx about 3 years now. I think my average return is about $500, but I'm not sure what that comes out to percentage-wise. For places that don't take Amex, which I'd say is about 10-20% (we go to Sam's Club, esp. for gas and they don't take it) I have a Chase Cash back card which seems pretty solid as well, though again I haven't run the numbers. The only think that kind of annoys me about Amex is that they mail you the check yearly at the time of their choosing, where with the Chase card I choose to have them send it in $25 increments whenever I want which I like better.

[KalluMama]

I have been using CapitalOne Visa and been averaging about 1.5% cash back. So far I have had a very good experience with them. I prefer using VISA since it is acceptable almost anywhere.

[alandr7]

I have 5+ years of AMEX Blue Cash Back experience and rewards. I have all bills except mortgage and electricity (PG&E just doesn't get it) going to the card each month. Plus, I charge school on it as well for an extra boost!!! I average $700-1000 per year in cash back. The only retailer that I "frequent" that will not take AMEX is Fry's Electronics (so what......they pay Visa and Mastercard 2-3% per purchase, what's wrong with 5% for AMEX).

I recently got a Jupiter Visa card while purchasing some hardware from Apple.com. I will switch my bills to the new card since each $2500 charged (outside of Apple) gives you a $25 iTunes reward!!!!!!

As you can tell, I go back and forth depending on what my wants/desires are. Regardless of the plastic choice at the moment, I never carry a balance.....creditors lose!!!! :-D

[indio]

Amex is preferred card at costco but the blue card is not elegible for cash back there. Did you get a special one time deal for purchases there?
Here's the fine print from the web site: "Everyday Purchases" are Eligible Purchases made at U.S. supermarkets, gas stations and drugstores, in each case that are not departments of superstores or warehouse clubs.

[Bill]

I have the cash back card from AMEX and applied for it through Costco. I get 3% on travel, 2% on food, and 1% on everything else. I am waiting for my $630 check to come in February. I travel a lot for work, so every airline ticket, hotel, and entertainment meal goes on this thing. I am also an executive member at Costco, so every purchase I make there is like a double whammy because Cosco gives executive members extra percentage off purchases (executive membership is only an extra 50 bucks a year I think over regular membership, so its really worth it if you shop there even occasionally).

[Ron]

I've used Discover for a dozen years because of their cash back plan. But I've had AmEx Blue Cash Card for about a year and like it even better. Discover is accepted at Sam's Club (where AmEx is not), so I still use it on occasion. Another great benefit of the Blue Cash Card is the access to helpful services through American Express.

[FMF]

Indio --

Yes, it's eligible for rebates at Costco too. Here's the entire compensation structure:

Total Annual Spend

Level 1 -- Up to $6500
Level 2 -- $6,501+

Cash Back on Everyday Purchases

Level 1 -- 1.00%
Level 2 -- 5.00%

Cash Back on Other Purchases

Level 1 -- 0.50%
Level 2 -- 1.50%

*Everyday purchases include purchases at stand-alone U.S. supermarkets, gas stations, drugstores, and home improvement stores. Stand-alone locations do not include the departments of superstores or warehouse clubs where the standard rebate of up to 1.5% applies.

[Doug]

This reads more like an advertisement for American Express. I suspect this is one of those bloggers that are paid to write wonderful things about whomever is paying them off.

[FMF]

Doug --

That is not true. I am not receiving any payment to write great things about American Express.

I have written various posts about different credit cards and which are best for people under various circumstances. For me, this is the card that works best and the one that I personally use -- and I have for a few years now. That's what people want to hear in a PERSONAL finance blog -- the experiences of the writer PERSONALLY. That's what you're getting here. I've found something that works and am sharing it with everyone.

It's the same when I write something great about Quicken, Vanguard, and the like. I use them, I like them, and I recommend them.

I have done some ReviewMe.com posts, but all of those are stated upfront that I am being paid to review a site (that's review a site -- not gush about how great it is.) And, BTW, most of my reviews of those sites are not good ones. I have never taken a PayPerPost ad/review.

And it's not all love here either. Search around and you'll see that Sears, many popular personal finance books, and many others get quite a bad review from me.

As far as my ad policy goes, you can find it here:

http://www.freemoneyfinance.com/2005/10/fmf_speaks_my_a.html

Dig deeper and you'll see that 100% of this site's revenue goes to charity every year. Here's the list of charities for last year:

http://www.freemoneyfinance.com/2007/01/2006_charities_.html

So, in the end, all I'm doing is recommending a product that I use and have earned over $800 with in the past two years. I think that's a pretty good deal for doing what I'd do anyway (charge with a card.)

[Doug]

FMF,

I apologize for making an assumption about you. I admit, I didn't read the entire blog, your policies, or the like. I originally clicked on a link from consumerist.org to this particular entry in your blog. Given the recent attention where big corporations are paying bloggers, my assumption was you were a shill for American Express. I'm glad I'm wrong. I've bookmarked your Blog: Please count me as a regular reader now :)

Doug

[FMF]

Thanks, Doug. I appreciate you coming back and responding the way you did.

And welcome to Free Money Finance! Enjoy! ;-)

[Dan Williamson]

So do we get the cashback at Costco or don't we? I just got a blue cash card and reading through here says we do and also that we don't..... anyone know for sure? Also, if anyone has a way of getting to the 2nd tier of blue cash quickly, for example buying bonds with it (which i think is not possible anymore), I would love to hear it.

[chris]

I am an Exec member at Costco and get 2% back on purchases there. Should i get the Costco Amex (would that give me 3% back at Costco or just 1%) or the Amex Blue Cash.

I charge approx $80K on my charge cards per year.

[FMF]

Chris --

Ask Costco for the details. If you cahrge $80k per year, you should be getting back a HUGE amount in rebates ($2-$3k).