American Express Blue Cash Top Credit Card for Big Spenders (And How to Make Even More with It by Charging Your Mortgage Payments)

In my search for the best cash back credit card, I started with the Blue Cash from American Express card since it earned me almost $500 last year. I'm on my way to beating that this year, but in the meantime, I discovered a hybrid strategy that can earn up to 2.6% cash back by using a combination of the Blue Cash from American Express card and the Chase Freedom Cash Visa Card (which has a $50 bonus offer available at the time of this post). I'm in the process of shifting to the hybrid strategy (I've applied for the Chase Freedom Cash Visa Card) but I may not make the shift until January as I've reached the second tier of rewards on the Amex card and I want to ride it as long as I can.

That said, I ran into two pieces on American Express that I wanted to pass along to you all. First, Money magazine recently named the Blue Cash from American Express card the top reward card for big spenders. As we saw in How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards, if you spend below $12,000 a year, the Chase Freedom Cash Visa Card is a better deal while over $24,000 makes the Blue Cash from American Express card better. Somewhere in between, the Amex card takes over from the Chase card, probably around the $15,000 charged per year level. I'm well above this, and hence I use the Amex card as my top choice.

Second, in The Keys to Getting the Best Reward Credit Card for You, I stated the following:

Charge all you can on the card. Once you have the above figured out and decide which card or cards are best for you, make the most of it (them) by charging all you can. Look at all your big purchases and see if there's a way to put them on your card. Look at regular, on-going purchases and see if you can pay these (with no cost) via credit card. Especially look at all those purchases that give you extra rewards (such as the gas and grocery store extras noted above) and be certain to get as many of those charged as possible. For a couple creative ideas, check out Can You Charge a Car on Your Credit Card? and Donate to Charity with a Credit Card.

I never even dreamed that people could charge their mortgage payments on a credit card, but it appears that American Express now offers this option. The details:

In what is considered to be a first for the credit card and mortgage industries, American Express said it will now allow cardholders with any of its charge or credit cards and a prime loan from American Home Mortgage to charge their mortgage payments and earn reward points for doing so.

American Express currently has one partner - American Home Mortgage. But later, it plans to announce another partner-lender, with more partners in the works, said company spokesperson Christine Elliott.

Wow! That could really rake in some big bucks. Let's say your mortgage payment is $2,000 per month. If you're already at the top tier level of rewards with the Blue Cash from American Express card, you'll earn 1.5% back on $24,000 a year -- that's $360! Unfortunately, the program costs $395 to set up, so you're almost even at the end of one year, but after that, it's all gravy. Not bad for doing something you'd be doing anyway.

Of course, you HAVE to pay off the card every month for this to work. Otherwise, such a plan would get very, very expensive.

Comments

[Tim]

Getting cash back sounds great. But don't people tend to spend MORE when they are using plastic? Somewhere in the neighborhood of 15% more on average? We've always used credit cards and paid our balances off in full each month. However, recently we started paying cash and our savings is going up. My recommendation is to cut the card up and pay cash. Yes, you will give up your "cash back" savings. But at the end of the day, you will probably have more in your pocket. If you don't believe it ... give it a try. I was also skeptical but after trying it, I'm seeing the results.

[Steve Herman]

Excellent comment on American Express cash back program!
I highly recommend using 1 credit card for all expenses.
I DON'T however recommend using a checking or savings account.
sincerely,
Steve Herman

[kitty]

" But don't people tend to spend MORE when they are using plastic? Somewhere in the neighborhood of 15% more on average?"
Some people do. Others don't. Take the average, and you'll get "people spend more on average". Averages are misleading. "This desease is likely to affect men in their 50s. There are two known cases - a 98 year old man and a 2 year old boy". Since over half of people don't pay their balances in full, they are spending A LOT more than 15% with plastic. Take 10 people with only 1 of them spending 100% more with plastic and the rest spending the same, and you'll get "people spend 10% more on average". Since over half of people are likely to significantly overspend with plastic, the fact that the average comes out to only about 15% more shows that most of those who pay their balances in full don't spend more. Show me a single study that only looked at some 38 percent of Americans that pay their balances in full.

" However, recently we started paying cash and our savings is going up."
This is purely anekdotal information. Different people are different. I know that when I travel to cash-only countries I spend more because I view cash as already spent. Even in Europe cash taken out of an ATM tends to disappear much quicker. I grew up in a cash-only country and a lot of people there lived paycheck-to-paycheck.

[Ryan]

Just be careful with expecting anything out of American Home Morgage in the long run since they just filed for bankruptcy.

[Matt]

I saw on creditboards.com that some people had tried the mortgage program, and their loan was sold to another company very quickly who did not accept the credit card payments. Just an FYI.

[Chase]

Discover also has a clause in their contracts that allows them to use the NAF (national arbitration forum) in which is paid by discover and discover is paid for using them, therefore siding with Discover in 99.999 of the cases. Now the catch is the arbitration process is a violation of your constitutional rights to due process ( trial by jury ). The arbitration can not be allowed if you do not agree to the suit. Both parties must have an EQUAL amount to lose, where they start with a winning hand.