American Express 6% Cash Back Credit Card & 100 Reward Dollars
Finally, after months of rotating our grocery store purchases on various cards, and in my search for new cards to replace the 6 months of 5% cash back on the AARP card, I finally found a great cash back card: the new Blue Cash Preferred® Card from American Express that gives 6% cash back on groceries up to $6,000 in spending, (and other purchases with some creative planning).
I’ve always held onto my American Express Blue Cash card as my emergency cash back card, but it hasn’t made it into circulation recently with the rotating 5% quarterly cash rewards credit cards since you had to spend $6500 before earning 5% cash back on groceries.
You can now dig out your old American Express Blue Cash card and upgrade it to the Blue Cash Preferred® card.
In addition to the sign up bonus, American Express is adding a new benefit for holiday shopping, one year of Amazon Prime for unlimited Free Two-Day Shipping. As a fan of Amazon Prime, this is a nice added bonus!
How to Get Cash Back on Groceries & 100 Reward Dollars
If you already have an American Express Blue Cash card you can upgrade (but you won’t get the reward dollars). If not, you’ll need to apply for a new card, which qualifies for the 100 reward dollars:
- To Upgrade:
- Login to your American Express account and click on your Blue Cash card, below it is a box that says “upgrade now.” Follow the directions and accept the terms to upgrade.
- You’ll get a new upgraded American Express preferred card in the mail in a week, but the number won’t change, so you can keep using your old card while you wait.
- To Get a New Card with 100 Reward Dollars:
- If you don’t have a Blue Cash card to upgrade, you can open a new Blue Cash Preferred® Card from American Express.
- Spend $1000 within your first 3 months.
- Get your 100 Reward Dollars in 6-8 weeks.
How to Get Your Amazon Prime
- Sign up for a new membership with your card.
- Meet the spending requirements above in the same time period.
- Get one year of Amazon Prime.
American Express Preferred® Card
- Annual Fee: $75
- Cash Back Rewards – No Tiers:
- 6% cash back: US supermarkets up to $6,000 per year in purchases
- 3% cash back: US gas stations & select US dept stores
- 1% cash back: all other eligible purchases
Grocery Store Upgrade Calculations
If you use your Blue Cash card, you have to measure the upgrade benefit against the opportunity cost of giving up the 5% at drug stores and stand-alone gas stations once you clear the $6500 tier. Since we don’t buy much, if anything at drugstores, that’s easy for us. And since the Penfed card has 5% cash back on gas, I think we’re better off to upgrade this one (even with the annual fee) and delegate our grocery purchases to this card.
If I spend $5200 in groceries ($100 per week), my rewards are:
- Current Blue Cash card: $52 (1%)
- Blue Cash Everyday®: $156 (3%, up to $6,000 in spending)
- Upgraded Blue Cash Preferred® card: $237 (6% = $312- $75 annual fee)
No Annual Fee Card. If your purchases aren’t dominated by groceries (like ours are), it could be better off to go with the Blue Cash Everyday® Card from American Express with no annual fee, which earns 3% cash back at stand-alone supermarkets (up to $6,000 in spending), 2% cash back at stand-alone gas stations and department stores, and 1% cash back on all other eligible purchases.
Break Even Point. I’m not a big fan of annual fees, but in this case, new card members will cover the annual fee with the reward dollars. For those of us who are upgrading the break even point is spending $208.33 per month on groceries. If you spend more than that, your cash back from the Preferred card will beat the Everyday card after factoring in the annual fee. We spend at least $209 each month on groceries, so it’s an easy comparison for us.
Cash Back at Other Stores
Here’s where we get into some of the creative planning that I mentioned to extend our cash back past just grocery stores:
Cash Back on Gift Cards. You can stretch the cash back beyond just the grocery store by purchasing gift cards at the grocery store. Our grocery store sells gift cards to Amazon.com, restaurants, and many departments stores. Now you can extend the 6% cash back (up to $6,000 in spending) beyond grocery stores and to everywhere that you can buy a gift card for. I don’t know about you, but we buy so much at Amazon.com, that cash back at Amazon will really add up!
6% Cash Back for Everything Else (Less the costs of prepaid card activation fees) To extend it even further, you can buy Visa Prepaid Credit Cards at the grocery store. I haven’t made a lot of these purchases in a few years, but I’m hoping it will be a way to continue to pay our taxes with credit cards to earn cash back.
If you can buy Visa prepaid cards in $500 increments and get cash back, you can then turn the purchased VISA card into 6% off for all your other purchases (up to $6,000 in spending). Fees to activate the cards usually are $5-$6 each. If you assume $6 on each $500, you get the equivalent of 4.8% cash back on all other purchases.
Have you upgraded your American Express Blue Cash card for the cash back?
This is very impressive, especially that you can take advantage of the great rewards for the grocery store at somewhere else using the gift card!
Would you please explain a bit more about the visa prepaid card which you mentioned about at the last of the article? I just went to check the local supermarket but couldn’t find it. Instead, I found a $50 amex gift card which charges me $4.95 at purchase. 10% extra fee — no point to get it!
You might have to check a few grocery stores to find the $500 gift cards. You’re right, a $50 card isn’t going to work, but if you can find the $500 card, then the fee will be offset.
I checked last night and the biggest Visa gift card at the grocery store closest to my house is $100; some of the bigger stores have bigger denominations. I think the key is finding one of the larger grocery stores, or maybe one where people make large purchases instead of local smaller stores.
I’m going to keep my eyes out when we go on vacation and check in the bigger cities too, maybe we can pinpoint a pattern of what type of grocery stores have them, so people will know where to look.
I just went to upgrade. The numbers sound awesome. In the footnote on the 6% I read this “Eligible purchases do NOT include fees or interest charges, balance transfers, cash advances, purchases of American Express Travelers Cheques, purchases or reloading of American Express prepaid cards or purchases of other cash equivalents.”
Have you successfully received the 6% cashback on Gift Cards and Visa PrePaid cards at Grocery Stores? Since it says “cash equivalents” are not eligible for the cashback I’m just wondering if it’s only on AmEx prepaid cards or all gift cards and prepaid cards. Would love to know more about your experience.
I don’t think American Express has anyway to determine what you purchased at the grocery store. I bought some gift cards last night along with groceries, and the entire purchase went through as one charge. There was no classification of gift cards vs. groceries on the bill.
I just upgraded too, so I’m waiting to see if the 6% goes through on everything. However, I have purchased gift cards at grocery stores and drug stores before and always received the cash back, so I don’t think this will be any different.
I’m guessing American Express is excluding the purchase of the American Express prepaid cards that they sell online.
I’ll keep my eye on the charges, and I’ll try buying some gift cards without groceries to see if there’s any point where we won’t get the 6%…
Madison, I believe you are absolutely correct. Any purchase I make at a gas station, I believe, is credited as a gas purchase at the 5% on my current card (and after my $6,500 spend). Also, my propane purchase for home heat is listed as a gas distributor, and at the higher rate.
I love your tip to purchase prepaid credit cards at grocery store. Not only will that get the higher rebate rate, but where we live, there are a lot of stores and restaurants that don’t take Amex.
We were using our airline miles card for that which the benefit is much reduced. I would much rather have the cash back, and your tip means we can get the Amex cash back benefit at places that don’t accept Amex. Brilliant!
It looks like Walgreen’s should have them available..
Is Walgreen’s considered a drug store or a grocery store? Hmm..
Walgreens is not classified as a Grocery store by AmEx
Does American Express payout in Membership Reward points or straight cash?
I just got my first statement and since American Express reports cash back one statement behind, I’ll have to wait until my next statement to tell you for sure.
Now that I have my second statement, I redeemed my cash back.
The rewards were based in dollars that I could use to purchase gift cards or as cash back.
The cash back was available in multiples of $25 which was applied as a statement credit when I redeemed it.
I just tried to buy a $500 Visa GC at Safeway with my Blue Preferred CC, but the transaction wouldn’t go through. My cashier asked another cashier who said that Visa, Mastercard, and Amex prepaid cards have to be purchased with cash. Do you know of another grocery store that allows it?
Sadie, I had the same experience at the Safeway on Webster Street in San Francisco. They said that the pre-paid gift cards that allow you to name the amount of the card at the time of purchase must be paid for with cash. These are the Pre-Paid Visa cards that have a $5.95 one-time fee and you can name how much you want the card to be – between $20 – $500.
Madison, have you found any place where the large Visa pre-paid cards can be purchased with the AmEx?
So far, I’ve tried purchasing the Gift Cards such as Shell, Kohls, Target, Home Depot, etc and on my AmEx statement they are coded as groceries. It hasn’t been enough time yet for me to see if they did award the full 6% rebate for them.
Kelly & Sadie,
I have been buying the $500 Visa gift cards every time I buy groceries. Some of the cashiers don’t seem to know how to ring them up (since they need to input the amount), but I haven’t had anyone tell me I could only buy them with cash. I did have one cashier ask to see my ID.
I’m shopping at various Roundy’s stores (however I think it’s a Midwestern chain), so that doesn’t really help you in California.
I have read that the policies vary by store, by manager, and by cashier, so I would keep trying some others.
Anyone else shopping on the West Coast that can report which stores work?
So I was able to purchase the $500 Visa at Ralph’s in LA and I finally found a Safeway in the East Bay that let me buy the $500 Visa. Before I found the Safeway that worked I tried to buy the same $500 Visa at Lucky’s and they have a store policy that you must pay with cash or debit card.
Madison, can you confirm that you have already received the 6% cashback on the purchases where you bought the $500 Visa card at Grocery stores? I’ve only had this now for one statement cycle and in the last statement I did get 6% back on my purchases at Grocery stores but I did not make any purchases of gift cards during that cycle. I’m trying to arrange a very large payment with the $500 Visa cards. I need to make the large payment (with the Visa gift cards) on Oct 15th but my next statement doesn’t end until October 12th. Since it’s tough to find stores that let you buy the cards I want to give myself enough time to get all the cards I need, however, I feel like it’s a little risky to be sure I’ll get the cashback from American Express until I actually see the BlueCash gets credited on the purchases of Gift Cards I made at Grocery stores.
Glad you found the Safeway store that let you buy it!
I just got my second statement in the mail this week, and I can confirm that all $1,286 of my grocery store purchases from my first statement, which included my first 2 $500 gift cards, earned $77 reward dollars, all at 6%!
For the record, both of those purchases included gift cards and groceries in the same transaction.
When I login to my account online to check the recent activity, you can expand the store purchase for more information. When I do that, I see the purchase labeled like this – Category: Merchandise & Supplies – Groceries.
I think the purchase category depends more on the actual store than on what you purchase.
Good luck! Let us know how it turns out!
Where in the east bay?
Madison, Thank You, that is great news. Yeah, so far all my purchases at Grocery stores have the same category as you, even the one where I bought only a Gift Card in the transaction.
I don’t see any dates on these posts. Does this buying $500.00 visa gift cards still work ? 8/22/13