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Many of my friends have been asking me which American Express credit card they should sign up for. The answer really isn’t that simple because it depends on how you will use the card you sign up for. For instance, if you travel frequently, an airline or hotel credit card may be more suitable. If you do a lot of grocery shopping, a cash back rewards credit card may be more suitable. If you shop at Costco often, a Costco branded credit card may make more sense. But usually, when people ask me this question, they’re typically looking for a credit card with the best cash back rewards.

American Express offers two credit cards that provide excellent cash back rewards: Blue Cash Everyday® Card from American Express and Blue Cash Preferred® Card from American Express. Both of these cards are pretty much identical except the Preferred version has an annual fee and provides a deeper cash back rewards.

Blue Cash Everyday® Card from American Express

  • 3% cash back at US supermarkets, on up to $6,000 per year in purchases (then 1%)
  • 2% cash back at US gas stations and select US department stores
  • 1% cash back on other purchases. Terms and limitations apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • No annual fee
Blue Cash Preferred® Card from American Express
  • 6% cash back at US supermarkets, up to $6,000 per year in purchases (then 1%)
  • 3% cash back at US gas stations and 3% cash back at select US department stores
  • 1% cash back on other purchases. Terms and limitations apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
  • Annual fee of $75 per year
So which card is better? It all depends on how much you spend annually on these particular categories. Let’s assume you spend $500 a month on groceries and $500 a month on gas.
Annual Spend Everyday Preferred
Groceries $6,000 $180.00 $360.00
Gas $6,000 $120.00  $ 180.00
Fees  $          -  $  (75.00)
Total $12,000 $300 $465

So using the above metrics, even with an annual fee of $75 for the Blue Cash Preferred® Card from American Express card, you will end up receiving more cash back compared to the Blue Cash Everyday® Card from American Express card.

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