My first Card Review: AMEX Blue Cash Credit Card
A few readers have asked me why there are so few bona-fide credit card reviews on this site. The simple reason is that I don’t think I’m qualified. Apart from a lack of formal training, what business do I have endorsing a product that I haven’t used myself? Having said that, yesterday I received my 20th (or so) review request so I’ve decided to finally relent and try a test review to see how it works out. My most frequent request was for a good cashback credit card, so that’s where I’m going to start.
First of all, I should launch off by saying there’s a right way and a wrong way to use a credit card.
The right way: Paying off your balance on time and in full every month.
The wrong way: Everything else.
Even with the most generous cashback card, if you use your credit card the wrong way, you’ll wind up behind – guaranteed. Heres the thing: Credit card companies are only able to offer all these great perks because most people use their card the wrong way. Carrying a revolving balance, paying bills late, exceeding your credit limit – all these things make card issuers (and cost us!) billions of dollars every year. If you can’t realistically commit to using your card(s) the right way, you really are better off trading them in for a debit card.
When shopping around for a cash-back credit card, keep the following in mind:
• Look for a card without an annual fee. A certain cashback card that shall remain nameless offers a moderately good 3% rebate on all purchases, but also comes with a $199 annual fee. This basically means you’ll need to spend $7000 on the card just to break even!
• Make sure the rebates apply to supermarkets, drugstores AND gas stations. With the price of oil hovering around $120 per barrel, paying full price for your gas is criminal.
• Don’t choose a card that puts your cashback bonus in jeopardy if you miss a payment or carry a revolving balance. Even the most responsible credit card users occasionally slip up. Don’t let your card punish you for it.
• Ensure your cashback amounts aren’t capped in any way. Banks don’t limit the potential number of fees they charge you, so why should you stand for a card that limits your potential rewards?
My Recommendation:
After careful consideration, I’m going with the American Express Blue Cash card. It meets all the requirements outlined above, and offers a 6 month 0% interest rate as well as a very enticing UNLIMITED 5% cash back on virtually all purchases, as long as you spend over $6500 per year on the card. Provided you’re disciplined enough to repay your card on time and in full every month, this is basically free money. According to my (very rough!) calculations, the average 4-person family could save upwards of $3500 a year with this card. That’s over $70 extra in spending money every week. Not too shabby!
In my opinion, the Blue Cash is best suited for people who:
• Spend over $6500 on their credit card every year. You’re only entitled to a very mediocre 1% rebate if you spend less than this, but as soon as you pass $6500, it jumps to 5%.
• Consistently pay their bills on time. Paying a bill late is a big no-no for any credit card. Not only will it severely damage your Fico score, but you’ll forfeit your introductory rate as well.
• Pay off their outstanding balance in full on a regular basis. What good is a 5% rebate if you’re getting hit with at least twice that much in interest charges?
• Don’t use their card for cash advances. Cash advances and credit cards don’t mix. Apart from the fact that you aren’t entitled to a rebate on them, cash advances attract NASTY fees and interest rates.
If this sounds like you, then I can honestly say it’s worth your while taking the time to apply for the American Express Blue Cash card. As always, do your own research before making any decisions, and take my review with a grain of salt – if you successfully apply for this card I get a commission. Above all, don’t forget that using ANY credit card the wrong way will land you in hot water eventually.
Related posts:
- Credit Card Review: Changes for Chase Freedom
- Credit Card Review: Chase Freedom
- Credit Card Review: The New Face of the Discover® More(SM) Card
- AMEX Gold Card Review
- Review: Costco True Earnings AMEX Card
Same here… I love my Blue Cash. Love those cash rewards :)
Uhm… what card do you use? Why? That would be most interesting to me – and probably to other readers.
Hi! Your comment about forfeiting the balance for the whole year just freaked me out, since 4 months ago I paid a bill just 2 days late! I wanted to clarify the Amex position on this so other people don’t freak out too.
If your payment is less than 30 days late, you’re assessed the usual fee but you do not forfeit any rebates.
If your payment is 30 days late, you forfeit the rebates you accrued during the month for which that payment is due.
If your payment is 60 days late or more you forfeit all your rebates.
This is still a bit of a tricky thing for them to do but not nearly as bad as “one day late and it all disappears” as I had worried when I read your blog post!
Hi Amuse, many thanks for this bit of info! But do keep in mind that even a payment that is a single day late will hurt your credit score, and may land you in hot water with your other cards too (i.e. ‘Universal Default’).
I utilize 3 cash back cards, that have no annual fee. These net me:
5% Gasoline
5% Airline
3% Restaurants & Fast Food
2% Supermarkets & Travel
2% Saturday & Sunday purchases, Everywhere
~ This allows me to get 2% on utilities, rent, cell phone, etc.
1.25% Everywhere else
The AMEX Blue is overrated. If you make 100K+ a year, it is a good option. If you are a working stiff making 40-50K a year, doing a little homework & using multiple cards is MUCH better…