An Amex Cash Rebate Card & Amex Blue Cash FAQ and Strategy Thread (updated 11/24/08)

Okay, here's some math: assume you find a way to quickly spend $6,500 on "everything else," (coins, tuition, whatever). If you then used the card only for 5% Cash Back items, you'd need to spend another $3,250 that year to break even with a 2% card. After that point, you'd be coming out ahead on the AMEX Blue Cash. Of course, if you still used the card for "everything else" purchases, you might never break even.

Getting the 5% is entirely dependent on the merchant being coded as gas, grocery, or Drugstore, something which depends entirely on what the merchant said it was when it opened its merchant account. (So Comcast/Qwest
/Electric most definitely won't qualify.) I haven't double-checked my H-mart purchases, but I would certainly expect them to be coded as a grocery store; certainly Whole Foods and safeway are.

The AMEX blue cash is not worth it any more. I liked the old days when they included home improvement stores like Home Depot. That year I had over $900 in cash bake. Now I am getting just $550 for about the same purchase amount. I also disliked the reduction of the other purchases from 1.5% to 1.25%. Now I am getting different cards for gas (5%) restaurants (5%) and everything else (2%).

I'm guessing PenFed 5% gas, FIA Schwab/Fidelity 2% everything else, Citi Forward 5TYP (1 TYP is about 0.6% I think) for restaurants.

Can I buy AMEX Traveler's Check online to reach the $6500 requirement? I'm fine with that they don't earn 0.5% CashBack, but does it count towards the $6500 purchase? I need to figure out a way to reach $6500, any other good ideas (btw: I don't do coins). Thanks

sayhey said: To make the Blue Cash card worthwhile you need to be spending more than 20% on everyday items (gas, groceries, drugstores).

It sounds like you're thinking about it as a choice between using only the AMEX Blue Cash card and using only some other card. To maximize your rewards, you should use a combination of cards and be strategic about which card you use for each purchase based on your overall spending patterns.

For example, if you have another card that pays more than 1.25% (like the Fidelity AMEX or Schwab Visa cards), you should never use Blue Cash for non-everyday spending items once you cross the $6500 threshold. Once you cross that threshold, Blue Cash is giving you 1.25% Cash Back on non-everyday spending, but your other card is paying more than that. So, use the other card for non-everyday spending past $6500.

The analysis is more complicated before you reach $6500, because at that level you're only earning 1.0% Cash Back on everyday spending and 0.5% Cash Back on non-everyday spending, so you're losing money (relative to charging on your other card) on each purchase. If you're not going to spend $6500 over the course of the year, it never makes sense to use Blue Cash.

Generally, using Blue Cash only makes sense if you spend enough money in the everyday spending categories after passing the $6500 to make up for getting lower returns (relative to using another card) before passing the $6500. If you're carrying a Fidelity AMEX or Schwab Visa, this comparison is relatively easy. I just did a quick calculation and saw that, if every penny of your spending is in an everyday spending category, you have to spend a total of $8666.67 over the course of the year to beat simply using a Schwab Visa on all your purchases; if you do any non-everyday spending, you need to spend even more before it becomes worthwhile to use Blue Cash instead of Schwab. And again, either way, once you cross the $6500 spending on Blue Cash, you should always use the Schwab Visa for non-everyday spending.

It gets more complicated if you're carrying cards that pay different Cash Back for different spending categories or cards that give you additional Cash Back in rotating categories, since the 3 to 5% you might be getting on these cards could make using Blue Cash appear even less worthwhile. Last quarter, for example, the Chase Freedom Card was paying 5% Cash Back on categories including drug stores, which AMEX considers to be an everyday spending category. If you were still below $6500 on your Blue Cash spending, you would have gotten more Cash Back from the Freedom card than the Blue Cash card on drug store purchases, so again you would have had to figure out whether it made sense to charge on the Blue Cash (foregoing higher immediate Cash Back in return for moving towards the $6500 with the goal of spending enough above that threshold to offset the loss) or to simply make the charge on the Freedom card.

These are just some (long-winded) examples. The point is that you should look into other cards that can beat Blue Cash under certain conditions and decide, based on your overall spending patterns, which ones can be of use to you and how you can use them all together to maximize your total Cash Back.

Did anyone else get the letter from AMEX saying that in 2011 we will be able to cash in our rewards at $25 increments instead of having to wait for our anniversary date?

Glitch99 said: My AMEX Blue Cash seems to be rather arbitrary with the $6500 threshold. Last year only my first $4500 spending earned .5%, the rest earned 1.25%/5%. This year, the first $5,566 earned .5%, then the 1.25%/5% kicked in. Any clues as to why the discrepencies from the stated $6500?

Could it have something to do with your statement closing date and/or anniversary date? Maybe once you reach the $6500 threshold, you get the higher Cash Back starting with everything on that particular monthly statement, not just for the purchases you make after you reach the $6500. Just a guess on my part.

will buying gift cards at safeway fall under "groceries"?
if so safeway has quite a lot of gift cards to choose from - this can help maximize the 5%

http://www.safeway.com/ifl/Grocery/Gift-Cards

Is there a way to tell what rebate rate I am earning for a specific purchase? IE can I check my statement to confirm they are considered "everyday spending?"

I don't know if this is going to be their general policy, but I called a week ago before I saw the delay to March 15th and asked them to apply my reward cash to my credit balance. They told me that they couldn't apply it because my card balance had to be below the amount of the credit. If this is the case it makes it a pain to cash in the rebate. A the end of a billing cycle you have to pay off your balance right away and then monitor the balance of your card until you are just below the credit amount and call to have them credit you. Seems like a pain to me with some of the other 2% options out there. I've been with them for years, but if this is how they are going to work the credit, I'll probably get a 2% card and not have to deal with the hassle.

Not sure I understand. Where and how do you order $6,500 in coins with the AMEX Blue Cash Card?

Chgoman said:   I don't know if this is going to be their general policy, but I called a week ago before I saw the delay to March 15th and asked them to apply my reward cash to my credit balance. They told me that they couldn't apply it because my card balance had to be below the amount of the credit. If this is the case it makes it a pain to cash in the rebate. A the end of a billing cycle you have to pay off your balance right away and then monitor the balance of your card until you are just below the credit amount and call to have them credit you. Seems like a pain to me with some of the other 2% options out there. I've been with them for years, but if this is how they are going to work the credit, I'll probably get a 2% card and not have to deal with the hassle.FYI, they it apply the rewards credit regardless of the account balance. If the CashBack creates a credit balance, they'll send you a refund check for the credit balance.