Blue Cash Everyday versus Blue Cash Preferred: Which is best for you?

 

Blue Cash Everyday versus Blue Cash Preferred

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy

The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of the offer.

If you spend a significant portion of your budget on grocery shopping (which applies to almost everyone, right?) the Blue Cash Everyday and Preferred cards should be on your radar.

The two cards are very similar – they both offer a high rate of cash back on gas and grocery purchases, but the Preferred version of the card offers even more cash back on gas purchases and double the cash back rate on grocery purchases, for a $95 fee.

If you’re leaning toward the Everyday version of the card because you don’t want to pay a $95 fee, we think you should give the Blue Cash Preferred card a second look. Our math shows that, if you spend at least $3,200 per year on groceries, the Blue Cash Preferred card is the best choice.

Read on to see why:

BLUE CASH EVERYDAY VERSUS BLUE CASH PREFERRED
  Blue Cash Everyday
Blue Cash Everyday
Blue Cash Preferred
Blue Cash Preferred
Rewards rate
  • 3% cash back U.S. supermarkets (up to $6,000 per year in purchases, then 1%)
  • 2% cash back gas stations and select department stores
  • 1% cash back general purchases
  • Terms apply
  • 6% cash back at U.S. supermarkets (up to $6,000 in purchases per year, then 1%)
  • 3% cash back at U.S. gas stations and select department stores
  • 1% cash back on general purchases
  • Terms apply
Sign-up bonus
  • $150 when you spend $1,000 in first 3 months
  • Terms apply
  • $200 when you spend $1,000 in first 3 months
  • Terms apply
Annual fee
$0 (See rates and fees) $95 (See rates and fees)
Estimated yearly rewards value ($1,325 monthly spend, including sign-up bonus) $310 $370
Pros
  • No rotating categories to enroll in
  • High rewards rate on groceries
  • No rotating categories to enroll in
  • Best rewards rate on groceries
Cons
  • $6,000 yearly limit on supermarket bonus
  • Lower rewards value than the Blue Cash Preferred card, even with the annual fee factored in
  • $6,000 yearly limit on supermarket bonus
  • High annual fee
Who should get this card?
  • Cardholders who don’t want to commit to an annual fee
  • Cardholders who spend at least $3,200/year on groceries
  • Cardholders who want an all-around great card for their everyday spending

The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of the offer.

Blue Cash Everyday overview

A great card for families – especially those with school-age kids – the Blue Cash Everyday card makes it easy to earn a substantial cash back on everyday expenses such as food, back-to-school-clothes and gas by offering 3 percent cash back on the first $6,000 spent at U.S. grocery stores, 2 percent cash back on purchases at U.S. gas stations and department stores and 1 percent cash back on everything else.

Upsides: The cash back rate on groceries is high for a card with no annual fee. You can earn a large amount of cash back with this card on your everyday spending, with no rotating categories to enroll in or keep track of.

Downsides: There’s a $6,000 cap on the grocery bonus. Also, if you want to earn the most cash back on your grocery spending, this is not the best card to do so – you can do better with the Blue Cash Preferred card.

Blue Cash Preferred overview

Similar to the Blue Cash Everyday card, the Blue Cash Preferred card offers generous rewards on everyday spending, but at an even higher rate. You earn 3 percent cash back rate on purchases from U.S. gas stations and department stores and an unparalleled 6 percent cash back rate on U.S. grocery store purchases. The card also comes with a $95 annual fee, but don’t let that deter you – if you’re searching for the ultimate grocery card, this is it.

Upsides: The card’s 6 percent cash back rate on groceries can’t be beat. You can earn $360 in cash back each year just by maxing out the grocery bonus. When you add on the rewards earnings on gas station and department store purchases, you can earn multiple times the cost of the annual fee just by using this card on all your purchases, with very little card maintenance required.

Downsides: There’s a $6,000 cap on the grocery bonus. Also, the $95 fee may be a significant barrier for those who are unsure about sticking with the card, or for cardholders on a limited budget.

Best for someone who spends more than $3,200/year on groceries: Blue Cash Preferred

If you’re assuming that a card with a $95 annual fee is only for high spenders, we suggest that you take a closer look at the numbers.

By our math, you only need to spend $3,200 per year on groceries – approximately $267 per month – to see the advantage of the Blue Cash Preferred card. Considering that the latest USDA report shows that the average family of two spends at least $365 per month on groceries, $267 is a reasonable grocery bill for most cardholders.

You can see from our table below why $3,200 is the magic number – at this level of spending, your cash back earnings minus the annual fee beat the cash back earnings on the Blue Cash Everyday card (and this isn’t even taking into account the Blue Cash Preferred card’s larger sign-up bonus):

Scenario: Spending $3,200 per year on groceries ($267 per month)
  Cash back earned Total minus annual fee
Blue Cash Everyday
Blue Cash Everyday
3% x $3,200 = $96 $96
Blue Cash Everyday
Blue Cash Preferred
6% x $3,200 = $192 $97

If you manage to max out the $6,000 spending limit on groceries (approximately $500 of spending on groceries per month), the Blue Cash Preferred card is a clear winner. Your cash back earnings per year, minus the $95 annual come to $265 – that’s $85 more per year than the earnings on the Blue Cash Everyday card.

Scenario: Maxing out the $6,000 purchase limit on groceries ($500 per month)
  Cash back earned Total minus annual fee
Blue Cash Everyday
Blue Cash Everyday
3% x $6,00 = $180 $180
Blue Cash Everyday
Blue Cash Preferred
6% x $6,000 = $360 $265

Bonus tip: If you truly want to max out your cash back earnings, you should consider pairing the Blue Cash Preferred card with other cards that offer higher bonus rates on other spending categories. For instance, the Chase Freedom Unlimited card offers a flat 1.5 percent cash back rate on every purchase.

If you use the Blue Cash Preferred card strictly for supermarket, gas station and department store purchases, and use the Chase Freedom Unlimited for the rest of your spending, you can earn more cash back than if you use the Blue Cash Preferred card exclusively.

By our estimates (see the table below), the average cardholder can earn around $351 in cash back per year (minus the Blue Cash card’s annual fee) by pairing the two cards.

This beats the estimated earnings for the Blue Cash Preferred alone ($304 per year). Note, if you are a higher-than-average spender in any of the card’s bonus categories, you can do even better than $351 per year with this strategy.

Scenario: Pairing the American Express Blue Cash Preferred with the Chase Freedom Unlimited ($15,900 yearly spend)
# Average rewards rate Cash back earned Total minus annual fee
  • 6% U.S. supermarkets (up to $6,000 in purchases)
  • 3% gas stations & department stores
  • 1.5% other purchases
2.8% $446 $351

Best for someone who puts most of their spending on one card: Blue Cash Preferred

That said, card juggling isn’t for everyone. If you prefer the convenience of placing all your purchases on one card, you can still do well with the Blue Cash Preferred card. The two tables below show the overall yearly earnings for the Blue Cash Everyday and Blue Cash Preferred cards.

We estimate that the average cardholder can earn $304 per year by using the Blue Cash Preferred card as their go-to card for every purchase – that’s $43 more per year than the Blue Cash Everyday card.

Estimated cash back for average cardholder who spends $15,900 per year
    Blue Cash Everyday
Blue Cash Everyday
Spend by category Category bonus Cash back earned Total minus annual fee

Groceries (23%) = $3,657
Gas (15%) = $2,385
Dept. stores (3%) = $477
Other spend (59%) = $9,381

3%
2%
2%
1%

$109.71
$47.70
$9.54
$93.81
$260.76
Grand total $260.76

 

Estimated cash back for average cardholder who spends $15,900 per year
    Blue Cash Preferred
Blue Cash Preferred
Spend by category Category bonus Cash back earned Total minus annual fee

Groceries (23%) = $3,657
Gas (15%) = $2,385
Dept. stores (3%) = $477
Other spend (59%) = $9,381

6%
3%
3%
1%

$219.42
$71.55
$14.31
$93.81
$304.09
Grand total $399.09

Best for non-committal cardholders and infrequent grocery shoppers: Blue Cash Everyday

Hopefully we’ve convinced you by now that the Blue Cash Preferred card is the superior card for everyday purchases. That said, there are situations where it doesn’t make sense to pay a $95 annual fee.

Perhaps you are on a limited budget and can’t afford to foot $95 up front, or perhaps you spend a lower-than-average amount on groceries. Also, if you are uncertain of using the card for all your grocery purchases (e.g., if you are chasing sign-up bonuses on other cards or if you are uncertain of what your long-term rewards card strategy is going to be), a $95 fee is a risky proposition.

In all these cases, the Blue Cash Preferred card is a great alternative. As you can see from our table in the previous section, the average cardholder can earn $261 cash back per year on all their spending with the Blue Cash Everyday card.

How do other grocery cards compare?

Our table below shows why the Blue Cash Everyday and Preferred cards are the ultimate grocery cards. The only other cards with a competitive grocery bonus are the American Express Everyday Preferred and American Express Blue Cash cards, both of which come with onerous requirements to earn the full bonus.

One major drawback to the Blue Cash Everyday and Preferred cards is their $6,000 limit on grocery purchases. If you spend a large amount on groceries, the Suntrust Cash Back card is a good alternative that doesn’t impose any limits on its grocery bonus. The PNC Cash Rewards card is another great option with a higher cap that also happens to offer 4 percent cash back at gas stations as well as 3 percent cash back on grocery purchases. For that matter, you might just go with a flat rate card such as the Citi Double Cash card, which offers 2 percent cash back on every purchase.

You could even consider switching to one of these cards once you’ve reached your limit with the Blue Cash cards.

COMPARING GROCERY REWARDS CARDS
  Credit card Grocery bonus Bonus limits Average annual value (includes sign-up bonus)
Blue Cash Everyday Blue Cash Everyday 3% $6,000 purchase limit per year $311
Blue Cash Everyday Blue Cash Preferred 6%
$6,000 purchase limit per year $370
American Express Everyday 2.4% Must use card 20+ times per billing cycle $268
American Express Everyday Preferred 4.5% Must use card 20+ times per billing cycle $339
American Express Blue Cash 5% Must spend $6,500 on the card first $257
BankAmericard Cash Rewards 2% $2,500 purchase limit per quarter $318
USAA Cashback Rewards Plus 2% $3,000 purchase limit per year $291
Suntrust Cash Back 2% No limits $242
PNC Cash Rewards 2% $8,000 purchase limit per year $344
Citi Double Cash 2% (on all purchases) No limit $318

See related: Chase Sapphire Preferred versus Chase Sapphire Reserve: Which is better for you?, Chase Freedom versus Chase Freedom Unlimited: Which is best for you?

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we do receive compensation when you click on links to products from our partners. Learn more about our advertising policy


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Updated: 11-20-2017