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I’ve been in the world of using, writing about, and watching rewards credit cards for a while now. Not forever, but long enough to have seen several new products launched, and several old products go away. It is common for a new product to get a flood of marketing to get it going, but I have never seen so much marketing go into cards that aren’t even out yet as I have for the Amex Everyday and Amex Everyday Preferred. I mean ads featuring Tina Fey running during the Oscars?! Sometimes good marketing can provide nice smoke and mirrors for a not-so-great product, but I don’t think this is the case here.
I truly think that these cards are awesome for normal people who want to get the most for the money they are spending everyday, especially if what they want in terms of rewards is travel. These cards are perfect for my parents, my mommy group friends, my cousins, my neighbors, and even me. I’m not totally normal when it comes to everyday spending and rewards cards, but I’m not terribly far off either. I like things simple, quick, easy, and rewarding…and I get the feeling a lot of you do as well.
Since marketing buzz only gets you so far, I wanted to do the numbers on how good these cards are for earning Membership Reward points. For this exercise I want to focus on the Everyday Preferred card that comes with the $95 annual fee instead of the Everyday card that carries no annual fee. If you are not yet familiar, note that the Everyday version does not carry an annual fee but still earns Membership Reward points that are fully transferable to hotel and airline partners. That is huge by itself.
Back to the Everyday Preferred card as I like its increased earning potential. In addition to the reported sign-up bonus of 15,000 Membership Reward points after spending $1,000 in the first three months, it will earn:
- Earn 3x Membership Rewards points at U.S. supermarkets, on up to $6,000 per year on purchases; 2x on US standalone gas stations; and 1x points on all other purchases. Terms and limitations apply.
- Use the Card to make 30 or more purchases in a billing period and earn 50% extra points on all those purchases less returns and credits.
That means that if your family spends an average of $500 per month at the grocery store ($6,000 per year) that you will earn 18,000 Membership Reward points annually just on groceries. If you make this card your “go to” card and use it 30 times per month, you will get a 50% bonus on all points earned bringing your yearly grocery total at an average of $500 per month to 27,000 Membership Reward points per year just for groceries.
As a comparison, with the American Express(R) Premier Rewards Gold Card $6,000 annually on groceries would get you 12,000 Membership Reward points at 2x (half as much). With the Blue Cash Preferred® Card from American Express, you would earn 6% cash back in the form of a statement credit on the first $6,000 annually on groceries for a total of $360. That isn’t bad at all, and might be a good compliment for those families who spend an average of $1000 each month on groceries, but I personally value 27,000 Membership Reward points over $360. As long as you get at least 1.33 cents per point in value from your Membership Reward points then 27,000 MR points is potentially worth more than $360.
Some quick internet searches revealed that many American families spend an average of $3,000 per year on gas (though obviously some spend virtually nothing thanks to public transportation, and some have to spend quite a bit more). If you went with that $3,000 number that breaks down to $250 per month. At $3,000 per year on gas you would earn 6,000 points per annually for that category at 2x on both the Everyday Preferred and the Premier Rewards Gold card. However, if you triggered the 50% monthly points bonus on the Everyday Preferred that total jumps to 9,000 points annually on gas. With the Blue Cash Preferred at 3%, $3,000 in a year comes to $90 back annually. Again, I would easily take 9,000 Membership Reward points over $90 statement credit since I certainly value my points more than one cent each.
All three of the cards talked about in this post (Amex Premier Reward Gold, Amex Everyday Preferred, and Amex Blue Cash Preferred) earn 1x on most non-bonused spending. However, the Everyday Preferred will give a 50% bonus if you trigger 30 transactions per month. That puts the Everyday Preferred ahead of both of those cards at 1.5 Membership Reward points per dollar, and frankly that is better than most other cards out there in terms of non-bonused spending. A caveat to this is if you are a bigger spender that puts $30,000 per year on your Amex Premier Rewards Gold card since that triggers a 15,000 point bonus and obviously changes the equation some. Of course, the Amex Premier Rewards Gold card carries a $175 annual fee, while the Everyday Preferred card comes with a $95 annual fee, and the Blue Cash Preferred has a $75 annual fee. Personally I have yet to put 30k per year on that card, so it is a non-factor for my family.
What Does All This Mean:
If you spend an average of $500 per month on groceries and $250 per month on gas, you will earn 24,000 points per year just in those categories on the Everyday Preferred card. However, if you use that card regularly and rack up 30 transactions a month (not that hard if your life is anything like mine coffee, dry cleaners, grocery store, lunch, and gas all before noon), then you will earn a 50% bonus resulting in 36,000 fully transferable Membership Reward points just on gas and grocery purchases each year. Everyday spending will only get you to almost free travel quickly if you are taking advantage of bonus categories, and the Everyday cards will provide a great additional tool to do just that.
I know I’m applying as soon as they come out, so to me they are pretty good. What do you think?
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