So you’ve heard about the Cash Back Card from American Express Blue Cash Preferred that gives you 6% cash back at Supermarkets, 3% for Gas and 1% on everything else. As any person would you probably got excited and started thinking about all of the wild things that you could do with the extra savings you will get from this bad boy. All of a sudden as you keep reading about the description of the card, you see it, the words every person fears: Annual fee of $75. What?! Whyyyy?? But hey, in life you can never get something for nothing. So instead of paying the annual fee you decide to go with the other version of the card American Express Blue Cash Everyday that has no annual fees but only offers 3% cash back at supermarkets, 2% at gas stations and 1% on everything else.

I get it, it’s a tough decision and most people might do the same and go with the no annual fees option.

But it’s really all about the numbers. Calculating your expenses can tell you which card will give you more cash back even with annual fees. Below you will find the calculations for three common scenarios: A single person, a couple and a family of four.

For this comparison we are assuming that you will be using this card only for fixed expenses such as groceries, gas and utilities. Utilities include things like electricity, cable, and Internet and phone subscriptions but in these calculations rent and car payment are not included.

Note: With the Preferred card there is a limit on the 6% cash back of $6000 annually. After that it drops to 1% which we put into consideration in the below comparison.

  Spending Savings with Amex Preferred
With annual fee $75
Savings with Amex Everyday
Single

$6K/year in Supermarkets ($500/Month)

$1200/year for Gas ($100/Month)

$6K/Year for Utilities

(6000*6%)= $360

(1200*3%)= 36

(6000*1%)= 60

Total Savings – ($75 annual fee) (360+36+60)-75 = $381

(6000*3%)= $180

(1200*2%)= $24

(6000*1%)=$60

Total Savings
180+24+60 = $264

Couple (2 Cars)

$7500K/year in Supermarkets ($750/Month)

$2400/year for Gas ($200/Month)

$6K/Year for Utilities

(6000*6%) + (1500*1%)=$375

(2400*3%) = $72

(6000*1%)= $60

Total savings $507 – $75 =$432

(7500*3%)= $225

(2400*2%)=$48

(6000*1%)=$60

Total savings = $333

Family of 4 (2 Cars)

$12K/year in Supermarkets ($1000/Month)

$2400/year for Gas ($200/Month)

$12K/Year for Utilities

(6000*6%) + (6000*1%)=$420

(2400*3%) = $72

(12000*1%)= $120

Total savings $612 – $75 =$537

(12000*3%)= $360

(2400*2%)=$48

(12000*1%)=$120

Total savings = $528

With that estimate table you can figure out which category you fall into and which card would put more cash back into your pocket.