Category Archives: creditarticles

If you are shopping for the ultimate cash back credit card that will give the highest cash back then you’ve definitely come across these two bad boys:Bank of America cash back rewards and the Blue cash everyday card from American Express.

Both cards have No Annual fee and will give you 0% APR for the first year. So how would you decide between both?

First note the main difference between both cards regarding the cash back in each category.

  Gas Groceries Everything Else
Bank of America cash back rewards

3%

2%

1%

Blue cash everyday card from American express.

2%

3%

1%

If you are deciding between both cards you need to consider one factor and one factor only, which card will give you more $$$ in your pocket.

Let’s take my monthly expenses for example and see how much I would be getting back if I used each card for the same expenses.

Things to keep in mind:

Those are our monthly expenses as a couple with two cars. Your expenses and family size could be different but this example should give you an idea of how much you could earn.

Monthly/Yearly expenses:

Gas —- $150/Month or $1800/Year
Groceries —- $700/Month or $8400/Year
Bills (Except Rent and Car payment) — $700/Month or $8400/Year

Let’s see how much I would be getting back if I used each card

Bank of America cash back rewards

3% on Gas = $1800*3% = $54

2% on Groceries = $8400*2% = $168

1% for everything else = $8400*1% = $84

Total = $54 + $168 +$84 = $306

Blue cash everyday card from American express.

2% on Gas = $1800*2% = $36

3% on Groceries = $8400*3% = $252

1% for everything else = $8400*1% = $84

Total = $36 + $252 + $84 = $372

So the winner is obviously the Blue cash everyday card from American express. However, here is something to know about the blue cash everyday card: Not all grocery stores qualify for 3% cash back! Big box stores like Walmart and Target don’t qualify while stores like Whole Foods, HEB and Safeway do qualify. On the flipside, with the Bank of America cash back rewards all stores qualify for 2% cash back.

For 3 years in a row I used the Cash back rewards card from Bank of America for all of my household expenses. These included gas, groceries and all bills (except for Rent and car payment). I like to use one card for all my fixed expenses so I can know if I am following the budget or not.

The cash back rewards card gives 3% cash back on Gas, 2% on Groceries and 1% on everything else. You can redeem your cash back at any time as long as it’s more than $25 and trust me that will not be an issue. You will see the cash back add up really quickly. Below is a table showing my household expenses that support two adults with two cars.

Gas 3% Groceries 2% Everything else (bills Except Rent and Car payment) 1%

Cost:$150/Month or $1800/year

3% cash back/year =$1800*3% = $54

Cost:$700/Month or $8400/Year

2% cash back/year =$8400*2% = $168

Cost:$700/Month or $8400/Year

1% cash back/year = $8400*1% = $84

Total Cash Back/ year = $54 + $168 + $68 =$306

But wait! This is not all of the money you can get back. If you have a checking account with Bank of America and decide to redeem the cash back into your checking account you get 10% on top of your cash back. So let’s say at the end of the year I want to redeem the $306 into my checking. I’ll be getting $306+ ($306*10%)= $336.6

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.