The One Credit Card I Am Adding to My Wallet: The Year When Cashback Is King

By Robert McGarvey

The good news – sort of, in a big picture view – is that airlines are flying very full.  The bad news: awards tickets are just plain rare.  And when they are to be had, the prices I see are exorbitant. Awards tix are priced dynamically on the airlines I’d fly and that translates into charging what the market will bear and, when planes are full, we are talking Kodiak bears.

Remember, as far back as 2002, Joe Brancatelli labeled frequent flier awards as akin to “an unregulated lottery” where the rules (and redemption values!) are subject to change at the whims of the owners who of course are the carriers, not us.

What rubs our noses in this reality is the eagerness airlines have in bragging to Wall Street about how profitable their awards miles business is. For them, there is more profit in selling awards miles than in flying sheetmetal from point to point.

Don’t forget that reality.

Oh, there are people who will tell me my pessimism is off base, that there are great awards deals to be had. Maybe for those willing to spend many hours hunting for a bargain that generally involves multiple parties – booking via an airline I’ve never heard of but which belongs to an alliance where a carrier I will fly belongs and, shazaam, those machinations produce an acceptable flight on an acceptable carrier. That doubtless works for some. But I am too lazy.

Show me the money. Now.

That’s why, for me, the takeaway is that today is the era of cashback.  When more money flows into my pocket I get more choice. I also can quickly and easily make my own purchase decisions. 

Which brings me to the credit card that – unexpectedly – I added to my wallet in the closing days of 2022.

Poking around the Amex site the other day – killing a few minutes looking for more ways to snare bonus miles and discounts – I stumbled upon an offer for the Amex Blue card.

The what? Count me clueless but I had never heard of it.  But at a glance it got my interest: 6% cashback on groceries.

Hold on.  In Q1 the Discover card I use offers 5% cashback on groceries which is capped at $1500 in purchases, $75 in cashback. But that only is in Q1 and I exhaust it in the first six weeks.

I also use a Venmo credit card which gives me 3% cashback on my highest spending category which I have made groceries.

We spend maybe $15,000/year on groceries.  It’s a big part of our annual budget.  So, yes, I do like cashback on grub.

There are two Blue cards from Amex – Preferred and Everyday.  

Everyday is fee-free. There’s a path to getting $250 back on purchases in the first six months.  And it offers 3% cashback on groceries, online purchases, gas stations.  There’s 1% cashback on just about every other purchase. There’s also an $84 statement credit for a Disney streaming bundle (paid at $7/month).

I chose to pay $95 for the Blue Preferred. First year fee is waived.  There’s a straightforward $250 credit earned by $3000 in purchases in the first six months.

But what hooked me is the grocery cashback is 6%, capped at $6000 in purchases annually – $360.  So I use Discover to get the $75. Then fill in with Venmo the rest of the year.  

That puts an extra $180 in my pocket a year, just for doing a little card shuffle and carrying one extra card in my wallet. That works even for a lazy guy.

Plus, Blue Preferred will put more change in my pockets. There’s 6% cashback on select streaming services (I believe the only qualifying service I have is Netflix) and 3% cashback on commuting expenses (from gasoline to subways). There’s also 1% on just about everything else although I doubt I will use the card elsewhere.

There also are plenty of usual Amex perks that I already have with the Plat card – global assist hotline, rental car insurance, return protection, purchase protection. All good but I already have them so I count the value at zero.

You’re right – after paying the annual fee I will be just a handful of shekels ahead. But, hey, it’s a game and a win is a win.

Btw, I am not alone in liking Blue Preferred.

Aren’t there other good cashback cards? You bet. Here’s a credible roundup from NerdWallet – and do note that Blue Preferred makes the list.  But there are 10 more on the list.  Look and doubtless there’s a card that will win you and put more cash in your pocket. Just don’t forget: it’s all about you. Some are best for dining, others for commuting, some for “everyday spend,” and – if you are like me and want to optimize the grocery spend there’s Blue Preferred.

My advice: get the card that works best for your spending. But get a cashback card.  Playing the awards came is so 20th century.  

Cash is king in 2023.

All hail the king.