Thinking about getting a credit card that gives you money back on your purchases? American Express offers some fantastic options, but the amount of cashback you get isn't a one-size-fits-all answer. It largely depends on which American Express card you choose and how you use it. Let's dive deep into understanding American Express cashback and how you can maximize your rewards!
Step 1: Discover Your Spending Habits
Before we even talk about specific cards, let's ask ourselves a crucial question: "Where do I spend most of my money?" Are you a grocery guru, always stocking up on fresh produce? Do you stream movies and music constantly? Are gas station fill-ups a regular occurrence? Or perhaps you're an avid traveler or a dining enthusiast?
Understanding your typical spending categories is the first and most vital step in determining which American Express card will give you the most cashback. Different cards offer higher reward rates in specific categories, and aligning your spending with these categories is key to maximizing your earnings.
Step 2: Explore American Express Cashback Cards
American Express primarily offers cashback through its Blue Cash line of credit cards. These cards are designed specifically for earning cashback on everyday purchases. Let's look at the most popular options:
Blue Cash Preferred® Card from American Express
This card is often considered the heavy hitter for cashback, especially for households with significant spending in certain areas.
Cashback Rates:
6% cashback at U.S. supermarkets (on up to $6,000 in purchases per year, then 1%)
6% cashback on select U.S. streaming subscriptions
3% cashback at U.S. gas stations ⛽
3% cashback on transit (taxis, rideshare, parking, tolls, trains, buses, etc.)
1% cashback on all other eligible purchases ️
Annual Fee: It comes with an annual fee (typically $95, but often waived for the first year). It's crucial to calculate if the cashback you expect to earn will offset this fee.
Best For: Families and individuals who spend a significant amount on groceries, streaming services, and gas. If your spending aligns with these categories, the 6% rate can add up quickly.
Blue Cash Everyday® Card from American Express
A no-annual-fee alternative, the Blue Cash Everyday card offers solid cashback rates without the recurring cost.
Cashback Rates:
3% cashback at U.S. supermarkets (on up to $6,000 in purchases per year, then 1%)
3% cashback at U.S. gas stations ⛽
3% cashback on U.S. online retail purchases
1% cashback on all other eligible purchases
Annual Fee: $0 annual fee
Best For: Individuals looking for a straightforward cashback card with no annual fee, especially if they spend a fair amount on groceries, gas, and online shopping.
Step 3: Understand How Cashback is Earned and Redeemed
It's not just about the percentages; it's also about how you get your cashback and what you can do with it.
Earning Cashback
Reward Dollars: American Express typically awards cashback in the form of "Reward Dollars." These aren't immediately cash in your bank account but accumulate in your Amex rewards balance.
Eligible Purchases: Cashback is earned on eligible purchases. This generally excludes things like fees, interest charges, balance transfers, cash advances, purchases of traveler's checks, purchases or reloading of prepaid cards, and gift cards. Always check the specific card's terms for exact exclusions.
Category Spending Caps: As seen with the Blue Cash Preferred and Everyday cards, some higher cashback categories have an annual spending cap. Once you hit that cap, the cashback rate for that category typically drops to 1%.
Redeeming Your Cashback
Statement Credit: This is the most common and often the most straightforward way to redeem cashback. Your Reward Dollars are applied as a credit to your credit card statement, effectively reducing your balance.
Amazon.com Checkout: American Express allows you to link your card to your Amazon.com account and use your Reward Dollars directly at checkout. The value is usually the same as a statement credit.
Gift Cards: You might be able to redeem your cashback for gift cards from various retailers. The value per Reward Dollar can sometimes vary here, so compare it to the statement credit option.
Travel: While not a primary cashback redemption, some Amex cards allow you to use your Reward Dollars for travel bookings through AmexTravel.com.
Direct Deposit (Less Common for Amex Cashback Cards): While some cashback cards from other issuers offer direct deposit to a bank account, it's less common for Amex's dedicated cashback cards. Their "Bread Cashback American Express Credit Card" (issued by Comenity Capital Bank) does offer direct deposit, but it's a different product from the core Amex Blue Cash cards.
Step 4: Maximize Your American Express Cashback
Getting the most out of your Amex cashback requires a bit of strategy.
Focus Your Spending
If you have a Blue Cash Preferred card, make sure your grocery and streaming spending goes on this card to hit that 6% rate. Consider doing your weekly grocery shopping at U.S. supermarkets that are categorized correctly by Amex.
For Blue Cash Everyday, leverage the online retail category for your e-commerce purchases.
Utilize Amex Offers
American Express frequently provides "Amex Offers" to cardmembers. These are targeted deals where you can get a statement credit or bonus points when you spend a certain amount at participating merchants.
Enrollment is key! You must add the offer to your card before making the purchase.
These offers can significantly boost your overall cashback or rewards, even on cards not primarily focused on cashback. Keep an eye on your Amex online account or the Amex app for new offers.
Complement with Other Cards
If your spending extends beyond the categories where your Amex cashback card excels (e.g., dining, travel, specific department stores), consider having other credit cards that offer higher rewards in those areas. This creates a diversified rewards strategy.
Pay Your Bill in Full
This is a golden rule for any rewards card. The interest charges you accrue if you carry a balance will quickly negate any cashback you earn. Always pay your statement balance in full and on time to ensure your cashback is truly free money.
Step 5: Consider the Annual Fee vs. Rewards
For cards with an annual fee, like the Blue Cash Preferred, it's vital to perform a simple calculation:
Estimate your annual spending in the bonus categories.
Calculate the estimated cashback you'd earn.
Subtract the annual fee from your estimated cashback.
If the net amount is positive and substantial, the card is likely a good fit. If it's minimal or negative, a no-annual-fee option like the Blue Cash Everyday might be more suitable for your spending habits.
Frequently Asked Questions (FAQs) About American Express Cashback
How to calculate my potential cashback with American Express?
To calculate your potential cashback, estimate your annual spending in each of the bonus categories (e.g., U.S. supermarkets, streaming, gas) and multiply it by the respective cashback percentage. Add these amounts together, and then add 1% of your remaining general spending. Subtract any annual fee.
How to redeem American Express cashback as a statement credit?
You can typically redeem your American Express cashback (Reward Dollars) as a statement credit by logging into your online Amex account or through the Amex mobile app and navigating to the "Rewards" or "Cashback" section. From there, you should see an option to apply your available Reward Dollars as a credit to your statement.
How to use American Express cashback at Amazon.com?
To use Amex cashback at Amazon.com, you need to link your eligible American Express card to your Amazon account. Once linked, at checkout, you'll see an option to pay with your available Reward Dollars.
How to maximize cashback on groceries with American Express?
To maximize cashback on groceries, use the Blue Cash Preferred Card for your U.S. supermarket purchases, as it offers a leading 6% cashback rate (up to the annual cap). Ensure you're shopping at merchants categorized as U.S. supermarkets by Amex.
How to get cashback on streaming services with American Express?
The Blue Cash Preferred Card offers 6% cashback on select U.S. streaming subscriptions. Make sure your streaming services are on the eligible list for this bonus category to maximize earnings.
How to avoid annual fees on American Express cashback cards?
The easiest way to avoid annual fees for cashback is to choose a card like the Blue Cash Everyday Card, which has a $0 annual fee. For cards with fees, you'd need to ensure your earned cashback consistently outweighs the annual fee.
How to track my American Express cashback earnings?
You can easily track your American Express cashback earnings by logging into your online account or using the Amex mobile app. Your rewards summary will show your accumulated Reward Dollars.
How to tell if a merchant qualifies for a bonus cashback category?
American Express assigns merchant category codes (MCCs) to businesses. While you can't always know a merchant's exact MCC beforehand, generally, large chain supermarkets, gas stations, and well-known streaming services will fall into their respective bonus categories. If unsure, you can check past transactions or contact Amex customer service.
How to combine American Express cashback with other rewards?
American Express cashback cards generally earn Reward Dollars directly. If you also have an American Express card that earns Membership Rewards points, these are separate programs and typically cannot be directly combined. However, you can use different cards for different spending categories to optimize overall rewards.
How to ensure my cashback doesn't expire?
American Express Reward Dollars typically do not expire as long as your account remains open and in good standing. Always refer to your specific card's terms and conditions for definitive information on reward expiration.
