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With Costco's transition from American Express to Visa, a lot of people are thinking about getting a new AmEx to replace their old True Earnings cards. So we thought now was the time to compare the American Express Blue Cash Preferred vs Costco Anywhere Visa by Citi.
The Blue Cash Preferred card is one of American Express’s most popular card - and constantly one of the top ranked credit cards in our Guide to Cash Back Credit Cards. It is often recommended for parents because of the cash back on gasoline and department stores. This card would help out on those back-to-school shopping trips and chauffeuring the little ones around. And, if you spend more than $2,500/year at stand alone grocery stores, you earn back the $95 annual fee when compared to the Blue Cash Everyday card.
Interested in seeing how other top cash rewards cards (including the no-fee Blue Cash Everyday card, compare against the new Costco Anywhere Visa? Read our Comparison of Four Popular Rewards Card That Save You Money on Common Household Expenses.
A Quick Comparison
Both the Blue Cash Preferred and the Costco Anywhere Visa are what is called "bonus category cash rewards cards". This just means you earn a standard 1% back on all purchases, but some purchases (such as gasoline) will qualify for additional cash back.
It also means that there aren’t any rotating categories that you have to remember to opt into every few months.
Card Benefits: Blue Cash Preferred vs Anywhere Visa
Let's start by taking a quick look at the benefits that each card has to offer. Then we will turn to see how a typical family will fare using just one of these cards.
American Express Blue Cash Preferred® Overview
Annual Fee: $75
Credit Required: Excellent
Rewards Program and Signup Bonuses*:
- $150 cash bonus after spending $1,000 in first 3 months
- Special Offer - Earn 5% cash back on eligible travel purchases in the first 6 months, up to $200.
- 6% Cash Back at Grocery Stores (on up to $6,000, then 1%)
- 3% Unlimited Cash Back on Gas and at Department Stores
- 1% Cash Back on Other Purchases
- Intro 0% APR for 15 Months on Purchases and Balance Transfers*
0% for 12 Months on Purchases
Intro Balance Transfer
0% for 12 Months + 3% BT Fee
13.24% - 23.24% Variable
Costco Anywhere Visa Card by Citi Overview
Annual Fee: $0 (covered by Costco Membership Fee)
Rewards Program and Signup Bonuses*:
- 4% cash back on gas for the first $7,000 per year, and then 1% thereafter (at Costco and standalone gas stations)
- 3% cash back on restaurants and travel
- 2% cash back on all other purchases from Costco and Costco.com
- 1% cash back on all other purchases
- Rewards from your True Earnings card transferred automatically to your new card
Intro Balance Transfer
Before moving on, I just want to highlight some key features and differences between the Anywhere Visa and Blue Cash Preferred:
- Annual Fee: Technically, the Costco card does not have an annual fee - but this card is only good as long as you maintain your $55 annual Costco membership.
- Sign-Up Offer: The Blue Cash Preferred offers both a signup bonus offer and a balance transfer offer.
- Rewards Delivery. The Blue Cash Preferred cash rewards are delivered as earned, and can be taken as a statement credit or sent to you. The Costco rewards accumulate annually and are then mailed to you one a year (in February) as a coupon redeemable at a Costco Warehouse - though you can redeem for cash, and not just for Costco products.
- Exclusions. For both cards, bonus categories do not apply to shopping at super-centers (like Target and Walmart), gas stations attached to grocery stores, and other limitations. So before you start spending, make sure to read our detailed reviews to find out about all the key details hidden in the fine print.
Since we want to compare the benefits of the cards every year, not just in the first year, we decided the following:
- We will take into account the annual fee for the Amex, but not the Costco card.
- We will not take into account the sign up offers available with the Blue Cash Preferred card.
The Spending Showdown!
We are finally getting to the part you are all waiting for. We are going to compare how much cash back you get from your card, if you spend like a typical US household. And for these purposes, the typical US household charges the following to their credit cards annually:
- Gasoline: $2,000/year
- Groceries: $3,970/year
- Restaurants and Travel: $2,780/year
- Clothing: $1,700/year
- Other Spending: $5,000/year
After entering the data into a spreadsheet, I came up with the following:
Blue Cash Preferred
- Gas: $60
- Groceries: $238.20
- Dining & Travel: $28
- Clothing: $51
- Other: $50
- Annual Fee: -$95
Total Cash Back
Costco Anywhere Visa
- Gas: $80
- Groceries: $79 (assuming you only shop at Costco)
- Dining & Travel: $83.50
- Clothing: $34 (assuming you only shop at Costco)
- Other: $50
Total Cash Back:
Since most people spend more per year on their grocery bill than on gasoline, the Blue Cash Preferred card is really able to shine in our showdown - even with the limitation we placed upon it. (Namely, not counting the Costco fee or the possibility of earning a signup bonus from the American Express card.)
Of course, if you are single, and still dine out and travel a lot, you may want to stick just with the Costco Anywhere Visa.
Whichever card you do choose, make sure you read all of the fine print. Know all of the rules that pertain to your card. You may even want to call American Express or Citibank to find out which of your favorite stores fit into each category. For example, some Walmarts have supermarkets in them, but they are usually not classified as supermarkets for credit card rewards. Credit card companies do this in order to save money and keep from paying out more rewards than necessary.
Credit cards are known for their tricks that confuse customers into thinking they’re getting better deals than they are. Thankfully, these two cards are more straightforward than most, so whichever one you get, what you see is pretty much what you get.
The Bottom Line
These two cards are closely matched. If your family budget seems to lean towards spending on groceries, gas and clothing, then the Blue Cash Preferred will be the better option. If you have to get one card, and you do shop at Costco and spend a lot on gas, restaurants, and travel, then the Costco card is likely your better option.
Personally, I would go for both cards! If you are a Costco member, the Anywhere Visa is a no-brainer. And you probably will want to have an American Express just to take advantage of their unrivaled consumer protection benefits and customer service.
Plus, if you combined only the best of both cards, your cash back rewards for the year would have totaled $427.50!
This way you can max out your cash back rewards. And save time by not needing to pull out your bank and/or credit card statements and calculate what you would save with each one.
Want to further maximize the value of your spending? Add a flat rate cash back card, like the new Chase Freedom Unlimited or the Citi Double Cash card, to get bigger returns out of the "Everything Else" category.
Want to Earn Even More Cash Back?
We did all the work ranking the top cash back rewards cards so you can start saving today. Check it out and find the best card (or cards) for your wallet.