BankAmericard Cash Rewards vs. Blue Cash Everyday: When Blue is Better

The Blue Cash Everyday® Card from American Express and the BankAmericard Cash Rewards™ credit card offer the same big draws: bonus rewards at grocery stores and gas stations, similar 0% APR periods and no annual fee. Which you should choose depends less on these features and more on where you bank.

Based only on rewards, the Blue Cash Everyday® Card from American Express is the better choice. But if you have a combined balance of at least $20,000 in Bank of America®, Merrill Lynch® or Merrill Edge® accounts, you’ll get better long-term rewards with the BankAmericard Cash Rewards™ credit card.

Rewards: Slight win for the Blue Cash Everyday® Card from American Express

The Blue Cash Everyday® Card from American Express is offering a bigger sign-up bonus for a limited time, and it pays a higher rewards rate at grocery stores and department stores. The BankAmericard Cash Rewards™ credit card is offering its regular sign-up bonus and pays a higher rewards rate at gas stations. Both cards get you 1% on all other purchases.

Let’s compare them side by side:

	BankAmericard Cash Rewards™ Credit Card	Blue Cash Everyday® Card from American Express
	Learn More	Learn More
Sign-up bonus	$100 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening	Special Offer - Get up to $300 back. Offer Ends 6/15/2016.
0% APR Promotion	0% Introductory APR on purchases for 12 billing cycles and 0% Intro APR for 12 billing cycles for balance transfers made in the first 60 days, and then the ongoing APR of 13.24% - 23.24% Variable APR	0% on Purchases for 12 months and 0% on Balance Transfers for 12 months, and then the ongoing APR of 13.24%-23.24% Variable
Gas rewards	3%	2%
Grocery rewards	2%	3%
Department store rewards	1%	2%
Spending caps	$1,500 quarterly spending cap on combined grocery and gas purchases. After that, you'll earn 1% on those categories.	$6,000 annual spending cap on grocery purchases. After that, you'll earn 1%.

This tips the scales in favor of the Blue Cash Everyday® Card from American Express for three reasons:

1. The Blue Cash Everyday® Card from American Express comes with a better sign-up bonus, for now. These cards’ regular sign-up bonuses are the same: $100. But for new cardholders who sign up through June 15, 2016, the Blue Cash Everyday® Card from American Express is also offering 10% back at wireless telephone providers though 2016, up to $200.
2. You’ll probably earn more rewards with the Blue Cash Everyday® Card from American Express. The Blue Cash Everyday® Card from American Express offers 3% cash back at grocery stores and 2% at gas stations; the BankAmericard Cash Rewards™ credit card offers the opposite: 3% on gas, 2% on groceries. It’s a small but important difference. The average American spends about 60% more on food at home than on gasoline, according to 2014 Bureau of Labor Statistics data, the most recent available figures as of this writing. Plus, the Blue Cash Everyday® Card from American Express offers 2% cash back at department stores.
3. The Blue Cash Everyday® Card from American Express has less-restrictive spending caps. After you’ve spent $6,000 at grocery stores in one year on the Blue Cash Everyday® Card from American Express, you’ll earn only 1% rewards at the supermarket. The card doesn’t place caps on other categories. For many people, that isn’t a problem; the average U.S. household spent much less on food at home in 2014. The BankAmericard Cash Rewards™ credit card is more limiting. It caps bonus rewards at $1,500 of quarterly spending at grocery stores and gas stations combined, less than what the average household spends in these two categories.

This isn’t a landslide victory for the Blue Cash Everyday® Card from American Express. Assuming average household spending and excluding the sign-up bonuses, you’d earn about $40 more per year in rewards with the Blue Cash Everyday® Card from American Express than with the BankAmericard Cash Rewards™ credit card.

But that’s if you don’t have a Bank of America® account. If you do bank there, you’ll get an automatic 10% bonus by redeeming your cash back rewards as a deposit into your account. In that case, the Blue Cash Everyday® Card from American Express comes out ahead by only $6 a year. And if you have more than $20,000 in combined balances with affiliated Bank of America® accounts, the BankAmericard Cash Rewards™ credit card may be the better bet.

» MORE: NerdWallet’s best cash back credit cards

Why the BankAmericard Cash Rewards™ Credit Card is better for some

The BankAmericard Cash Rewards™ credit card incentivizes loyalty, unlike the Blue Cash Everyday® Card from American Express. This makes it a better choice for a select group of people: those with more than $20,000 in combined balances at Bank of America®, Merrill Lynch® and Merrill Edge® who enroll in the Preferred Rewards program.

You’ll get a rewards bonus of:

• 25% if your combined balances are between $20,000 and $49,999. That makes the effective rewards rate 3.75% at gas stations and 2.5% at grocery stores.
• 50% if your combined balances are between $50,000 and $99,999. That makes the the effective rewards rate 4.5% at gas stations and 3% at grocery stores.
• 75% if your combined balances are more than $100,000. That makes the effective rewards rate 5.25% at gas stations and 3.5% at grocery stores.

NerdWallet used Bureau of Labor Statistics data on average household spending in 2014 for food at home, gasoline, apparel and all other expenses that could reasonably be charged to a credit card to estimate how much you could earn on the BankAmericard Cash Rewards™ credit card with these various loyalty bonuses, compared with the Blue Cash Everyday® Card from American Express:

The difference in earning power is striking. You’d earn more than $200 more on the BankAmericard Cash Rewards™ credit card, compared to the Blue Cash Everyday® Card from American Express, when making the same purchases. But that’s easier to say than do. Unless you’re saving for retirement with Merrill Lynch® and Merrill Edge® or keeping a down payment socked away in a Bank of America® savings account, you might not have enough money on hand to qualify for those big rewards.

Verdict

The Blue Cash Everyday® Card from American Express is better than the BankAmericard Cash Rewards™ credit card for most people — that is, those who don’t qualify for Bank of America®’s Preferred Rewards program. Its cash back system doesn’t depend on your loyalty to one bank, and you won’t have to maintain a certain savings or investment balance to boost your earnings.

But if you happen to qualify for the Preferred Rewards program and maintaining your balance isn’t an issue, go with the BankAmericard Cash Rewards™ credit card. You’ll earn much more in the long run.

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.

from NerdWallet
https://www.nerdwallet.com/blog/credit-cards/bankamericard-cash-rewards-vs-american-express-blue-cash-everyday/