Evaluating the old Blue Cash $50K limit

The “Old” Blue Cash card from American Express has been the go-to 5X card since the 5X ThankYou deal went away.  It is referred to as the “old” Blue Cash card because it is no longer advertised, but it is still available for new applicants through an old application link.

The old Blue Cash card requires $6500 in spend each year before it becomes worthwhile.  For the first $6500 in spend, the card offers only 1% cash back on “Everyday” purchases (U.S. supermarkets, U.S. gas stations & select U.S. drugstores) and only half a percent cash back on other purchase.  Compared to pretty much any other rewards card, that’s awful (in my opinion). 

After that initial $6500 spend, though, the card offers 5% cash back on Everyday purchases and 1% cash back on everything else.  That’s hard to beat! 

Note: wait for your statement to close after meeting the $6500 spend requirement in order to get the next level of rewards.

Big grocery and drugstore spenders (you know who you are) were happily spending outrageous amounts of money on this card month after month until Amex dropped the hammer in October and started closing accounts (see “Amex shuts down “old” Blue Cash accounts).

Since then, many who still have their accounts open have been treading carefully.  In the meantime, as reported by Doctor of Credit, Amex has updated the card’s terms for new applicants (bolding is mine):

Up to 5% Cash Back at U.S. supermarkets, U.S. gas stations & select U.S. drugstores (Everyday Purchases). Up to 1% Cash Back on other purchases. For your first $6,500 in purchases in a reward year, you will receive 1% on Everyday Purchases, and 0.5% on other purchases. After your first $6,500 in purchases, you will receive 5% on Everyday Purchases up to $50,000 and 1% on other purchases.

Terms and limitations apply. Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.

I find it very interesting that Amex added a $50K spend limit to the 5% cash back category.  I had always assumed that the active application link was just an oversight and that Amex would shut it down as soon as the Eye of Sauron settled upon it.  Instead, they updated the application with new terms to stop their bleeding.

Doctor of Credit postulates that those who signed up for the card before this limit was in place should stay within the limit anyway in order to keep their accounts alive.  He writes:

If your existing Old Blue Cash hasn’t been cancelled, I’d recommend spending under $50,000 in those 5% categories per reward year as I imagine that is the trigger point for shut downs.

I agree.

How good is it now?

for simplicity, let’s say a cardholder spends exactly up to the $50K limit within the 5% cash back categories.  Their spend and rewards would be:

  • Initial $6500 spend at 1% cash back = $65
  • Next $50K spend at 5% cash back = $2500
  • Overall cash back rate: $2565 / $56,500 = 4.54%

4.54% cash back is still a staggeringly good rate, especially for useful categories such as drugstores and grocery stores.  Even if the cardholder spent over 1% on fees (such as gift card fees), they would still be way ahead of most other options.  Sure, you can no longer make a living off of this card, but you can make a healthy profit.

Some people interpret the $50K limit, though, as being inclusive of the first $6500 in spend.  So, to be safe, you could do the first $6500 in spend outside of the “everyday” categories.  In that case, you’ll earn only half a percent with that initial spend:

  • Initial $6500 spend at .5% cash back = $32.50
  • Next $50K spend at 5% cash back = $2500
  • Overall cash back rate: $2532.50 / $56,500 = 4.45%

Again, this leads to a pretty terrific rebate on a total of $56,500 of spend.

What do you think?  Are you sticking with the old Blue Cash or going on to better things?

Also read: Reflections on the Ongoing Saga of Amex Old Blue Cash by Doctor of Credit.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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  1. […] Evaluating the old Blue Cash $50K limit  –  Frequent Miler    Good info on the card some of you stil have (me too!). I left this commment: “I always thought my card reset on 12/31. I was alerted on Twitter that it is based on anniversary date, which was new to me. So I called Amex. It appears that there are versions of the card (based on when you applied) that reset in either one of these dates. Luckily, I confirmed my card resets on 12/31 so I need to make a visit to my local mall to get the $6.5k out of the way pronto! I made a note of the csr and date/time of the phone call just in case this issue comes up again. FWIW” […]

  2. […] Amex ‘Old Blue.’ I closed my SPG card so have a 4th credit card slot that I can put to this or an EveryDay card. Tough call. Will I maximize the Old Blue category bonuses or go the simple route to keep my Membership Rewards active with an EveryDay? Conveniently, FrequentMiler is asking the same question, see Evaluating the old Blue Cash $50k limit. […]

Comments

  1. I wonder, with the new Redbird card I just picked up on vacation, if a Redbird load at a Super Target is coded as a supermarket with this card? Anyone use it to load their Redbird? I don’t have this Amex, but might consider it in my next round of applications if this will work.

  2. I think your advise in general makes sense. However there are still people alive that have exceeded that threshold. So I wouldn’t say that is an automatic trigger to closure.

    • I thought it was always on the cardholder anniversary, but TravelBloggerBuzz says that for some people it resets on Jan 1. You may have to call and ask about your card if you don’t know for sure.

  3. I got this card about four months ago. I’m careful to stay under my credit limit each month, even though I pay it off earlier. This is just due to all the shutdowns. But this is a great way to offset fees from manufactured spending and I’m hoping in 2015 it will completely cover my costs.

    @Bob, I believe the $6500 reset is for the cardmember year, not the calendar year.

  4. Bob – It is based on your account anniversary date.

    Per the terms, “For your first $6,500 of eligible purchases in the 12 billing periods in a row beginning with the one that starts in the calendar month in which your Card account anniversary occurs (reward year).”

  5. Just FYI, you don’t need to wait until the statement closes when hitting the $6500 threshold. The new rate kicks in even mid-transaction. And the 12 months is cardholder anniversary, not calendar year.

  6. @Josh YMMV, best to try it and see if your store works. It likely doesn’t, but it’s worth trying to find out.

    I test loaded at Super Target in Baton Rouge and it did not code as grocery.

  7. I closed mine voluntary due to the shutdowns and not wanting to lose the relationship. I think they should have just put in this limit for old cardholders and not have done any shutdowns. I may go back in now that Amex seems to have settled on acceptable guidelines, and with a new card it hopefully would reset my history (even though I was right at the threshold anyway).

  8. American express shut me down.

    My advise to others is to skip the card. For starters the rewards are very limited in that you can only do 50,000 in a year. But the risks are high. For starters you have the sunk costs to get to the 5% level. But the worst part is that if they do close your account, you will lose the last 1-2 months of rewards. Until there is conclusive data that spending under 50K a year is safe, this card is high risk.

    One reason I would like to have the card though is as a backup card. I periodically have problems with another card while doing MS. It would be nice to have this in the wallet and swipe it through so as to not damage the relationship with the store I’m buying from.

    But again, I got shut down and lost a lot of rewards in the process (far less than some people). And since my rewards were taken away and I got 0% cashback for those purchases, I lost money that month because of all of the fees.

      • HI FM, I spent lot of time searching in saverocity forums but did not find the posts you mentioned about the Rewards. I lost a lot of my rewards due to closure. Would appreciate if you can please provide the link to that posts. ThankYou.

  9. I can’t stand all the speculation about shutdowns. The truth is this: we don’t know exactly why some people were shut down. There are obvious factors that could have contributed (total spend, credit limit, payments, etc…). But every time someone suggests a theory (the $50k above), there is someone out there to debunk it (me). I was well over $50k by October and I’m still alive. And there is absolutely no evidence that suggests that treading lightly or not using it at all will save you. Plenty of people got shut down in November that hadn’t been using it at all for the previous month. I’m sad for the people that got shut down, but we really just don’t know why certain people were targeted while others weren’t (obvious exception – people doing six figures per month).

    @David – suggesting that people do not get this card because you were shut down is ridiculous. I’m sorry you were shut down, but 5% on $50k is pretty great (the best?). If someone is into MS, this is an obvious (and perhaps first) card to get.

  10. Greg,

    If the $50K includes the first $6,500 your calculation is wrong:

    initial $6,500 @ 0.5% = $32.50
    next **$43,500** @ 5% = $2,175

    Overall cashback rate $2,207.50/$50K = 4.415%

    If you used everyday spend categories for the first $6,500, then you get $65 + $2,175 = $2,240/$50K = 4.48%

    • @John

      The $6.5K initial spend does not impact the $50K. So FM’s calculations are correct

      The terms from Amex say the following
      “For your first $6,500 in purchases in a reward year, you will receive 1% on Everyday Purchases, and 0.5% on other purchases. After your first $6,500 in purchases, you will receive 5% on Everyday Purchases up to $50,000 and 1% on other purchases.”

  11. I always thought my card reset on 12/31. I was alerted on Twitter that it is based on anniversary date, which was new to me. So I called Amex. It appears that there are versions of the card (based on when you applied) that reset in either one of these dates. Luckily, I confirmed my card resets on 12/31 so I need to make a visit to my local mall to get the $6.5k out of the way pronto! I made a note of the csr and date/time of the phone call just in case this issue comes up again.
    FWIW

  12. Re: the reset date, it is probably best to check the actual written Terms & Conditions that were part of the package of materials that came with the card, rather than rely on some Amex CSR, even if you got the CSR’s name. There are various Amex Blue Cash cards and a CSR could easily get the answer wrong for your Amex Old Blue Cash card. Relying on a CSR’s answer on the phone is unlikely to get you very far if a dispute arises with respect to a reset date. Just my 2 cents.

  13. Jonathan,
    I am not suggesting people stop using this card because I was shut down. I am suggesting most people stop using it because thousands of people were shut down and continue to be.

    Outside of the real threat of losing 2 months worth of rewards (so all the running around you did was actually costing you money) you also have the chance at damaging your relationship with Amex.

    I suppose for the person with a single bluebird that is easy to load, and wants to do 5000 a month, and knows no better options, this card may be worth the risk. But for anybody looking to do scale things, this card is the wrong choice.

  14. FM,

    You said the link for signup is still good. Can you post it as the one from your credit card signup page does not work. Thanks.

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