Evaluating the old Blue Cash $50K limit

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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.

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