In this recent video I told you I was replacing my American Express gold card with the newer
blue cash preferred and while that was the right choice for me, today I want to do a
direct comparison of these two products to help you decide which is the best financial
tool for you.
(CHANNEL INTRO) Alright first of all let's talk about perhaps the most important comparison
and that is the cost.
The gold card comes in at $250 per year putting it on the upper end of intermediate credit
cards while the blue cash preferred card comes in at $95 per year with your first year's
annual fee being waived.
So just keep that in the back of your head as we work our way through these comparisons
and examples.
And I will clarify that we were talking about the blue cash preferred.
Not the blue cash every day, the everyday preferred or the regular everyday credit card.
Whoever named all these products ought to be fired but I just wanted to clarify that
we are comparing the blue cash preferred to the standard gold card and I have done recent
reviews on both of these products if you want to check those out which are linked to down
below the like button.
Alright so aside from the difference in price, the biggest difference between these two products
is that the blue cash preferred gives you cash back while the gold card gives you points.
What you do with those points is up to you and that's where things can get a little bit
confusing but for the sake of simplicity, let's assume for now that one point equates
to 1 cent meaning if you are earning one point per dollar on something then you're earning
the equivalent of 1% cash back.
I'm about to throw a lot at you so take it in as best you can and don't worry well break
it down in more detail later in the video.
With the gold card you're looking at four points per dollar or in our example the equivalent
of 4% cash back at all restaurants worldwide including takeout in delivery services.
You also earn the same four points per dollar on grocery store purchases at US supermarkets
on up to $25,000 in purchases each year.
The blue cash preferred card doesn't have any bonus category for dining specifically
so you're looking at just 1% cash back but on groceries you'll earn 6% cash back on up
to $6000 in purchases each year at US supermarkets.
The blue cash preferred card also gives you 6% back on select US streaming services while
the gold card has no equivalent for that so you'd again be looking at just one point per
dollar in that category for the gold card.
The blue cash preferred also gives you 3% cash back on transit which includes taxis,
ridesharing, parking, tolls, trains, buses, and more and that language is pulled directly
from the American Express website however it clearly does not say airplanes so I think
it's safe to assume that you're not going to earn 3% on air travel.
The reason I mention that is because the gold card is going to give you 3 points per dollar
on all flights booked directly with the airline or through the American Express travel website.
That's all the bonus categories for the gold cards so beyond that you're looking at just
one point per dollar on all other eligible purchases while the blue cash preferred is
also going to give you 3% cash back at us gas stations and then 1% on everything else.
That was a bit confusing jumping back and forth so in general, the blue cash preferred
gives you higher cash back with a lower annual spending threshold on grocery stores while
the gold card gives you a higher spending limit on grocery stores and significantly
higher rewards on dining.
However the blue cash preferred makes up some of that ground with the bonus earning on things
like streaming services and gas stations and we'll come back to directly comparing all
of these many options at the end of the video.
Now in terms of additional benefits both cards are fairly simple with the gold card offering
a $120 dining credits at select locations including Grubhub, cheesecake factory, Shake
Shack, and several others.
You also get a $120 Uber cash credits with the gold card which can be used towards Uber
eats or ridesharing and both of these credits are given to you as a $10 monthly credit so
you, unfortunately, can't go out and spend that whole credit at once.
The blue cash preferred on the other hand is going to give you an $84 Disney bundle
credit which includes Hulu, Disney plus, and ESPN plus as well as a $120 equinox credit
which is a fancy gym that most of us won’t use and just like the gold cards credits these
are given to you as $7.00 and $10 monthly credits respectively.
Beyond that both products come with the standard American Express benefits like send and split,
pay it plan it… which is a terrible buy now pay later feature that I would not recommend….
and of course the pretty decent customer service that American Express offers for all of their
members.
I will mention that on the travel side of things, while both products offer car rental
loss and damage insurance as well as the global assist hotline, the gold card is clearly more
travel-focused giving you access to the Amex hotel collection, no foreign transaction fees,
baggage insurance and obviously access to the American Express travel portal.
That's pretty much it as far as feature comparisons so what does that all mean for you and which
product is right for your financial situation?
Well from a macro viewpoint, the gold card is obviously designed more for travel although
I wouldn't say it's specifically a travel credit card because it doesn't give you things
like airport lounge access or anything like that.
But it does give you points and that's the first key to making the right decision for
you.
Credit card points are an entirely separate video and I'll leave some helpful resources
down below if you want to learn more but if you are going to get the gold card or any
other credit card that offers you points then my biggest recommendation to you is to learn
how to maximize the point value.
How far you want to go down that rabbit hole is entirely up to you but with minimal research
and effort on your part, you should be able to get two to three cents per point which
that alone changes this equation entirely because it takes your four points per dollar
at restaurants or 4% equivalent and changes it to 8 or 12% equivalent back on those categories
if you are getting two to three cents of value per point.
Again I don't want to get into the weeds too much on credit card points but as a general
rule of thumb if you travel at least three to five times per year then you'll likely
be able to utilize your gold card points in an effective way and cover travel expenses
that you would otherwise have to pay out of pocket and that coupled with the strategic
use of the two credits they offer could easily cover that $250 annual fee but it is going
to take some effort.
The blue cash preferred card on the other hand is way more simple and just gives you
cash back in the form of statement credits which as long as you are using this card responsibly
as if it is cash or a debit card that means that you're basically getting 6% off of supermarket
purchases 6% off of streaming purchases 3% off of gas and the list goes on.
You don't have to worry about point multipliers or transfer partners or any of that and if
that's you then you'd probably have a hard time justifying the gold card or any other
travel credit card for that matter.
That being said the one area where the blue cash preferred card definitely falls short
is dining.
There is no spending multiplier in that category and no dining-related credits so if you frequently
dine at restaurants then that doesn't mean the blue cash preferred is a bad option but
it does mean you might want to pair it with another card which brings me to my last point
which may make this choice even harder and that is that the blue cash preferred and gold
card actually make a decent combination.
Many people argue that the gold card and much more expensive platinum card are a great combination
but in my opinion, the blue cash preferred and gold card are much better and much more
affordable.
Having both would cost $345 per year which sounds like a lot but with that, you're getting
crazy cash back and point multipliers on groceries, streaming services, gas, restaurants, flights
and transits and really have all major spending categories covered.
Compare that to the gold and platinum card combination which would cost you nearly $1000
per year and there are really not that many additional benefits unless you were traveling
all the time.
In fact the blue cash preferred and gold card combination at $345 per year is actually a
better option than an entry-level travel product like the Capital One Venture X card at $395
per year and that's coming forms someone who also has the venture X.
Not trying to confuse you and give you more decisions to make but just something you might
want to consider however getting back to the purpose of today's video if you are new to
the credit card space or you don't give a crap about credit card points and redeeming
them properly then the blue cash preferred is definitely the better option.
However, if you're a novice traveler who's looking to take your credit card game to the
next level and has at least a high-level understanding of how credit card points work then the gold
card shouldn't be too difficult to justify especially if you're able to effectively use
those annual credits.
And if you want the ultimate 1 2 punch that covers all major categories then you can go
with the approach that I am personally using which is the combination of the blue cash
preferred and American Express gold card.
But as always that is just my opinion and I'd love to know what you think of these products
down in the comment section.
You can learn more about both using the links down below the like button and be sure to
check out this recent video on the American Express gold card or this recent video on
the blue cash preferred.
As always take it easy and I'll see you in the next one!