Should I Open the American Express Cash Preferred or Chase Reserve for 6 in Grocery Annual Fees?
Choosing between the American Express Cash Preferred and the Chase Reserve can be a complex decision, especially when it comes to the annual fees and cashback benefits they offer. This article will break down the advantages and disadvantages of each card, helping you make the best decision for your spending habits and travel needs.
Understanding the American Express Blue Cash Preferred Card
The American Express Blue Cash Preferred is a no-brainer choice for households that spend more than $3,000 annually on groceries. The best cash back credit card for general groceries offers a generous 3% cash back on up to $6,000 in annual groceries, effectively offsetting the $95 annual fee. Any spend above $3,000 up to $6,000 is rewarded with additional hard cash back.
Not only does the card offer excellent cash back on groceries, but it also includes a 250-sign up bonus. Streaming services like Netflix, Hulu, and others provide an additional 6% cash back with no limit. Additionally, the card offers 3% cash back on gas and transit purchases, with 1% cash back on all other purchases.
Chase Sapphire Reserve: A Valuable Complement to Blue Cash
The Chase Sapphire Reserve (CSR) card is an excellent choice, but the annual fee is much higher at $550. However, this card offers significant benefits, especially if you are an active traveler or frequent diner.
One of the key benefits of CSR is the 3% cash back on travel and dining. If you spend around $17,000 annually on travel and dining, you will recoup the full $550 annual fee through cash back and rebates. This means that every dollar spent over $17,000 will provide you with discounts on future travel purchases through the Chase Ultimate Rewards travel portal, which offers a 50% boost on cash back for travel purchases. This makes the 3% cash back rate on these categories effectively a 4.5% cash back rate, and the 1% cash back on other purchases becomes 1.5%.
Maximizing Value with Chase Sapphire Reserve
While the CSR card comes with a higher annual fee, its benefits can be maximized by strategically spending. For instance, you can use your earned cash back to purchase travel through the Chase Ultimate Rewards travel portal, where every dollar in cash back can be redeemed at the 50% boosted rate. This means that the 3% cash back rate on travel and dining effectively becomes a 4.5% rate, and the 1% cash back on other purchases becomes 1.5%.
Another benefit of the CSR card is the Priority Pass, which provides access to airport lounges, making long layovers more comfortable for frequent flyers. Additionally, the DashPass dining delivery subscription from DoorDash provides an annual credit of $60 and can save hundreds in delivery fees over the course of a year of frequent orders. The card also includes Lyft benefits, and comes with a handsome 50,000-point sign-up bonus, which can be redeemed for $500 in cash or $750 in travel via the Chase Ultimate Rewards travel portal.
Choosing Between the Two Cards
Given the high annual fee on the CSR card, it is crucial to ensure that you will meet the required spending to justify the fee. If you frequently travel, the CSR card can provide significant value due to its benefits in travel and dining. However, if you primarily spend on groceries and are not a frequent traveler, the American Express Cash Preferred card might be a better choice due to its lower annual fee and excellent cash back on groceries.
Ultimately, the decision depends on your spending habits. If you want a card that focuses primarily on grocery spending, the American Express Cash Preferred card is a solid choice. On the other hand, if you are an active traveler or frequent diner, the Chase Sapphire Reserve could be a more valuable option despite its higher annual fee.
In conclusion, both cards offer valuable benefits, but the American Express Cash Preferred is a no-brainer for households that spend over $3,000 annually on groceries, while the Chase Sapphire Reserve can be a valuable addition to your wallet if you meet the necessary spending in its bonus categories.