American Express Blue Cash vs Chase Freedom Card

March 11, 2011

American Express Blue Cash is a popular card among people who want to earn cash back on their purchases; it’s one of our favorite cards, we use the Amex Blue Cash for most things we buy. The Chase Freedom card is another one of the best cash back cards because it gives you higher rewards on your top spending categories for the month. So if they’re both so good, how do you decide which to sign up for?

Card Fees and Bonuses

The main purpose of both cards is to earn cash back on your purchases.  Neither the Freedom or the Blue Cash Everyday has an annual fee, which is good since you get to keep more of the cash back that you earn.  There is a Blue Cash Preferred card that charges a fee but in return you earn higher cash back rates at supermarkets and gas.

Both the Blue Cash and Chase Freedom have offered signup bonuses in the past – with the Freedom card historically having higher bonuses.  For example, the Blue cash sometimes offers $25 to new customers, which is paid as a statement credit.  The Freedom card has offered $50 and even $100 as a bonus to new members, their come in the form of rewards points.  You can use the points as part of the Ultimate Rewards program or redeem them for cash.

Most rewards cards won’t pay you the rewards you earn during a period in which you don’t pay your bill.  This is the case with both of these cards, if you’re in default on your payment then you aren’t credited your cash back for any money spent during that billing cycle.

Earning Cash Back

Both the Blue Cash and Chase Freedom can earn you cash back on your purchases but they go about it in diffrent ways. 

Chase Freedom

The Freedom card pays 1% cash back on all purchases, then has certain bonus categories that can earn you an additional 4%.  The categories rotate each quarter, here’s the cash back calendar for this year:

  • January – March : grocery stores and drug stores
  • April – June : home improvement, home furnishings, lawn and garden
  • July – September : gas, airlines, hotels
  • October – December : dining, department stores, movies, charities

So the nice thing about the Freedom card is that you can start earning 5% right away if your purchases fall into one of the bonus categories. The categories are typically based around the areas that people tend to spend the most in during those months.

One other thing to note is that the Freedom card does have a cap each quarter on the amount of spending that’s eligible for the 4% bonus.  You may not reach that cap, but if you do then the remainder of purchases go back to earning 1%.

Blue Cash

The Blue Cash also has a form of bonus categories that they call “Everyday Purchases” – grocery stores, department stores, and gas stations.  Unlike the Freedom card, these categories are the same all year round.

You earn 3% back at supermarkets and 2% on gas and in department stores – 1% back on everything else.  If you go with the Blue Cash Preferred, you earn 6% back at supermarkets and 3% on gas and in department stores.

Redeeming Cash Back

As I mentioned earlier, the Chase Freedom card earns you rewards points for your purchases.  You can either use them in the Ultimate Rewards program or you can convert the points to cash.  The conversion rate is 1 point equals $0.01 cash – so 10,000 points could be turned in for a $100 check.

With the Blue Cash card, your cash back is paid in the form of a statement credit.  It used to be that you could only redeem your cash back once a year but American Express has changed the rewards program so you can request the credit anytime you’ve accumulated $25 or more in cash back.

Card Programs

The Freedom card is eligible to participate in a program called Chase Blueprint that’s designed to help you pay off your balances and reduce the amount of interest you pay.  Of course, if you’re paying interest on your charges those will wipeout any cash back you earn so in that case the Freedom card may not be the best for you.  There is a card called Slate from Chase that’s designed to work inside the Blueprint program and focus on paying down your balance.

If you use the Blue Cash card, you’re eligible for the Blue Savings program.  It’s actually available for any of the cards in the “Blue” family, like Amex Blue, Blue Sky, and Blue Sky Preferred card.  The program gives you discounts on hotels, car rental, dining – anywhere from 5–20% off your purchases.

There are a few other perks you get with the Blue Cash, like a free credit score and report from Experian once a year.  They also feature occassional deals – for example they offered free iTunes songs for a while and 35% off of tax software through TurboTax.

Hopefully, this look at the two cards has helped compare the features and give you an idea which might work best for you.

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