Amex Blue Cash Gas Discount

I have been receiving many questions about the Gas Discount that you receive with the American Express Blue Cash card. I wanted to take some time to explain how it works since there are some things you need to think about.

This card gives you a cash rebate on everything that you buy. There are different cash back rates depending on where you shop. There is also a tiered rate depending on how much you spend.

Here is how it works. When your total spending with the card for the year is less than $6500 you get the following cash back rates:

Purchases at supermarkets, gas stations, and drug stores: 1%
All other purchases: 0.5%

Once you pass $6500 in spending the rates increase:

Purchases at supermarkets, gas stations, and drug stores: 5%
All other purchases: 1.5%

The question you need to ask yourself is do you think you will hit that $6500 spending early enough in the year so that you will start getting the 5% back on supermarkets, gas stations, and drug stores. The spending requirement is annual based on your anniversary date. So if you signed up for the card in May, you have until May 2009 to hit that $6500 to bump yourself up to the next rebate tier. In May 2009 your rebate is paid out and the spending requirement resets it self.

Once you get there it is pretty powerfull since if you use this when buying gas that is $4 / gallon you are only paying $3.80 / gallon. The rebate is added to your account and is paid out as a credit to your bill on your anniversary date.

I hope that this clears up some confusion as to how the rebate works. My wife and I use the Blue Cash card for all purchases that will take a credit card and even pay bills such as cell phone, cable, etc. This allows us to hit the $6500 spending threshold quickly and then we enjoy the 5% discount on gas, groceries and drug store purchases for the rest of the year.

If you are a big spender you might think about getting the Blue Cash card. Every little bit helps, especially since gas prices are out of control so a 5% Gas Discount is worth it.

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