# Amex: Earn Up To $250 Back

In other posts I talked about ‘Amex Offers & Benefits’ section inside the online account. Usually we get offers for one extra point on purchases, 10% cash back or more, and even a set amount of cash back for certain purchases. I wrote a couple of days ago an American Express promotion here, but this promotion involves upgrading the card I have (Blue Cash Everyday) to the Blue Cash Preferred to earn $250 back.

The Blue Cash Everyday is a card without annual fee that gives 3% cash back at U.S. supermarkets (up to $6,000 per year in purchases), 2% at gas stations and select department stores and 1% on other purchases. You can see other cards I use if you clic here. Basically I use the Amex BCE at supermarkets and sometimes Discover or Chase Freedom for a quarter when they offer 5% back.

The Blue Cash Preferred is a card with annual fee of $95 that have the same categories but at 6%, 3% and 1%. I think this is the card with the highest % cash back at supermarkets. Sometimes Discover/Freedom have a quarter with 5% but this card have 6% all year long.

## The offer

- Spend $2,000 in purchases in your first 3 months
- Have to pay AF of $95
- Will get 6% cash back instead of 3%
- Earn $250 statement credit

## Let’s do some math

**How much do I need to use the card in a year to justify the $95 AF. **We have several options here: a) compare 6% vs 3% for the whole year, b) compare 6% vs 3% for 9 months and 6% vs 5% for 3 months or c) compare 6% vs 3% for 6 months and 6% vs 5% for 6 months. Usually Discover/Freedom grocery store quarter is the same, so for me the more likely scenario is b), but just for fun let’s do some calculations.

a) 6% vs 3%, this one is easy, the AF is $95 and the difference is 3%, so we take $95 and divide by 0.03, the result is $3,166.67. So we need to buy more than that to have a benefit. We need to pay at least $263.89 a month in supermarkets (they exclude Target and Wal-Mart), then use the extra cash back to pay for the annual fee.

b) 6% vs 3% for 9 months and 6% vs 5% for 3 months. Here we have 3% difference for 9 months and only 1% for 3 months (the 5% card doesn’t have AF). Here we multiply 3% * 9 months, then multiply 1% * 3 months, add the 2 results and divide by 12. Instead of 3% difference for the whole year, we have 2.5%. So $95 / 2.5% = $3,800. We need at least $316.67 each month to justify the AF.

c) 6% vs 3% for 6 months and 6% vs 5% for 6 months. Much like the previous point. Now the difference go down to 2%. We need to use the card for $4,750 a year or $395.84 a month to justify the AF.

**But how about the $250 bonus?** Well, thanks to the bonus, we don’t need to worry (much) about the AF at least for the first year. We have to worry about the $2,000 in 3 months. The math is like this: $250 bonus – $95 AF + cash back difference on $2,000 = final bonus in 3 months. For me it could be the “worst scenario” and the “best scenario”:

“Worst Scenario”: use the card for $2,000 at 1% when other card could give me up to 5%. The math will be like this: $250 – $95 – ($2,000 * 4%) = $75 extra in my pocket plus 9 months of 3% or 1% extra cash back in supermarkets.

“Best Scenario”: use the card for $2,000 at 6% at supermarkets (instead of 3%). The math will be like this: $250 – $95 + ($2,000 * 3%) = $215 extra in my pocket after 3 months.

I’m sure I’ll be between worst and best. My guess is between $150 and $180 after 3 months.

Other good things about this offer:

- you keep the same card number, useful when you have recurring payments
- there is no hard pull on your credit, so no change on your credit score
- you start getting 6% with your current card, then activate your new card and destroy the old

What do you think about the offer? Is my math ok?

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