Credit Cards

[Revelate]

After a recent conversation with a friend of mine who claimed she spends 3-400/wk on groceries (3 teenagers, and coaches a U19 soccer team, and serves as the local gathering place for many her sons' friends hangout) I started realizing that 6% cashback on that *dwarfed* the Amex AF, so I'm not totally surprised that they cut it back.  

I vaguely remember my parents with between them, myself, and my slightly younger sister used to have 100-120/week on groceries, but how times have changed I guess.  6% of cal it 15K at the base of my friend's estimate, 900 bucks vs. what 75 AF?  Since virtually everyone I know makes at most two trips weekly to the grocery store (with many doing once a week) a total of 100 transactions I can't see covering the difference.  

Almost certainly Amex was losing too much money on the card I expect compared as people who can qualify for a BCP likely have other rewards cards to cover other segments of their spend without hitting the default category on whatever card they're using as their default.  FWIW I'm glad they simply capped it rather than airstriking the product altogether.

[DeadSpider]

I hope they come up with a spending meter to know when the CAP is hit so I'll stop using it.

[SevenNEW]

Just found out as well from my billing statement. Sad!

This is so cheap, I didn't expect it from Amex...

[creditnocash]

is this cap for the year or the month? (if its year that blows)

no offense but i couldnt spend 6k on groceries and gas in a month.

[CreditScholar]

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creditnocash wrote:

is this cap for the year or the month? (if its year that blows)

no offense but i couldnt spend 6k on groceries and gas in a month.

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It's per year, and it's not surprising. At 6% on groceries, they are clearly losing money on that end of things. There's no way they could make 6% off interchange fees.

The reason why they were able to offer 6% on groceries previously is because groceries is a self-limiting expense. There is only so much you can buy (and eat) in a given month. The same is true with gas in that there's only so much you can realistically drive in a month. Unless you have a business (in which case those expenses would be foreced to go into a business card) Amex knew there was a natural limit to the losses they'd take on BCP groceries. They'd then make up the difference in other ways such as other cards, annual fees, etc. This is in contrast to other areas like dining and travel, where spending can theoretically be unlimited.

With more people buying non-grocery items at grocery stores (like gift cards), they were circumventing this self-limiting structure that Amex had envisioned. Instead of taking a loss on only groceries, now they were taking that same loss on other spending categories such as department stores. The new $6,000 cap is designed to combat this.

[JonStur]

Was hoping the BCE would escape the $6,000 but I guess not...

[lanc]

You could look at your statements and be able to add up your grocery spend in less than 10 minutes since they say monthly how much you spend on groceries.  A meter would be great but you'd only have to look through a max of 11 statements to figure out the number.