Amex BCE vs. Discover More vs. Chase Freedom

[ssmith891]

All 3! 

[espnjunkie]

I didn't think BCE/BCP had rewards category caps on them?

[bs1234]

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@espnjunkie wrote:

I didn't think BCE/BCP had rewards category caps on them?Spell Check

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New since Oct. Beginning in Jan, or on the anniversary date, grocery cap is $6000 (so $180 for BCE, $360 for BCP) per year.

[espnjunkie]

That's pretty lame that they started capping it. This will never happen, but if they are going to reduce a card's benefits they should compensate customers by also reducing the annual fee a bit. Unlimited 6% on groceries was great for family grocery purchases.

[bs1234]

Yes, a little too good for their profits apparently!   But good marketing, I'm sure they brought in a lot of people with that amazing rate, and, at least this year, I've benefitted a lot but now it doesn't look so good.  

With some non-AF cards,  you can get unlimited 3% on groceries, which means the gain from having Amex is down to .06* $6000 (Amex rebate) - (0.03)*$6000 (other card) - $75 (annual fee) which is $105 (and actually probably a tiny bit less as you probably won't hit exactly $6000, and so will only get 1% on that last little bit that takes you passed $6000).  So, given the current state, not sure I would apply if I didn't have it.

[espnjunkie]

While I currently am not spending 6,000.00 per year on groceries, I am considering downgrading to the annual fee free BCE version. The main selling point on BCP for me was unlimited 6% cash back on groceries. That could justofy the 75.00 annual fee, but now that it is capped I don't see how BCP is worth an extra 75.00 over a free BCE?

[bs6054]

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@espnjunkie wrote:

While I currently am not spending 6,000.00 per year on groceries, I am considering downgrading to the annual fee free BCE version. The main selling point on BCP for me was unlimited 6% cash back on groceries. That could justofy the 75.00 annual fee, but now that it is capped I don't see how BCP is worth an extra 75.00 over a free BCE?

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Well, some simple math: on groceries, BCP gives you three percent more.  When is 3% more than 75?  At $2500.  If you spend that per year on groceries, BCE would give you $75 cash back, BCP would give you $150, which minus the annual fee, = $75.

Only complication is if you use the card for gas and department stores as well.   In those cases, BCP gives you an additional one % over BCE, reducing the need to spend $2500 on groceries.   So the real formula is GrocerySpend*0.03 + (Gas and Dept Spend)*.01.   If that exceeds 75, BCP is better, otherwise BCE.

[bs6054]

Above is for grocery spend up to $6000 of course!