Amex Blue Cash vs. Chase Freedom - Which One is Best?
Posted on By Jim at 24 January, 2008, 9:48 pmI have been noticing in my web server logs for a couple months now that quite a number of people have been searching for a head-to-head comparison of the Amex Blue Cash vs. Chase Freedom cards. As subscribers to my cash back tutorial already know, I consider these two credit cards to be the best ones available today.
Given the number of people searching for this kind of comparison, I thought it best to prepare a quick post to help people decide between the two. So if you’re one of those folks that stumbled onto this post through the search engines, welcome!
To help you determine which one is best for you, use this cash back credit card calculator. It will tell you which card will pay you the most annual cash back given your level of monthly spend. Just type in your monthly expense amounts into the calculator’s 15 spending categories, and it will give you your projected cash back amounts for each card.
If the calculator shows that your top card is the Chase Freedom, you’re all set… go with the Chase Freedom card. However, if your top card is the Amex Blue Cash, you’ll actually want to go with both cards. Reason being is that American Express is not accepted at all merchants. In cases where you can’t use the Blue Cash card, you’ll want a backup credit card so you don’t forfeit earning cash back on your transaction. In my experience, the Chase Freedom card is the best backup for the Blue Cash.
If you’re looking for other differences between the two cards than just their cash back earnings potential, let me know what you’re curious about in the comments section below. As I use both cards on a daily basis, chances are good I’ll be able to help out with your particular question. Also be sure to check out the Related Posts section below for more detailed info on each card.
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Does your calculator take into account the $600 cap on the chase Freedom Visa card?
You bet. It sure does.
Actually…. Master Card and VISA are not accepted everywhere either. We do lots of shopping at Costco and you must pay with American Express, debit card, cash or check.
It would be great if your calculator had a place to include “American Express merchants” or something like that so those purchases could be excluded from the Master Card cash back calculations.
Just as an example from 5/2007 to 4/2008 I spent $7183 on my CITI Dividend MC (2% on grocers, drug stores, & utilities) and $4646 on my AMEX Costco Rewards card (3% back on gas and dining). Most of that $4646 was spent at Costco.
Hi James and welcome!
That’s awesome that you do a lot of shopping at Costco… the Amex card is a perfect fit for your pattern of spend.
As you point out, no card is universally accepted. Until recently at Sam’s Club, they used to accept just Discover as the only third-party credit card. Now Sam’s accepts MasterCard, but still not Visa or American Express. This is possible because Costco and Sam’s negotiated special deals with certain credit card companies for favorable fees for their transactions. Without the special partnership deals, the discount clubs don’t have enough profit margin to play with to make it worth their while to accept the standard interchange rates of the other card brands.
Outside of their Costco partnership, American Express has a higher interchange fee rate than either MasterCard, Visa or Discover. Because of this, American Express is generally not accepted in as many places as the others because some merchants simply refuse to pay the interchange fees Amex wants (and aren’t big enough to negotiate lower rates from Amex). For example, my Blue Cash card pays 5% on groceries. Unfortunately two of the three major grocery store chains in my area don’t accept Amex. Some of my household bills (such as my cable, internet and phone service) don’t accept Amex either. So although there are definitely exceptions, Amex in general has a lower acceptance rate than the other card brands across a broad spectrum of merchants.
Thanks for the idea about the American Express merchants. I would love for there to be a way for the calculator to show the effects of using two cards simultaneously (pick any two). I just haven’t figured out the best way to introduce that level of sophistication yet and still maintain the intuitiveness and ease-of-use for single card analyses.
Great post jim but still having a hard time making up my mind. A friend of mind told me about the chase freedom card and i was sold but i was wondering if having a american express on my credit report would make it look better. I am only 20 but have very good credit already. My dad thinks that an amex looks alittle better than a chase card but not sure if that really matters, i think that the chase would probably give me more cash back as i dont spend 6500 a year to get the 5% from the Amex any help would be appricitated thanks!
Hi Chris - I am not aware of having a particular creditor on your report can influence your FICO score one way or the other.
I agree, with less than $6,500 in annual spend, the Freedom card will be much better for you.
looking at both. if looking for a 0% APR for 12 months does the chase offer that??
Ak W - Not sure if you’re asking about 0% on balance transfers or purchases. The Freedom Cash does not have a 0% APR option, however the Chase Platinum Visa card covers both for 12 months. The balance transfer option has an up-front fee of 3% of the transfer amount (minimum of $5, maximum of $99).
Naturally I wouldn’t use the Chase Platinum Visa card for purchases, however it could make sense to park an existing balance there depending on what the dollar amount and interest rate is on the other card.
Great site.
Ive been using just a plain discover card for years thinking I was ’smart’. I now have both the Amex Blue and the Chase Visa in my wallet. We average around $3K / month on the Amex so we will hit the 5% rebate any day.
Any idea if life insurance companies accept cards?
Great article, but one quick question regarding the calculator. Does it take into account the bonus cash for Freedom if you redeem at the $200 level ($250)? That adds 25% to your earnings on the Freedom, which changes the picture drastically. Also, have you considered adding the Chase Freedom Plus? For a $30 annual fee, you get no $600 limit, and 6 bonus categories per month.
Hi Jay - the calculator used to take the $50 bonus into account until a just few days ago. Chase has since changed the terms of how the Freedom card works, which no longer includes the $50 bonus for new card holders.
I have been experimenting with the Freedom Plus card the past few months. It is a very good card. I have a question in to Chase as to the fate of the Freedom Plus card given the changes to the “standard” Freedom card.