The market for rewards credit cards has historically been dominated by cards that offer frequent flyer miles with one or more airlines. But for some people, those rewards have lost their value, especially since it has become extremely difficult to redeem miles for convenient flights. That’s one reason why cash back rewards cards, like the Blue Sky from American Express®, have grown in popularity. Let’s take a closer look at the features of these credit cards, and some of the advantages and disadvantages of each.
- Sign-Up Bonus. The Blue Sky provides 7,500 bonus points (redeemable for a $100 statement credit toward any airline ticket, hotel stay, car rental, or cruise) after spending $1,000 in the first three months.
- Earn Points for Spending. For every dollar spent, Blue Sky cardholders receive one reward point, which they can then redeem for cash back, a statement credit, travel reimbursement, or a variety of gift card options. The value of the points varies: Points redeemed for cash and gift cards are each worth $0.77 each, and points redeemed for statement credits for travel purchases are worth $1.33 each. Eligible travel expenses include airfare, hotels, rental cars, cruises, travel agencies, and trains.
- Extended Warranty. The American Express Blue Sky cards include extended warranties that protect eligible new purchases against accidental damage or theft for 90 days.
- Introductory APR. Both cards feature a 0% introductory APR for 15 months, on both purchases and balance transfers.
- Annual Fee. There is no annual fee for the Blue Sky card.
- Foreign Transaction Fees. Any purchase made outside the United States will incur a foreign transaction fee of 2.7%. People who travel internationally should consider credit cards without foreign transaction fees.
- Get Reimbursed for Travel. Statement credits for travel purchases return the equivalent of $1.33 per point for Blue Sky cardholders.
- No Annual Fee. It is becoming increasingly difficult to find a rewards card that does not have an annual fee. The Blue Sky credit card is a good option for people who don’t spend enough to justify paying an annual fee.
- 0% Introductory APR. It is always a bad idea to carry a balance, especially when you have a rewards card with high interest rates. That said, a 0% introductory APR can be used to your advantage, as long as you can pay off the balance before the introductory period expires.
- Exclusive Promotions for Cardholders. Blue Sky cardholders receive special deals and exclusive access to concerts, plays, and sporting events.
- More Ways to Save. Blue Sky cardholders receive special discounts and savings for clothing, electronics, and vacation packages from eligible merchants.
- Travel Protection Services. Cardholders receive free car rental loss and damage insurance, and travel accident insurance. The Global Assist hotline provides emergency assistance for travelers that are more than 100 miles away from home.
- Perks for Travelers. Perks for cardholders who travel include free breakfast and guaranteed rooms for late arrivals at participating hotels.
- High APR. High interest rates more than offset even the best rewards, so those who can’t pay off their balance each month, or who have less than perfect credit, should look for low APR credit cards.
- Middle of the Road Rewards. The card offers $1.33 per dollar charged for most purchases. Additionally, cardholders have to accumulate at least 7,500 points before they can be redeemed. By comparison, the best travel rewards credit cards return more to cardholders with less restrictions.
- High Foreign Transaction Fees. At a time when many credit cards are dropping their foreign transaction fees, American Express continues to charge 2.7% on this card. This fee quickly adds up, so if you travel internationally, this may not be the card for you.
Nothing is more frustrating than accumulating frequent flyer miles that are difficult or impossible to redeem. Similarly, it can be hard to justify paying an annual fee for a credit card when the rewards don’t exceed the annual fee. The American Express Blue Sky card allow cardholders to avoid these pitfalls by earning cash back instead of miles and by offering an annual airline allowance that can provide worthwhile benefits and offset the annual fee. In a confusing market for credit cards, these products retain real value. Do you have a Blue Sky from American Express®? How have the travel rewards and benefits worked out for you?
Editorial Disclosure: This content is not provided or commissioned by any bank, credit card issuer, hotel, or airline. Opinions expressed here are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.