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 American Express Blue Sky and Blue Sky Preferred cards, 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) and the Blue Sky Preferred provides 15,000 bonus points (redeemable for a $200 statement credit) 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.
- Earn Bonus Points with the Preferred Card. Preferred cardholders earn double points for using the card at restaurants, hotels, and for car rentals. There are no limits on the number of points cardholders can earn, and points never expire.
- $100 Statement Credit Against Airline Fees. Even the most tenacious travelers give in and pay airline checked luggage fees once in a while. However, the Blue Sky Preferred card reimburses cardholders up to $100 a year for fees and charges from one airline. The “airline allowance” reimburses cardholders for charges including in-flight meals, Wi-Fi, and entertainment.
- 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 12 months.
- Annual Fee. There is no annual fee for the standard Blue Sky card. The Blue Sky Preferred card, on the other hand, has a $75 annual fee.
- 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. Blue Sky Preferred cardholders receive $2.66 per point when they redeem points earned from travel purchases for statement credits. Blue Sky Preferred cardholders are also eligible for 7,500 bonus points when they charge $500 within the first 60 days.
- No Annual Fee for the Standard Card. It is becoming increasingly difficult to find a rewards card that does not have an annual fee. The standard Blue Sky credit card is a good option for people who don’t spend enough to justify paying the annual fee for the Preferred card.
- Annual Airline Allowance Can Pay for the Annual Fee on the Preferred Card. The pain of paying a $75 annual fee is lessened when you’re eligible for a $100 annual airline allowance. If you pay for meals, luggage, or entertainment on airplanes, this credit is a welcome refund.
- 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 Preferred card offers $2.66 per dollar charged for some purchases, and most items charged to the card earn $1.33 per point. Double points can only be redeemed in the form of a statement credit. 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 cards 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 an American Express Blue Sky credit card? How have the travel rewards and benefits worked out for you?
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.