Stock investing for dummies – The Best American Express Cards

Stock investing for dummies

I’ve heard people say that American Express credit cards aren’t for students because they are difficult to get approved for. While American Express is a prestigious brand, the truth is that students can in fact get approved for an American Express credit card.

Ben Schlappig of the One Mile At A Time blog shares his experience about applying to American Express cards as a student, “American Express has some of the easiest credit cards to get approved for with a limited credit history. My credit age was only seven months when I got approved for my Starwood Preferred Guest Amex and now I was approved for yet another card six months later.”

While American Express doesn’t offer student specific credit cards, there are some that do suit students. As with any credit card, it is best if you have at least a few months of credit built up.

Blue Cash Everyday® Credit Card

When considering a student friendly credit card, no annual fee and good rewards are top of list. The Amex Blue Cash Everyday® Credit Card delivers. See for yourself here.

First, there’s no annual fee to worry about. Second, this is a cash back card. Cash back rates vary depending on where your purchases are made but the cash back breakdown looks like this:

  • 3% U.S. Supermarkets
  • 2% U.S. Gas Stations and select U.S. Department Stores
  • 1% Other purchases

As an initial bonus, if you can spend $1000 during your first 3 months, you’ll receive $150 back. If you haven’t run the numbers yet, that’s a whopping 15% return. Find out more here.

Another great bonus is that you get a 0% APR on purchases and balance transfers for 15 months. However, don’t fall into the trap of letting your purchases ride each month. If you do, by the time 15 months rolls around, you’ll find you have $1000s in debt. Instead, pay the balance at regular intervals during the intro period.

With an APR between 13.99% to 24.99%, this is a card you’ll want to pay the full balance on each month. 

Amex EveryDay® Credit Card

This is another Amex card that doesn’t have an annual fee. It also has a 0% intro APR for purchases and balance transfers but for 12 months instead of 15. Learn more here.

Rather than cash back, you earn membership rewards (which can be used for travel rewards). Similar to the Blue Cash Everyday® credit card, there is a sliding scale on how points are earned. It looks like this:

  • 20% more points – 20 or more purchases in a billing cycle
  • 2X points – supermarkets
  • 1X points – other purchases

You may be wondering what exactly can you do with membership rewards points. Here are a few ways to use them:

  • Pay off eligible charges on your card
  • Booking with American Express Travel, which offers benefits such as no blackout dates or seat restrictions
  • Transfer points to select frequent traveler programs

As an initial bonus, if you can spend $1000 within your first 3 months, you’ll earn $10,000 points! Check out more about this awesome deal.

Blue Cash Preferred® Card from American Express

Cash back cards offer lots of flexibility since you have so many options with cash. We’re going to look at the Blue Cash Preferred® Card, which does have an annual fee but also higher cash back rewards. The idea in using this card is: Can you get enough cash back to cover the annual fee with money left over? Look at the card for yourself.

Let’s look at the cash back sliding scale first:

  • 6% – U.S. Supermarkets
  • 3% – U.S. Gas Stations and Select U.S. Department Stores
  • 1% – Other Purchases

Compared to the Blue Cash Everyday®, you get double cash back for supermarkets and 1.5X for U.S. gas stations and select U.S. department stores. Also, if you can spend $1000 in first 3 months, you’ll earn $200 cash back instead of $150. That alone takes care of the annual fee.

What do things look like in the second year? Let’s assume you can charge $500 a month on this card. As a college student, that basically means putting every thing on the card, including car insurance and other recurring expenses. It also means paying the card off every month rather than carrying a balance and having to pay interest.

$500 per month comes to $6000 per year. That’s exactly the annual cap on 6% cash back. It drops to 1% after $6000 dollars. 6% of $6000 is $360. After paying the annual fee, that leaves $265, which is more than the Blue Cash Preferred® ($6000 x 3% = $180). This looks like a great deal. Learn more here.

Cash Back Comparison

To summarize the main differences between these two cash back cards:

Blue Cash Everyday® Credit Card

  • $150 after spending $1000 in first 3 months
  • Intro 0% APR and balance transfers for 15 months
  • 3% at supermarkets and 2% at gas stations and department stores

Learn more about this card here.

Blue Cash Preferred® Credit Card

  • $200 after spending $1,000 in first 3 months
  • Intro 0% APR and balance transfers for 12 months
  • 6% at supermarkets and 3% at gas stations and department stores
  • $95 annual fee but covered in spending of at least $1584/yr in the 6% bracket

Learn more about this card here.

It seems as though the Blue Cash Preferred® Credit Card is a better deal. You’ll earn $85 more per year ($265 – $180) if you spend $6,000 per year within the top cash back bracket.

What’s your favorite American Express card?

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