In a sign of the times, American Express is increasing the rewards on its Blue Cash Preferred Card, announcing 6 percent cash back on U.S. streaming subscriptions.
In a press release, the payments company announced that in addition to receiving a $250 welcome bonus, when customers spend $1,000 in the first three months, they will get the 6 percent cash back on select streaming services and 3 percent cash back when using the card for transit. The company said the changes will go into effect on May 9, 2019.
American Express said the Blue Cash Preferred Card will still offer 6 percent cash back in U.S. supermarkets and 3 percent cash back at U.S. gas stations.
"Since we launched the card in 2011, our cardmembers’ buying habits have evolved, which is why we’re evolving the card, too,” said Kunal Madhok, vice president of U.S. consumer lending and acquisition at American Express. “We’re adding the ability for cardmembers to earn rewards in even more innovative ways, from streaming their favorite shows at home to commuting to their office the next morning.”
As a reflection of its customers’ spending habits, American Express said the two new categories will replace the 3 percent cash back customers got at select U.S. department stores. Cardmembers will get 1 percent cash back on those purchases instead. The payment company said research shows millennials are spending the most on groceries, streaming and commuting.
“Because this card focuses on everyday spending like groceries, transit, gas and streaming services, its target market is very wide," said CreditCards.com Analyst Ted Rossman in an email to PYMNTS. "If I had to pick, I’d argue that the best potential fits are older millennials and Gen Xers. Those groups include lots of suburban commuters with growing families."
Rossman said the spending threshold on the card is "remarkably low" for the industry, and the $250 cash bonus for spending $1,000 gives customers a nice reward. "It’s not the biggest sign-up bonus that’s out there, but it’s a solid return for a relatively low amount of spending. In line with the industry trend favoring ongoing value over a mega sign-up bonus, this card could really pay off in the longer term,” he said.