What if Sallie Mae married Amex BCP?

I put the best 2-card combos for an average family  according to their needs in this post. I also mentioned that there are many other combinations. However, there is one pairing that IMO merits its own post and one I haven’t covered. It’s Amex Blue Cash Preferred and Sallie Mae Barclaycard.

I haven’t focused on it because the category bonuses duplicate each other. Amex earns 6 percent cash back on up to $6,000 dollars in grocery purchases per year and 3 percent on gas and department store purchases. Sallie Mae earns 5 percent on up to $250 grocery purchases and $250 in gas purchases per month, plus 5 percent on bookstores that currently includes Amazon. Also, at this time, it counts Walmart as a grocery store.

We tend to spend around $500 on groceries per month at Walmart because I buy some stuff like paper towels on Amazon. Our kids are quite small and don’t eat a lot yet. Plus, they get fed at my in-laws across the street on a regular basis.  Through interaction with some of my readers, I found out that some have 3 or 4 kids. So, I imagine, you spend quite a bit more on groceries than we do, probably at least $750 per month.

Additionally, some may have a long commute to work, which takes a lot of gas. In that case,  your best combo of them all would be the two above-mentioned cards. You would have to keep track of your spending and make sure to maximize the bonus categories. Like when you reach $250 grocery spending through Sallie Mae, make sure to switch to Amex. The same goes for gas purchases.

In fact, even if you shop at Walmart, which Amex doesn’t usually count as grocery store, it may be worth it to go with this combo. If you can buy prepaid Visa gift cards there, you would probably still come out ahead, even after the fees are paid. Let’s do the math and see what the overall return would be.

Let’s say your family spends $750 on groceries, $200 on Amazon,  $500 on gas, $ 100 on department stores (for kids school clothes) per month and your total credit card annual spending equals $24,000. Let’s assume you don’t eat out a lot and pack your lunches to work. Here is what we would have in rewards at the end of the year:

1) Grocery spending rewards: $ 150 from Sallie Mae and $360 from Amex. Total is $510. However, we have to deduct $60 in fees for Visa gift cards bought with Amex. Total $450.

2) Gas rewards: $150 from Sallie Mae and $90 from Amex. Total $240.

3) Amazon: $120 total.

4) Department stores: $36 total.

4) The rest of the spending $54, or 1 percent cash back.

The grand total: $900, or 3.75 percent. When we deduct the $75 Amex annual fee, we have $825, or 3.43 percent. Still, pretty good! Plus, remember, you could potentially make up for it through various Amex promotions. Your percentage would be 3.69 if you shop at a regular grocery store instead of Walmart.

In comparison from the above-mentioned post, if we paired up Sallie Mae Barclaycard and Fidelity Amex, the total cash back would be a little over 3 percent (it was actually 2.9 percent, but the Amazon expense was less, so I adjusted it to 3 percent here). However, not all places accept Amex, so realistically, the percentage would probably be lower.

Still, we are talking a difference of  at most 0.5 percent, or around $120 per year. Whether it would be worth it to stop by a grocery store once a month to buy one Visa gift card is debatable. If you needed a gallon of milk anyway, it probably wouldn’t be a big deal, though. But, not all grocery stores will let you use credit card to buy Visa gift cards, so that’s something to consider.

I do think it’s a powerful combination for those who sign up for only a few bonuses per year and mostly shop at grocery stores. The strategy is to maximize the categories that earn 6, 5 and 3 percent and use the rest of your spending towards getting new cards. Your shopping pattern may be different from the example I outlined, so as always, I encourage you to do your own math.

Bottom line.

I think this combo would be a good fit for a family who spends $750 or more per month on groceries, where spouses have long commutes, like to shop at department stores and Amazon, prefer earning cash back and only sign up for  a few new cards per year. Oh, and who are a little OCD!

What do you think? Did I miss anything?

Author: Leana

Leana is the founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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One thought on “What if Sallie Mae married Amex BCP?

  1. Pingback: Yes, Chase Sapphire Preferred can be a keeper | Miles For Family

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