Costco Amex vs. Blue Sky Amex
by Jason SteeleA reader asks:
I have both the Costco TrueEarnings AMEX card as well as the Blue
Sky AMEX card. How do these two cards compare as far as using
them for travel expenses, and for daily use towards travel
benefits?
It seems to me that the Costco card beats the Blue Sky card in every
way. I think you get a $100 travel credit for 7,500 Blue Sky points
(which are accumulated everywhere), but if I spend $7,500 on the Costco
card, I have the potential of getting more than $100 in cash back.
How would you use these two cards? Costco for gas and restaurants
and… everything else too? Blue Sky as a benchwarmer card?
Josh
Great question Josh. For those of you who arent’ familiar with the Blue Sky card, check out our review here. The Blue Sky card is what I would call a value based travel reward card in that the award redemption is specifically based on the reward value. In this case, you earn an award worth $100 for every $7,500 spent, for a 1.33% return. You then spend your reward by calling Amex travel to make a reservation. It’s advantages are it’s simplicity and it’s lack of capacity restrictions and blackouts. If you are not the type of person who wants to go up against a restrictive reward system in hope of finding some high value rewards, this may work for you.
The Costco Amex, by comparison the Costco Card offers cash back that you can use for anything, not just travel. In addition, it offers a higher rate of return for other categories. That includes 3% for gasoline and restaurants, 2% for travel, and 1% for everything else. All and all, it is a very good cash back card. You would get slightly more for the “everything else” category if you stuck with you Blue Sky card, but with gas, travel, and restaurants, Costco will do pretty good.
There are a few things you will want to be carefull with. First, the Costco card only gives you your cash back at the end of the year that you have had the card. If, for some reason, you decide to cancel the card, or Amex decides to cancel you, you forfeit the cash back. I wrote about this here. It’s like you have turned the tables around and now you are the creditor and American Express owes you an unsecured debt. If something happens to them, or they arbitrarily decide to cancel your card the day before they are supposed to pay you, you are out of luck.
As for your concept of a “benchwarmer” card, I presume you mean a backup. Having an Amex to backup your Amex is not a good idea. First, a backup to Amex is important as many merchants do not accept it. Second, Amex themselves has been known to cancel accounts for no reason, or just suspend you account while they do a “financial review.” Any Amex card holder must have a Visa or a Mastercard as their “benchwarmer”.
If you are going to take your chances with the Costco card, I would recommend the ultra high cash back earning Schwab Card, which is now offering an industry leading 2% on everything. Save your Costco card for restaurants and gasoline, and get 2% cash back immediately from Schwab. In that way, you should average well over 2% cash back throughout the year, and not be tied to any type of travel agent for your reward.
August 17th, 2009 at 09:22
You are wrong about redemption on Blue Sky: you don’t need to call to book travel through Amex. You can make any qualifying travel purchase (airfare, hotels, rental cars, etc) and request a statement credit afterward against that item. It’s even more flexible than you make it sound, since you don’t have to book with Amex travel.