Here's the best credit card for grocery shopping

For many people, grocery shopping and filling the car with gas are tasks they do regularly - even multiple times a week. Wouldn't it be great if there was a credit card that rewarded you every time you had to pay for these essentials?

If you have great credit and want to earn the highest cash-back rate available on grocery shopping, plus high cash-back rates on gas and department stores, Blue Cash Preferred from American Express can't be matched.

NextAdvisor.com, the consumer information site that reviews credit cards, found Blue Cash Preferred to be the best cash-back-card option around.

With 6% cash back on groceries, 3% cash back on gas and department stores, and $150 introductory bonus, it's an all-around fantastic card with some of the highest cash-back rates.

The highlights

If you enjoy earning phenomenal cash-back rewards, this is the card for you. The Blue Cash Preferred Card from American Express combines cash back with a 15-month 0% intro APR and great American Express benefits. Card holders get a $150 bonus after spending $1,000 in the first three months of opening an account.

If you use your card regularly, you'll have no problem meeting these requirements. You can even pay for your mortgage and your utilities with the card (if these entities accept credit cards, which most do) to help accrue the initial $1,000 and to earn even more cash back over time.

Cardholders also earn a whopping 6% cash back at US supermarkets - including, but not limited to, Safeway/Vons, Krogers, Whole Foods, Trader Joe's, Pathmark, Shoprite, and Stop and Shop - on their first $6,000 in grocery purchases each year, and 1% back after that.

If you do a lot of food shopping, this is a great way to earn extra cash. Think of it as a 6% discount on your groceries every time you pay with Blue Cash Preferred.

In addition, you'll earn an unlimited 3% cash back at US gas stations and 3% back at select department stores such as Sears, Macy's, Kohl's, Nordstrom, JCPenney and many more. There's no limit on the amount of cash back you can earn at this 3% rate, so if you're a big spender on either gas or department stores, this card is a no-brainer.

The rest of your card purchases will earn a very decent 1% cash back. You can redeem your earned cash back for a statement credit, gift card (including AmEx gift cards), or items in the American Express online shopping mall.

Along with earning great cash-back rewards, Blue Cash Preferred cardholders pay no interest for the first 15 months on both purchases and balance transfers. This 0% APR period will keep you interest-free well into 2016 and help you pay down any large card purchases or balance transfers.

World travelers will enjoy that Blue Cash Preferred features chip-enabled technology, making it easier to pay for purchases outside the US. International merchants, particularly in Europe, require this technology for most credit-card purchases

Having an American Express card also means you get great benefits, including extended warranties on eligible purchases, purchase protection, and return protection. Vacations are made easier with car rental loss/damage insurance, travel accident insurance, and AmEx's roadside assistance hotline.

Plus, you get exclusive access to ticket presales and card member-only events.

How do you know if you should apply?

Before applying, you should keep the following in mind:

• You need excellent credit (above 720 and sometimes 750).
• Blue Cash Preferred charges a $75 annual fee. If you're not interested in paying an annual fee of $75, the Blue Cash Everyday Card from American Express may be a better option. The card doesn't charge any annual fees, features a 15-month 0% APR, and lets you earn 3% back at US supermarkets, 2% back at gas stations and select department stores, and 1% back on everything else.
• If you don't spend much on groceries, gas, or department stores, the cash-back rewards won't really add up. You're probably better off with a card that offers a higher flat rate back on all purchases like the Citi Double Cash Card. It features an effective 2% cash back on all purchases, no annual fee, and the ability to get your rewards via check or direct deposit.
• Purchases at warehouses and superstores aren't eligible for the 6% cash back with Blue Cash Preferred or the 3% cash back on gas. Instead, you'll earn the standard 1% cash back.
• The only way to redeem your cash-back rewards is as a statement credit on your account, gifts cards, or other merchandise.
• If you enjoy traveling outside the US, Blue Cash Preferred's 2.7% foreign transaction fee could add up. For those who like to use their credit cards when they travel abroad, consider the Capital One Quicksilver Cash Rewards card. It charges no foreign transaction fee and offers 1.5% cash back on all purchases.

Bottom line, if you pay for groceries and gas regularly and shop at department stores, Blue Cash Preferred's 6% cash back on groceries and 3% cash back on gas and department stores is your best bet. Not only will you benefit from generous cash-back rates, but you can also take advantage of the 15-month 0% APR on balance transfers and purchases.

Take advantage of NextAdvisor's free Cash Back Calculator to see which card is the best choice for your particular situation.

Learn more about Blue Cash Preferred and see if it's right for you.

This post is based on an article originally published on NextAdvisor.

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