American Express trims restaurant rebate

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Let's talk cash-rebate credit cards.


My Visa card from Capitol One charges no foreign-transaction fees when we vacation outside the United States, and gives me 1% cash back on all purchases. 


And my TrueEarnings Card from Costco and American Express gives me cash rebates on gasoline purchases, restaurants meals, for travel and on all other purchases.


Now, American Express has cut the restaurant rebate to 2% from 3%, but hasn't changed cash back on gasoline (3%), travel (2%) and other purchases, including Costco Wholesale (1%).


The change took place Aug. 1, and was announced in a notice with billing statements, according to American Express. 


I missed the notice, but the change in the restaurant rebate has been reflected recently in full-page ads in The Costco Connection magazine.


At American Express, a representative by the name of Mario said today the rebate change was a "business decision."


Rebates, supermarket sales and other discounts usually are subsidized by the retailer or bank and the manufacturer or restaurant.


It only makes sense to use cash-rebate cards, if you pay off your balance in full every month to avoid interest charges. The two cards I use charge no annual fee.


I once relied heavily on the American Express Blue Cash rebate card, which has one level of rewards on the first $6,500 you spend, then higher rebates over that amount.


The rebates on the first $6,500 are 1% on gasoline and groceries (excluding Costco), and .5% on drugstores. After you spend $6,500, the rebates go up to 5% on gasoline, groceries and drugstores, and 1.25% on everything else.


The Blue Cash Preferred card carries a $75 annual fee in return for 6% back on groceries, 3% back on gasoline and department stores, and 1% everywhere else.


That sounds attractive, but we spend far more money on food at Costco, relying on supermarkets mostly for imported ethnic items and specialty fresh produce, including plantains and green bananas.


Today, I asked American Express to convert my regular no-fee Blue Cash card to a new product, called Blue Cash Everyday.


The Everyday card will gives us 3% back in supermarkets (excluding Costco), 2% back in department stores and gas stations, and 1% back on all other purchases.


I'll have to prepare a wallet guide on where to use our three credit cards.


Capitol One and the TrueEarnings card issue checks, but Blue Cash rebates are applied to reduce your balance once a year.


Costco also issues an annual 2% rebate check for all purchases at the Executive level of membership, which is $100 a year. Our total rebate from Costco and American Express more than cover the membership fee.