American Express Blue Sky Preferred Credit Card Review

Great rewards, but overly complicated and confusing. Plus there's the $75 annual fee.

• People who want to earn discounts on travel on their credit card purchases. 

Credit Rating Required

• Fair to Excellent (660+)

Pros

• Very generous purchase rewards.
• Double points on dining, hotel, and car rental purchases.

Cons

• High annual fee.
• High APR.
• No bonus points for air travel.
• Confusing rewards program.
• Reduced rewards for statement credits not used for travel.

Rewards

• Two points per dollar on dining, hotel, and car rental purchases, one point on everything else.
• 7,500 bonus points when you spend $500 within the first 60 days of membership, equal to a $100 statement credit.
• $100 annual "airline allowance" good for airline incidental fees.

APRs

• Zero percent on purchases for the first six months, then 17.24 percent to 21.24 percent, depending on your credit history.
• Penalty APR: 27.24 percent.

Fees

• Annual fee: $75.
• Late fee: Up to $35.
• Returned payment fee: $35.
• Balance transfer fee: Three percent of balance

This is American Express's latest variation on travel rewards cards. However, while the name and the logo on the card imply that this is a frequent flyer card, it really isn't. But you can earn statement credits that help you pay for airline tickets.

Confused? Me, too.

You earn double points on dining, hotel and car rental purchases - but not on airfare. You earn one point per dollar on everything else, including airline tickets. You can earn 7,500 bonus points, which is good for a $100 statement credit, if you spend $500 in the first 60 days.

Points can be redeemed for a $100 statement credit on eligible travel purchases when you reach 7,500 points, which means the rewards are worth a generous 1.3 percent. However, if you redeem the points for cash, you only get a statement credit worth $50 for 6,500 points, which cuts the rebate reward in half. Obviously, you'll want to redeem the points for travel because they're worth way more.

You get an annual $100 "airline allowance," which you can use to pay for incidental airline charges such as baggage fees, in-flight meals, and headphones and such.

There are no blackout dates or restrictions and there are no caps or expiration dates on the number of points you can earn.

There is a no-fee version of this card, called simply American Express Blue Sky, although you only earn one point per dollar of spending and you don't earn any of the other bonus rewards that come with the preferred card.

While the rewards are generous, this card is too confusing. While it rewards you in statement credits for travel, you don't earn any extra points for purchasing airline tickets. That doesn't make sense to me.

Therefore, it's not the best card for a heavy traveler. If that describes you, you're better off with the American Express Premier Rewards Gold Card despite the higher $175 annual fee. The rewards are much better.

It should be noted that Blue Sky is a credit card, meaning you can carry a balance if you want to, while Premier Rewards Gold is a charge card and must be paid in full each month.