I'm new to this credit card churning idea and had a question regarding downgrading my card.

I'm looking to get a card for cashback / rewards on Grocery purchases and the Amex Blue Cash Preferred offers the best (6%).

The card comes with a $75 AF (waived the first year) and being a single guy in my early 20s, I don't spend enough on groceries to justify the fee past year one. I'm better off with the 3% that the Amex Blue Cash Everyday card offers with no AF.

After doing some research, a lot of websites/blogs suggest getting one of these 2 cards for groceries. My question is, why would anybody NOT sign up for the Preferred card, take advantage of the better sign-up bonus, and then downgrade before the AF fee hits?

Does that hurt your credit? Will Amex look at it negatively in the future?

Thanks

No, feel free to downgrade. Also the AF is $75.

It gives 6% for the first $6000 dollars per calendar year; 3% for the everyday card

Many people use this strategy; however, in order for it to work the annual fee should be waived the first year.

Unfortunately, unless you have an offer I'm not aware of, I do not believe that the annual fee is waived for the BCP right now.

When I received my BCP in July, the annual fee posted within the next month, so there would have been no opportunity for me to keep it a year and then downgrade to the BCE.

There are ways to make the BCP pay for the AF. Even if you don't spend enough on groceries, throw in a $500 gift card at the grocery store once a month and it will pay for itself plus more.

The break even point for justifying the $75 AF is $2500 worth of groceries. Being single myself, there's no way I could eat that much food in a year. But I use my BCP to buy all my gift cards at the grocery store... Petco, Amazon, Chipotle, etc so I easily surpass that $2500 mark (plus my store goes fuel points so thats a double win for me). You could also do as healthnut suggested and toss in a $500 visa gift card each month. The VGC can easily be unloaded via Bluebird, or if you aren't into that game yet just use it for your "normal" spend throughout the month (think restaurants, utility bills, doctor's visits, etc).

You also get 3% on gas, 3% on some department stores, and 1% everywhere else. Depending on your spending habits, it should be very easy to meet the AF.

I use my card for groceries, gas (although less than 200/yr), and department stores ONLY. I haven't had a problem tripling the AF each year. My groceries average 250/mo, with a max of 350.

Is there no sign up bonus anymore? When I applied in Jan 2012 I was given $150 cash back, so I essentially had no annual fee for two years.

AMEX also has special offers on its cards year round. Small Business Saturday is just one of these. I saved over $200 with these special offers in the past year. That is many times the AF of $75.

Yes Amex Sync offers could alone could easily be worth the annual fee. I know I have made a fair amount of money with the Sync deals.

I used to do the same, and for many cards it makes sense. But look around! Going to something like GiftCardGranny, I buy Petco cards at 27% discount, so getting them at 6% off isn't a win. This type of discount is on the high end, but many cards are available at more than 6% off.

Yes I agree, but I've purchased from the resale sites and a few have turned out to be duds, so it may take a couple weeks to get a card that actually works. If I need something from Petco, HD, etc in a hurry I just buy a gc from the grocery store.

With the 2x fuel points (assuming you use all 35 gallons), its an extra 7% savings. At 4x points its an extra 14%. So it also kinda depends on the deals you can get from the gc resellers.

The current public sign up offer is $100 statement credit + 1yr of Amazon Prime. Referral offers are at $150 statement credit, but no Amazon Prime.