My Favorite Credit Cards

January 19, 2017

Do you find yourself stuck with big credit card bills after the holidays? One way to make credit cards work for you instead of against you is by maximizing the points you earn on stuff you buy throughout the year. In fact, I generally enough in points to more than cover my holiday spending.

Don’t forget that this only works if you pay the balance off each month. Late payment fees and interest charges can more than erase the value of points you earn. With that being said, here are the cards I use for each of my major spending categories:

Regular bills: For things like my cable, cell phone bill, insurance premiums, and subscriptions, I use the Chase Ink Cash Mastercard. It pays 5% cash back on the first $25k per year you spend on office supply stores, cellular and landline phone service, and Internet and cable TV services, 2% cash back on up to $25k per year spent on gas stations and restaurants, and 1% cash back on everything else. I keep this card at home so I don’t have to worry about losing it and having to update all my autopays.

Business travel: I use the new Chase Sapphire Reserve, which offers primary rental car coverage and 3 points per dollar spent on travel and restaurants. Those points can then be combined with the Chase Ink points above and redeemed for 50% more in Chase’s Ultimate Rewards portal or exchanged for points 1:1 with one of Chase’s 11 travel partners. There’s a pretty steep $450 annual fee but also a $300 travel credit and a $100 Global Entry fee credit so you can still come out ahead if you travel enough. Finally, it offers a 100,000 point sign-up bonus if you apply by March 12 at one of Chase’s bank branches and spend $4,000 in the first 3 months.

Amazon purchases: I’m an Amazon Prime member and do most of my big ticket spending on Amazon so the Amazon Prime Rewards Visa Signature Card makes sense. It offers 5% cash back on Amazon purchases (for Prime members), 2% back on restaurants, gas stations, and drug stores, and 1% back on everything else along with purchase and extended warranty protections. Not only is there no annual fee, you also get a $70 Amazon gift card for signing up.

Target purchases: I have a Target a couple blocks from my home so I tend to do most of my in-person shopping there. The Target REDcard provides a 5% discount and an additional 30 days for returns. I signed up for the debit card since it provides the same benefits without having yet another credit card on my credit report.

Other purchases: I use the Consumers Credit Union Visa Signature Cash Rebate card. It gives me 3% cash back on grocery stores, 2% on gas, and 1% on everything else. That doesn’t sound that great, but if I spend $500 in a month, I can get a 3.59% interest rate on up to $15k in my Consumers Credit Union rewards checking account and if I spend $1,000 in a month, I get a 4.59% rate on up to $20k in that account. That 4.59% interest rate can easily dwarf the value of other cards’ rewards, especially if you’re more of a saver than a spender like me.

Once I hit $1,000 in a month on my Consumers Credit Union Visa, I use the Citi Double Cash Mastercard. It offers a simple 1% cash back on every purchase and then another 1% cash back when you pay it off for a total of 2% cash back on all purchases. This is a good card to have in addition to any cards you may choose for more specialized spending categories.

Keep in mind that just because I chose these credit cards doesn’t mean they’re the best for you. Think about how you use credit cards and what you spend them on to see which card(s) offer you the most value. (For some, the simplicity of having only one card may be their best value.) Finally, I’m always up for suggestions. If you know a card that might be better for my spending, send me an email at [email protected].

Which Credit Cards Are the Most Rewarding?

December 04, 2014

One of my favorite things this time of year is being able to use credit card reward points to cover most or even all of my holiday shopping. While it obviously doesn’t make sense to buy things just to earn rewards (especially if you can’t pay the card off in full), why not get as much as you can from purchases you’re going to make anyway? In deciding which cards to use, there are a few rules of thumb I like to follow: Continue reading “Which Credit Cards Are the Most Rewarding?”

The 5 Most Rewarding Cash Back Credit Cards

October 17, 2013

I recently received an email from a friend asking for a suggestion for a new cash back rewards card. Credit card debt can be a dangerous thing but as long as you pay off the balance in full each month, getting cash back is a great perk to using credit cards. I especially like cash back as a reward because of the simplicity and flexibility it offers versus miles and other types of rewards. Without further ado, here are the best ones I’ve found: Continue reading “The 5 Most Rewarding Cash Back Credit Cards”

Which Credit Cards Give You the Most Bang For Your Buck?

May 24, 2012

After a recent workshop, someone asked me if I use credit cards. She seemed genuinely surprised when I said yes.  Credit cards are like fire. If you misuse them, you can get really burned. But if you use them responsibly by paying off the balance in full and on time (you can have the balance automatically deducted from your checking account so it acts like a debit card), you can earn lots of benefits. These come in the form of everything from straight cash to airline miles to some very strange and unique perks like adult band camp and weightless flight.

Personally, my favorite is cash because of the flexibility it offers. Other rewards too often tempt you to get something you don’t really need instead of saving money. The trick to maximizing your cash back is to pick the right card for each kind of purchase. While there are lots of sites that rank the “top” rewards cards, I’ve found that they usually don’t have the cards with the best offers since they’re generally limited to those that pay or share revenues to be on the site. (In that sense, they’re kind of like commissioned stockbrokers.) Here are the best credit cards I’ve found to earn cash back on each kind of purchase:

Gas and Groceries

These are two expenses that we’ve seen rising in price lately. You can at least get some of that money back with the Pentagon Federal Credit Union Visa Platinum rewards card. The card gives 5% cash back on gas purchases, 3% on groceries, and 1% on everything else. Even if you’re not a Pentagon employee, you can become a member of the credit union by signing up with one of a number of affiliated civilian organizations.

Food and Entertainment

The Citi Forward® Visa card provides 5% back (in the form of cash or reward points) on purchases from restaurants (including fast food), bookstores, music stores, video rental stores, and movie theaters. You also get additional points every billing period that you pay on time and stay within your credit limit.

Rotating categories

The Chase Freedom Visa pays 5% cash back on categories of purchases that rotate every 3 months and 1% on everything else. That means you have to keep track of the changing categories to get the most from it. For example, right now the bonus categories are grocery stores and movie theaters until the end of June.

General Purchases

For everything else, there’s the Fidelity Investment Rewards American Express card, which deposits cash equal to 2% of your purchases into a Fidelity brokerage account with no limits or annual fees. You can also get cards that deposit into a Fidelity 529 or retirement account if you prefer. (In any case, having it deposited into any of those investment accounts has the additional advantage of discouraging you from wasting it.) This is the highest general cash back offer I’ve seen so it’s probably the best card for making purchases that aren’t covered by one of the above categories.

Cash back isn’t the only reward you can get with credit cards. Here are a few others that can have a high cash value for certain types of users:

Future GM car buyers

If your next car will be from GM, you may want to consider the GM Mastercard, which offers a 5% rebate on purchases towards a new GM car. Of course, you have to actually want to buy a GM car to make this card worth it. Otherwise, it doesn’t make much sense.

Frequent hotel guests

The Starwood Preferred Guest American Express card won last year’s SmarterTravel® award for “Best Traveler Rewards Card” and is often cited by travel aficionados for a rewards program that can be worth more than 5% if redeemed for hotel rooms.

Future college students and their friends and family members

The Upromise World Mastercard can pay up to 3% on eligible online purchases and 11% on eligible grocery purchases. The catch is that you need a Upromise account since that that is where the money is deposited and you must shop from their list of eligible merchants to earn rewards. You can also have the money go to the Upromise account of a friend or family member.

I’m sure this list isn’t exhaustive. Do you know any other credit cards with rewards over 2% in cash value? (If it’s less than 2%, you might as well go with one of the Fidelity cards I started with.) If so, let us know about them in the comment section below.