Best Credit Cards for Everyday Spending

Best Credit Cards for Everyday Spending

Many people who are new to this ask me what credit card is best for beginners.  My usual advice is to start with a card that earns flexible rewards.  By this I mean cards that earn American Express Membership Rewards, Chase Ultimate Rewards, or Starwood Preferred Guest Starpoints.  In general, you will want to put your everyday spending on these cards rather than an airline or hotel co-branded card.*

Another question I often get is “which cards do you currently use for everyday spending?” You will notice that every card I currently use on a regular basis is a card that earns points that can be transferred to different airlines.

*Once you have a particular goal in mind, it may make sense to apply for airline or hotel co-branded cards for a signup bonus.  For example, if you need Alaska Airlines miles for an upcoming trip, you can apply for the Bank of America Alaska Airlines Visa.  With the current signup offer, after spending $1,000 in the first 3 months, you will earn 30,000 Alaska Airlines miles.

Transferable points are key

According to the numbers, award flights are becoming harder to find.

http://www.cntraveler.com/story/airlines-are-making-it-harder-to-book-frequent-flier-seats

While I cannot argue with the numbers, I have not had any problems finding availability while booking our recent and future vacations.  We sometimes have to be a little flexible with dates, but having points in the three programs mentioned above gives us the ability to book flights with several airlines.  Different airlines work better for different award flights depending on your home airport and destination.

solta island, croatia, croatia on credit card miles and points

How we structure our everyday spending to maximize our earning potential

First of all, if we have recently opened a new card and there is a minimum spending requirement to earn a signup bonus, we will put all of our spending on that card until meeting the minimum.  We then look at category bonuses to determine which card to use for our everyday purchases.

I am in no way implying that this is the best strategy for everyone.  There are so many cards out there so it is important to look at your cards and come up with your own plan!  For example, certain business credit cards have bonus categories that may be a better deal than what I list below.  We do not yet have these business cards, but we plan to get a few very soon.

Also, now that I have the Chase Sapphire Reserve card, I have no need to pay another 95$ annual fee on the Chase Sapphire Preferred card.  Most likely, I will downgrade the Preferred to a free card (no annual fee) that I can still use to earn Ultimate Rewards before my next anniversary.  I will explain how in another post, but this free card has the potential to earn even more points in certain categories than the cards I currently have.

I will update this list and/or post a new list as needed!  There are always exceptions but this is how we generally structure our everyday spending:

Favorite credit card for spending at restaurants

Chase Sapphire Reserve3 points per dollarChase Ultimate Rewards

click here to apply

Favorite credit cards for spending on travel

Flights:

Amex Platinum- 5 points per dollar on airfare
Screen Shot 2017-05-21 at 2.12.35 PM.png

Hotels, Rental Cars, and other travel expenses:

Chase Sapphire Reserve3 points per dollarChase Ultimate Rewards

click here to apply

rental car hawaii, earn miles, redeem miles hawaii

You will definitely want to rent a jeep to explore Hawaii!

rental car hawaii, earn miles, redeem miles hawaii

Favorite credit card for grocery stores

Amex EveryDay Credit Card-2 points per dollar on up to $6,000 annually, plus a 20% bonus on points earned when 20 transactions are made with the card within a billing cycle.  20 trips to the grocery store in a month may seem ridiculous, but we have twins and a growing 4 year old.  These kids require lots of milk.  We buy milk almost every other day!

Which credit card should I use on shopping portals?

See also: Earning Miles and Points Part 3: Shopping Portals

If using the Chase portal, Chase Sapphire (Reserve or Preferred)

Chase Ultimate Rewardschase ultimate rewardsIf using an airline portal, American Express SPG

american express starwood preferred guest earn bonus miles

American Express Offers

Amex Offers are a great way to save money or earn extra points at different retailers.  Find offers from different brands-for dining, shopping and more.  Add the offers to your card then use your card when you pay.  Some offers are for cash back and will post as statement credits on your bill, and some offers earn Bonus American Express Membership Rewards.  I will do a full post on this soon.

You must use the American Express card for which the offer is saved.

Any purchase that will not earn bonus points on any of my cards:

In other words, if I’m going to earn one point or mile per dollar no matter what card I use, I use my Amex SPGstarwood preferred guest starpoints earn bonus air miles

Although we are only earning 1 Starpoint per dollar, we can get 25% more value if we use Starpoints as airline miles:

  • SPG gives a 5,000 mile bonus for every 20,000 points transferred to airline miles
  • For this reason, we’re actually earning more points than a co-branded airline card.
  • Here is an example:
    • I need 25,000 Alaska Airlines miles for an award ticket that I am going to want to book in the future
    • Since I am trying to earn Alaska Airlines miles, you may wonder why I would not just use the Alaska Airlines card for all of my spending
    • With the Alaska Airlines credit card, it would take $25,000 in spend to get 25,000 miles if I am getting only 1 point per dollar
    • With the Amex SPG, it would take $20,000 in spend to get 25,000 miles, even if I am only getting 1 point per dollar.  This is because I can transfer 20,000 Starpoints to Alaska Airlines for 25,000 miles.
    • In addition to getting the miles with less spend, here is another benefit of using a card that earns transferable points: let’s say I have trouble using those Alaska Airlines miles I intended to use
      • If I earned those 25,000 miles with the Alaska Airlines credit card, I am limited to Alaska Airlines and their partners.
      • If I earned 20,000 starpoints, I still have the option to transfer to other airlines.  This means that if for some reason the flight I was hoping to book with Alaska Airlines is not working out for whatever reason (no availability for my dates, inconvenient routes/layovers, etc), I can still check with other transfer partners of SPG for availability.

Exceptions:

There are always exceptions to this. For example:

I gave this tip in an earlier post but it’s worth repeating here.  Never assume an email from the bank/airline/hotel associated with your credit card is spam.

  • Ryan has the American Airlines card that is used by Barclaycard (this is different than the Citi AAdvantage card)
  • In January he received an email that if he spends at least 500$ on his card each month January-March, he will get 15,000 bonus American Airlines miles.
  • He almost never uses this card (because he primarily uses the SPG and Chase cards like me) but keeps it for benefits
  • Due to this offer, he spent 500$ on it for each of those 3 months because it is a great easy way to earn some bonus miles. That’s basically 10 bonus miles per dollar, and he wasn’t limited to certain categories. Any purchases he made counted toward the 500$ or more spend needed for those 3 months.

Conclusion

Assess your current credit cards and determine how you can maximize your earning potential.

Note that these are not our only credit cards.  We actually have several others that we keep.  If a credit card has no annual fee but has benefits, or if the benefits are enough to justify paying the annual fee, we will usually keep it open.  Anytime one of our open cards has an anniversary approaching, we reassess whether or not we want to pay another annual fee.  I will do a post on our current credit card inventory soon.

What cards do you use for your everyday spending? Contact me with questions or comments!

American Express Platinum Card

Annual Fee: $550

  • Earns American Express Membership Rewards
  • Earn 5 Membership Rewards points per dollar on flights booked directly with airlines or with American Express Travel.
  • Earn 1 point per dollar on all other purchases
  • As a Platinum Cardholder, get $15 in Uber credits for U.S. rides each month plus a bonus $20 in December.  That can be up to $200 in annual Uber savings.
  • Earn 5 Membership Rewards points per dollar on eligible hotels booked on amextravel.com
  • $200 airline fee credit.  Select a qualifying airline and then receive up to $200 a year in statement credits when incidental fees are charged by the airline to your Platinum Card account.
  • Access to Amex Offers.  Save money and earn extra points when you take advantage of these offers
  • Lounge access
  • $100 Global Entry or 85$ TSA precheck reimbursement
  • $175 for up to three AUs per year.
  • No foreign transaction fees

 

American Express Starwood Preferred Guest credit card

Annual fee: $95 (waived the first year)

  • Earns Starwood Preferred Guest Starpoints
  • For every dollar of eligible purchases, earn up to 5 Starpoints at participating Starwood hotels–that’s 2 as a card member on top of the 2 or 3 you can earn as an SPG member.
  • Earn 2 Starpoints for every dollar of eligible purchases on the card at participating Marriott Rewards hotels.
  • Earn 1 Starpoint for all other purchases.
  • Transfer Starpoints to Marriott Rewards at a 1:3 ratio
  • Transfer Starpoints to airlines and earn a bonus 5,000 miles per 20,000 points transferred.
  • No foreign transaction fees

 Chase Sapphire Reserve

click here to apply

Annual fee$450

  • Earns Chase Ultimate Rewards
  • This is my favorite premium credit card
  • $300 annual travel credit
  • $100 Global Entry fee reimbursement
  • Earn 3 points per dollar on travel and dining
  • Earn 1 point for all other purchases
  • Shop through the Ultimate Rewards portal to earn even more bonus points
  • $75 per authorized user

Chase Sapphire Preferred

Annual Fee: $95 (waived the first year)

  • Earns Chase Ultimate Rewards
  • Earn 2 points per dollar on dining and travel
  • Earn 1 point per dollar on other purchases
  • Add authorized users at no charge.  In other words, transfer points to your loved ones for free!

Amex Everyday Credit Card

Annual Fee: $0

  • Earn American Express Membership Rewards points with this card
  • Earns 2 points per dollar at grocery stores on up to $6,000 per year
  • Earns 1 point per dollar on all other purchases
  • Earn 20% more points on purchases if you use your card 20 or more times in a billing period
  • Eligible for Amex Offers.  Save money and earn extra points when you take advantage of these offers.
  • Add authorized users at no charge.  In other words, transfer points to your loved ones for free!

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4 thoughts on “Best Credit Cards for Everyday Spending

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