Credit cards could bring you great rewards, often greater than you thought. Typically, there are two ways to earn rewards with credit cards: everyday purchases and sign-up bonus. Credit cards with high sign-up bonus (see Best Credit Card Sign-Up Bonus) are usually not the credit cards you should choose for everyday use, since they often come with annual fees but not so good reward rates. Instead, the credit cards you choose to keep for everyday use should be the ones with great reward rates on your spending categories, and can cover their annual by the rewards they bring.
- 1. Rotating Category 5% Cash Back
- 2. Grocery
- 3. Restaurant
- 4. Other Categories
- 5. Credit Cards That Give You Free Nights (FN)
- 6. Excellent Cards That Can Boost Point Values
- 7. Premium Credit Cards
- 8. Conclusion
1. Rotating Category 5% Cash Back
They offer 5% cash back on a category each quarter. The UR points earned by Freedom can be even more valuable than their cash value if you have CSP/CSR. They both have their unique rewards categories and, most importantly, come with no cost! These credit cards are really no-brainers for almost anyone.
There are 4 AmEx grocery credit cards, you can choose any one of them:
AmEx EveryDay (ED) (no annual fee)
AmEx EveryDay Preferred (EDP) ($95 annual fee)
AmEx Blue Cash Everyday (BCE) (no annual fee)
AmEx Blue Cash Preferred (BCP) ($95 annual fee)
Note that ED is the only credit card with no annual fee that can transfer points into airline miles, so it is very highly recommended for those who are interested in points and miles.
Barclaycard Uber (no annual fee)
4% cash back on restaurants and no annual fee.
Chase Sapphire Reserve (CSR) ($150 effective annual fee)
You can earn 3x UR points on dining and travel, which is worth ~4.8%. See below for more short intro.
4. Other Categories
Citi Double Cash (no annual fee)
Earn 2% cash back on everything. There are another two no annual fee 2% cash back cards: Fidelity Rewards (Visa) and Alliant Visa Platinum Rewards. I prefer DC among the three, because: you can get another Citi credit card with huge sign-up bonus, then downgrade it to DC after a year, so that you can keep the credit history of the card and get DC without additional hard pull.
Chase Freedom Unlimited (CFU) (no annual fee)
If you like to study points/miles and maximize their values, then by the help of CSP/CSR, the 1.5x Ultimate Rewards (UR) points on everything is worth about ~2.4% cash back, it is better than the DC; otherwise, it’s only 1.5% cash back.
5. Credit Cards That Give You Free Nights (FN)
Chase IHG ($49 annual fee)
You can get 1 worldwide IHG free night with no category limitation every year! Worth $150+.
Chase Hyatt ($75 annual fee)
You can get 1 worldwide Hyatt free nigh with category 1~4 every year. Worth $150+.
Both of the cards have annual fees, but their annual free nights cover their annual fee very easily. As long as you need to stay in hotels a few times per year, these two cards are suitable for your, even if you leave them at home and only pay the annual fees for the free nights.
A similar card is the Chase Marriott ($85 annual fee), you can get 1 worldwide Marriott free night with category 1~5 every year. But it’s hard to find a good redemption in the US, so I don’t recommend it here.
6. Excellent Cards That Can Boost Point Values
Chase Sapphire Preferred (CSP) ($95 annual fee)
You can earn 2x Ultimate Rewards Points on dining and travel with Chase Sapphire Preferred (CSP) Credit Card, which is not impressive. The most important role of the CSP, however, is that it allows you to transfer Ultimate Rewards Points earned with both Chase Freedom Card and CSP to partner loyalty programs including UA and Hyatt, boosting the UR value from 1 cent/point to 1.6~1.8 cent/point. See Maximize Points Value for an overview, and Introduction To Chase Ultimate Rewards (UR) for detailed information. When you have the CSP, your Chase Freedom will become 8~9% cash back on rotating categories, and your CFU will give you 2.4% cash back on everything! In addition, you can get primary car rental insurance with this card. Most importantly, the Chase 5/24 rule (see here for detailed information) makes this card almost impossible to re-open if you apply for credit cards very often.
7. Premium Credit Cards
Chase Sapphire Reserve (CSR) ($150 effective annual fee)
You can earn 3x UR points on dining and travel, and 1x UR points on other purchases. You can also transfer your UR points to partner loyalty programs and maximize the their value. Free access to Priority Pass Select lounges. Primary car rental insurance. CSR and CSP have a lot in common, and you can choose one of them to keep.
Citi Prestige ($100 effective annual fee)
It is very worthwhile for people who travel a lot. With this card, you can use your TYP as 1:1.6, which makes it a must-have for those who are interested in TYP. It has many travel benefits, including close to a 5% rewards rate on travel, free access to AA Admirals Club and Priority Pass Select lounges, 4th night free on any hotel worldwide, extraordinary trip delay insurance, etc. Even if you only travel one or two times per year, it may still be worth paying the annual fee.
Premium credit cards have high annual fees, so we recommend to keep only one of them, see Compare Premium Credit Cards for more detailed comparison.
Though there are a lot of cards that worth keeping, but actually you don’t carry a lot with you: you should bring your DC or CFU; one grocery card; one restaurant card; you can bring Discover it of Chase Freedom when the 5% cash back category is useful; and you can throw all other cards into your sock drawer and enjoy the rewards they give you!