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The most lucrative thing you can do to earns points is sign up for credit cards and earn the signup bonuses. That’s great as far as it goes, and I do quite a bit of it myself (4-6 cards quarterly most of the time). But even I don’t do it all the time, right now I’m in the midst of refinancing property and until that closes I’m hands-off. There are plenty of people who aren’t going to sign up for cards as aggressively as I will.
Certainly most of the people I come across, and work with, fall into that category. What they want, one of the most frequent questions I get, is what’s the best credit card that I should get?
There’s a simple answer for most people. The best generic, all-purpose credit card advice that I have is to get two cards: the Chase Sapphire Preferred Visa and the Starwood Preferred Guest® Credit Card from American Express.
- I’ve had the Starwood Amex for more than a decade, and it still has a place top of wallet, Starwood points remain the most valuable.
One Starpoint is worth more than 1 point of any other currency. They’re great to redeem for hotel stays, and they transfer to the largest number of airline frequent flyer programs. Those transfers are 1-to-1, and when you move Starpoints into 20,000 miles you earn a 5,000 mile bonus. That’s like earning 1.25 miles per dollar in most airline frequent flyer programs, you get to decide which program you want points in later, and he $65 annual fee (waived the first year) is even lower than most airline mile card fees.
The card offers 10,000 Starpoints after first purchase and an additional 15,000 points when you spend $5,000 within 6 months. This is also the best card for purchasing appliances and electronics thanks to the strong purchase protections.
- That card should be supplemented by the Chase Sapphire Preferred Visa which offers 2 points per dollar spent on travel and dining. I need a Visa, there are plenty of merchants still that don’t take American Express. And I travel outside the U.S. so I want a card that has no foreign currency transaction fees.
Chase Ultimate Rewards is the other major currency with the greatest value, points transfer to several airlines (United, British Airways, Korean, Southwest) and hotels (Hyatt, Marriott, Ritz-Carlton, Priority Club) as well as Amtrak.
The card offers 40,000 points after $3000 spend within 3 months, and waives the annual fee the first year.
The true answer to ‘which card is best for spending?’ (when that spending isn’t being used to meet the requirements of a signup bonus) is ‘it depends’. It depends on your personal circumstance and what you spend the most money on. So while the advice above probably works best for 99% of consumers, I wanted to address some specific cases that alter the advice for the other 1%.
If you are willing to buy American Express Prepaid cards and add value to them via reloadable cards purchased at Office Supply Stores: Chase Ink Bold Charge Card and Chase Ink Plus Credit Card because you can leverage the 5 points per dollar on office supply store purchases that these cards offer into 5 points per dollar on all purchases. .
If you purchase $30,000 or more in airfare or groceries: American Express Premier Rewards Gold offers 3 points per dollar on airfare purchases and 2 points per dollar on gas and groceries. When you spend $30,000 on the card in a year you earn 15,000 bonus points. I have this card, I hit the $30,000 spend on airfare, so it plays a key role in my wallet. The reason I say this card makes sense if you’re going to hit $30,000 in a year in spend is that while the annual fee is waived the first year, it’s $175 after that. A great card for year one, afterwards it really only makes sense if you’re using it heavily as the threshold spending bonus is worth well more than the annual fee. (And as an aside, the American Express Blue Cash Preferred offers 6% back on groceries — get the card before November so that you have a full year in which your 6% cash back is uncapped.)
If all you want is domestic coach travel: Citi Thank You Premier offers 2 points per dollar for 2 years. They match your spending points with flight points. So you earn about a 4% rebate on all of your spend, easily besting cash back cards. So certainly the most rewarding if you aren’t looking to spend your points for premium cabin international travel.
If you spend a lot eating out: Citi Forward Card earns 5 points per dollar on restaurant spend. Dining spend is one of my major categories, and I don’t actually have this card even though I recognize I probably should, I put my restaurant spend on my Chase Sapphire Preferred which earns double points.
If you rent a lot of cars: While the Sapphire Preferred offers double points on travel, including car rentals, if you rent a lot then I like the primary collision damage waiver offered by the Diners Club card (which I use, but is not currently open for new applications) and the United Explorer card. That protects you against the expenses of damaging a rental vehicle, but is not liability coverage — it doesn’t cover what you hit..
If you book a lot of revenue airline tickets online: Travelocity American Express can earn up to 10% cash back on purchases made at Travelocity.com. Me, I’m just not a huge fan of using Travelocity so I don’t go that route.
If you spend a lot on telecommunications — cable TV, cell phones, internet access: The Chase Ink Bold Charge Card and Chase Ink Plus Credit Card earn 5 points per dollar on those categories of spending.
If you make a lot of small purchases in unbonused categories: The Chase Freedom earns 1 point per dollar (more in bonused categories which change each quarter)
plus a 10% bonus and an extra 10 points per transaction if you also have a Chase checking account. (A $1 purchase earns 12 points.) (Update: Extra 10% bonus + 10 points may no longer be available to new customers.) And if you have a Chase Sapphire Preferred, Ink Bold, or Ink Plus card you can transfer the points earned over to those card programs and the points become transferrable to airline miles and hotel points.
If one of the above ‘if you’ exceptions applies to you, then a specific strategy will suit you best. But for the 99% of folks, the one-two punch of Chase Sapphire Preferred and Starwood American Express is a hard to beat combination.
Editorial note: any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either.