Update: This offer for the Starwood Preferred Guest® Credit Card from American Express has expired. Learn more about the current offers here.
For those in the US with a good credit score, doing everything you can to maximize your return on everyday spend is a no brainer. You’re leaving points (or in many cases, cash) on the table by not doing so.
Credit cards are the primary way I rack up miles & points, between the great sign-up bonuses they offer, along with the return on everyday spend.
A couple of weeks back I wrote about the credit cards in my wallet, which I hold onto for a variety of reasons. Some are cards I got for their great return on everyday spend, while others are cards I got for their ongoing perks.
For example, the Citi Prestige® Card offers 3x points on airfare and hotels. The Ink Business Cash℠ Credit Card offers 5x points on office supply stores and more. The Amex EveryDay® Preferred Credit Card offers up to 4.5x points on US supermarket purchases.
In this post I figured I’d cover the five most rewarding credit cards for everyday, non-bonused spend, given the cards which have recently been introduced. In other words, these are cards which I think are most rewarding for spend which doesn’t otherwise fall in another bonus category.
I should also clarify that the calculations of return on everyday spend are based on my valuation of those points — others may very well value the return on these cards differently based on their redemption patterns, which is fine.
With that in mind, here are what I consider to be the top five cards in terms of return on everyday, non-bonused spend:
Return on spend: 2.55%
Annual fee: $95
F0r a long time this has been my “go to” card for the best return on everyday spend. The card accrues Membership Rewards points, which I value at 1.7 cents each (which I tend to think is a conservative valuation). On top of that you earn:
- 3x points at US supermarkets on up to $6,000 per year in purchases
- 2x points at US gas stations
- 50% more points when you use your card on purchases 30 or more times in a billing period
In other words, assuming you make 30 transactions per billing cycle (which I suspect most people should be able to do, as that’s roughly one purchase per day), you’re earning 1.5 Membership Rewards points per dollar spent. At a value of 1.7 cents per point, that’s a return of 2.55%.
That’s a fantastic return, especially since the card accrues “real” Membership Rewards points, and you don’t need another card to be able to transfer those points to partner programs.
Return on spend: 2.55%
Annual fee: none
This is Chase’s newest entrant into the market, and is clearly intended to compete with the Amex EveryDay® Preferred Credit Card.
The Freedom Unlimited Card is advertised as offering straight 1.5% cashback. If it’s cashback you’re actually after, this isn’t the card I’d recommend getting. You’re better off with something like the Citi® Double Cash Card, which offers 1% cash back when you buy, and another 1% cash back when you pay for your purchase.
However, what’s fantastic is that the rewards earned on this card can be converted into Ultimate Rewards points, at a rate of one point per cent. In other words, this card offers 1.5 Ultimate Rewards points per dollar spent, but only if you also have either the Chase Sapphire Preferred® Card or Ink Plus® Business Card.
Starwood Preferred Guest® Credit Card from American Express
Return on spend: 2.2%
Annual fee: $95 (waived the first year)
On a per point basis, I consider Starpoints to be the single most valuable points currency out there, given how flexible the points are. They can be redeemed efficiently for hotel stays, airline mileage transfers, etc. So while the SPG Amex offers just one point per dollar spent, each of those points is worth a lot.
Return on spend: ~2.1%
Annual fee: $89 (waived the first year)
This card offers two miles per dollar spent. Each mile can be redeemed for one cent towards the cost of a travel purchase, and you get a 5% refund on redeemed points. In other words, each mile is really worth ~1.05 cents, so when you’re earning two miles per dollar spent, you’re earning a return of ~2.1%.
Return on spend: 1% + 1%
Annual fee: none
In terms of straightforward cashback cards, this one is pretty tough to beat. You earn 1% cash back when you buy, plus 1% cash back as you pay for those purchases. For a no annual fee card, that’s incredible.
Ultimately there are several components to maximizing your return on everyday spend, which is why a lot of us have several credit cards. Your strategy should differ based on how much you spend and also based on how much you’re paying in annual fees. For example, even though I spend quite a bit and maximize the bonuses pretty well, I’m thinking of canceling a couple of cards.
But just about everyone should have at least one card which is earning them the equivalent of a 2% return on spend, whatever form it may come in.
If you prefer rewards where you can get outsized and aspirational travel, consider the Amex EveryDay® Preferred Credit Card, Chase Freedom Unlimited®, or Starwood Preferred Guest® Credit Card from American Express. If you prefer cashback towards travel, consider the Barclaycard Arrival Plus™ World Elite Mastercard®. If you prefer straight cashback, consider the Citi® Double Cash Card.