Update: These offers for the Amex EveryDay® Credit Card and the Barclaycard Arrival Plus® World Elite MasterCard® have expired. Learn more about the current offers here.
Credit cards are the primary way I earn points, both through the welcome bonuses offered through cards, as well as by maximizing my return on everyday spend.
For someone looking for a simple “one size fits all” credit card strategy, I tend to think you’re best off going with one of the flexible sub-$100 annual fee credit cards.
For example, I’d say the four most useful cards with such an annual fee are the following (all of which I have):
- Chase Sapphire Preferred® Card — Earn double Ultimate Rewards points on dining and travel, plus pay no foreign transaction fees
- Citi Premier℠ Card — Earn triple ThankYou points on travel (including gas), and double ThankYou points on dining and entertainment, plus pay no foreign transaction fees
- Amex EveryDay® Preferred Credit Card — Earn triple Membership Rewards points at U.S. supermarkets (on up to $6,000 per year in purchases), and earn double points at U.S. gas stations, plus use your card 30 or more times on purchases in a billing period and get 50% more points
- Barclaycard Arrival® Plus World Elite Mastercard® — Earn two miles per dollar spent plus receive a 5% refund on redeemed miles; each point can be redeemed for one cent towards the cost of a travel purchase, meaning you essentially earn a return of ~2.1% on everyday spend; also, the card has no foreign transaction fees, and has true Chip + PIN technology
While I think lots of consumers would be best off going with one of the above moderately priced credit cards, I know a lot of people prefer not to pay an annual fee on a credit card.
With that in mind, what are the best credit cards for those looking to maximize everyday spend without paying an annual fee? I think there are two cards which are especially compelling, which offer a return which I value at ~2%:
It just kills me inside when people use 1% cash back credit cards and think they’re getting a good return. If you just want a straightforward card which doesn’t have an annual fee, it’s tough to beat the Citi® Double Cash Card. It offers 1% cash back when you make a purchase, and 1% cash back when you pay your bill.
Earning the equivalent of 2% cash back after making your payment without paying an annual fee is a fantastic return. And in my opinion a no annual fee card which has this rate of return is what a vast majority of Americans should be putting their spend on.
For what it’s worth, there’s another card which offers the equivalent of 2% cash back, the Fidelity Investment Rewards American Express Card. Though I prefer the Citi® Double Cash Card, because Mastercard has wide global acceptance, and there’s no need to open a Fidelity account in order to collect the cash back.
The Amex EveryDay® Credit Card was introduced last year, and represents a very nice new product offering. It’s the only no annual American Express card which accrues “premium” Membership Rewards points, which can be transferred to airline partners.
Not only can you accrue Membership Rewards points without an annual fee, but it actually has a compelling points earnings structure:
- Earn 2x points at U.S. supermarkets, on up to $6,000 per year in purchases
- Earn 1X points on other purchases
- Use your card 20 or more times on purchases in a billing period and get 20% more points on those purchases
So if you make at least 20 purchases per billing cycle you’re earning 1.2 Membership Rewards points per dollar spent, and then on top of that you’re earning bonus points at U.S. supermarkets. I value Membership Rewards points at ~1.8 cents each, so assuming you’re earning 1.2 Membership Rewards points per dollar spent, that’s like a return of ~2.2%.
Now keep in mind that if you spend a good amount on your credit cards each year, it could make sense to use one of the cards I referenced above. Specifically, it could be worth paying the $95 annual fee and getting the Amex EveryDay® Preferred Credit Card instead. It offers a 50% points bonus rather than a 20% points bonus (when making 30 transactions per billing cycle), and offers more bonus points at U.S. supermarkets, and also bonus points at U.S. gas stations.
For more on that, see the previous post I made comparing the EveryDay and EveryDay Preferred products.
A vast majority of people aren’t maximizing their return through credit card spend. Heck, I probably don’t either, as one could certainly argue I over diversify my credit card spend.
With that in mind, the simplest advice is often the best. You can get a return of ~2% on a credit card with no annual fee. So if you or your family prefer a card without an annual fee, I think the Citi® Double Cash Card and Amex EveryDay® Credit Card are seriously worth considering.