If You Could Only Use One Credit Card For Everyday Spend…

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Reader Stephanie asked the following question in the Ask Lucky forum:

We’ve been exclusively using Barclays Mastercard as our every day spend and travel card. Hardly ever use Sapphire Preferred as we like to have one card that we both use as opposed to multiple cards. We have liked using this Mastercard. Is there any reason we should switch to Preferred or Reserve? What do you think of the Barclaycard Arrival Plus as THE primary card for everyday use?

This is an interesting question, largely because Stephanie talks about how she likes to have only one card that they use, rather than multiple cards. As I started crunching the numbers on this question, I was surprised by the conclusion I came to. I’ll share my thoughts on her situation, and see if I can’t slightly convince her to maybe use a two card strategy rather than one card strategy.

The Barclaycard Arrival Plus is a solid choice for everyday spend

The Barclays Arrival Plus® World Elite Mastercard® is a solid choice for everyday spend — the card has a reasonable $89 annual fee, offers 2x miles per dollar spent (in reality each “mile” can be redeemed for one cent towards the cost of a travel purchase), has no foreign transaction fees, and offers 5% of your miles back every time you redeem.

The way I view it, the card offers the equivalent of a ~2.1% return on your spend, give or take. That accounts for the 5% of your miles that you get back every time you redeem.

That’s a pretty solid return on spend, though at the same time the lack of bonus categories isn’t ideal, given how many points other cards offer on things like gas, groceries, dining, travel, etc.

Would the Chase Sapphire Preferred or Reserve be more rewarding?

The Chase Sapphire Preferred® Card offers double points on dining and travel, while the Chase Sapphire Reserve® Card offers triple points on dining and travel:

  • Points earned on the Sapphire Preferred can be redeemed for 1.25 cents each towards the cost of a travel purchase
  • Points earned on the Sapphire Reserve can be redeemed for 1.5 cents each towards the cost of a travel purchase

In other words:

  • With the Sapphire Preferred you get a return of 2.5% on dining and travel, and 1.25% on other purchases
  • With the Sapphire Reserve you get a return of 4.5% on dining and travel, and 1.5% on other purchases

In my opinion you can get more value out of Ultimate Rewards points by transferring them to an airline or hotel partner, though the reality is that this isn’t how many (probably most?) people redeem their points. Given that Stephanie currently uses the Barclaycard Arrival® Plus World Elite Mastercard® (which is essentially a cash back travel card), I’m going to assume she’s seeking those kinds of rewards, so we’ll do the math based on that.

I’m actually surprised to be writing this, but as I do the math, I’m not convinced that the Chase Sapphire Preferred® Card or Chase Sapphire Reserve® Card would be a better option if the goal is to use a single card and maximize cash back travel rewards. Getting a ~2.1% return on the Barclaycard Arrival Plus seems more compelling than getting a return of 1.25% on everyday spend and ~2.5% on dining and travel, and given the higher annual fee of the Sapphire Reserve, I’m not sure she’d come out ahead there either.

How much better could you do with two credit cards?

Just for giggles, I think it’s worth mentioning that there are circumstances under which Stephanie would come out way ahead with the Chase Sapphire Reserve® Card if she were willing to get a second card. I’ve written in the past about the best credit card duo for maximizing points. The Chase Freedom Unlimited® has no annual fee and offers 1.5x points on everyday purchases, and if you have it in conjunction with the Chase Sapphire Reserve® Card, then you could convert those points into Ultimate Rewards points. If you had both of those cards you’d earn 3x points on dining and travel, and 1.5x points on everything else, and each point could be redeemed for 1.5 cents towards the cost of a travel purchase. That translates to a return of:

  • 4.5% on dining and travel
  • 2.25% on everything else

That’s an incredible return to get on your credit card spend, and to me it absolutely makes it worth complicating your credit card strategy slightly and picking up a second card. However, I understand that some people place a big premium on simplicity, and only want one card.

Bottom line

If you just want straight travel cash back rewards and only want a single credit card, then I think the Barclaycard Arrival® Plus World Elite Mastercard® is a great option (especially if you don’t spend a disproportionate amount of money on dining and travel). I’m actually surprised to come to that conclusion, given that I generally think that the Chase Sapphire Preferred® Card and Chase Sapphire Reserve® Card are near “one size fits all” products.

However, if Stephanie were willing to complicate her credit card strategy slightly, and get the Freedom Unlimited in addition to the Sapphire, then I think picking up the Chase Sapphire Reserve® Card becomes a no brainer.

Does anyone have a different take on this than I do?

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Comments

  1. I would think the Citi Double Cash is a better choice. 2% return with no annual fee. Plus you can cash out at $25 as a statement credit instead of 100 increment and only for travel.

  2. Why you left out the AMEX Business Plus? It gives you 2X in everything up to $50K and has no annual fee…. I wonder, is it because you do not get an incentive from AMEX?

  3. Yeah, Citi double cash is the easy winner here with no annual fee (if hell bent on using only one card). Don’t forget the excellent price protection, purchase protection, and extra two years of warranty protection. Guess there’s no referral bonus for it though so no point in mentioning it.

  4. If one only wanted to hold and use 1 card, they should still go with the Reserve/Unlimited combo. By your measurements above, even if they only ever used the Unlimited, they’d still get 2.25% back. They could sock drawer the CSR and still get the benefits when needed.

  5. Kai is correct with the Double Cash. I recommend this card to friends all the time. It is easier to redeem and no annual fee. I have the Arrival+ and redeeming is a pain. Things have to code as travel which you have no control over. When you figure in the annual fee the Arrival+ is not a compelling card at all. Maybe for the first year than downgrade to regular arrival. Still no FTF and Chip and Pin but no annual fee. I will keep mine for just this reason as I need the Chip and Pin in Europe. For people who aren’t going play the game a simple no annual fee 2% cash back card is unbeatable otherwise you can not offset the annual fees.

  6. If I could fly on only one plane, would it be a Q400 or Q400NextGen? I think it might be a 777-200LR but I see how one could choose the A318 because quite a few airports can’t handle a 777.

    Using 2 or even 3 cards is not hard. One simply writes on the “activate card sticker” what you use the card for. One could write “travel”, “gas”, “general use” or whatever one’s strategy is. If one like neatness, one could carefully peel off the sticker and stick it on the back of the card.

  7. if you have the balance, hard to beat the 2.625% off the BofA Premium Rewards. Have found myself putting a ton on it, especially since that reward rate is higher than the 2.5% Plastiq fee.

    (The hard part is the minimum for Platinum Rewards – although investment balances count through Merrill Lynch, which might make it more palatable…)

  8. Out of curiosity, why is no one (other than the initial reviews) talking about the Barclay UBER card? The categories for cash back are among the strongest (if not the best) for a no annual fee card. Plus the additional features seem like a no-brainer to me.

  9. For most everyday purchases, I like the Amex Everyday Preferred Card. Amex May have fewer travel partners than they used to, but, with 30 swipes a month, my triple points for groceries and double points for gas are multipled again by 50%, yielding 4.5x points for groceries and 3 pints for gas. I supplement it with the Chase Sapphire Preferred Card for travel and dining, and the annual fees for each card is only $95.

  10. Limitless Cashback Rewards from USAA for 2.5% on all purchases, redeemable for anything, no annual fee, not limited to travel purchases only like Barclaycard and with a much lower redemption threshold to boot. And of course, no foreign transaction fee. It has actually just recently replaced my Barclaycard for non-bonused spend. No signup bonus, but then I burned through the sign up bonus on the Barclaycard a long time ago anyway. So, why not get the Barclaycard first, burn the spend bonus, then switch to LCR? That assumes you have access to USAA though…

  11. B of A Premium Rewards is unbeatable if you are Top Tier Preferred Rewards. 3.5% on Travel and Dining and 2.625% on everything else. Doesn’t accumulate miles but for those of us who want to be able to cash out the points it’s great. Oh and not to forget the $100 calendar year incidental travel credit which I’ve now used to purchase two AA Gift Cards. B of A is paying me to use the card since the AF is only $95.

  12. One consideration is that over utilizing your card can negatively affect your credit score. Even if you pay it off every month, using more than 50% of your available credit will generally pull your score down. I have multiple cards, but I try never to use more than 25% of the credit line to keep my score up.

  13. @Michael

    Utilization only matters if you let the statement close with the balance higher than 30%. You can max the card the whole month, as long as you pay it off before your statement closes, you’re good to go.

  14. It comes down to using the miles, one AA and the other United,

    AA awards are had to find, and YA seems to be the prefered one here,

    5 X with INK, Sapphire

  15. sounds like everyone has better options than the one presented here… I wonder if the affiliate kickback is part of the equation.

    As always, it depends what your goals are. For me, UR points are incredibly valuable for booking business and first awards to Asia. So that’s where I put most of my spend.

  16. Nice C-130 pic! Spent many hours in the front office bunk flying with an augmented crew. Almost as good as First, but got paid for it!

  17. @ JD — Because it’s a business credit card, and most consumers aren’t comfortable using a business credit card for personal purchases.

  18. Lucky is always so patient but if you have followed this site for even a short time the answer is extremely obvious. You’re either looking for cash or you’re looking to travel.

    CSR/Unlimited & AMEX EDP/AMEX BB+ max points & gets tons of travel options for air & hotels and there is no comparison with sending cash versus points to get get travel benefits all over the world. If four CC’s are overwhelming use the Dave-Canada method.

  19. Absolutely correct, but the banks don’t furnish info to the bureaus at the same time each month, and may furnish multiple times in the month. So, timing a payment can be difficult.

  20. We currently split dining/travel and my occasional non bonus spend on CSP and our monthly recurring plus routine ‘other’ spend (e.g. groceries, gas, anything other than travel/dining) on Citi Double Cash. The CSP accumulates for a hopeful 2019 redemption at Park Hyatt St. Kitts. The Citi DC gets deposited to our Schwab brokerage to be invested (over $2k in 2 yrs). Not your typical miles and points strategy but meets our needs.

  21. The real question – if you were wealthy, would you still be in the miles game, or would you just focus on the earnings and just pay cash for whatever you wanted?

    There’s a big opportunity cost to this arbitrage.

  22. @ Lucky – I partly agree with your assessment of the situation. By “everyday” purchases I assume you are referring to those that would issue one point per dollar. Travel and dining should go on the Reserve card, without a question, because of more than 3 points per dollar there (50% bonus when you redeem for travel), but it depends on where you use the points. The Reserve card would give the most flexibility with redemption especially with the 50% bonus when redeemed for travel, BUT I would argue if you stay at Marriott hotels often, and if you are not worried that Marriott will devalue their points any time soon, if you could only spend on one card it could be SPG Amex because of the 1:3 conversion to Marriott. Therefore, on purchases that offer one point with other cards, Marriott is basically giving three. With this said, if you care about flexibility, do not stay with Marriott often, or you are scared they will devalue their loyalty points sometime soon, then the Reserve card is best. It is important to recognize, most members just have a few cards that they routinely use.

  23. (& if pressed to narrow to just one, SPG AMEX – no other card touches 2.7/point or their premium for transferring points to airline partners)

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