Helping A Reader Optimize Their Credit Card Strategy

A lot of people post in the Ask Lucky forum asking for guidance to help maximize their credit card rewards. User lbs57 asked the following question a few days ago:

Hi – We live in Houston but don’t always fly United – finding ourselves flying other airlines more and more overseas. My husband and I usually fly together – we both have Amex platinum cards (he is thinking that we need to cancel one and have one gold) We also have United Pres. Plus Master Card and I recently got the Mileage Plus Explorer for myself. (not sure if that was a good choice) We spread out our spending on all the cards – are we too heavy in the United card area? We spend quite a lot monthly on credit cards but never really seem to get much out of it mileage wise. Seem to not be doing something right – any suggestions?
Thank you!

While this is a specific question, I think a surprising number of people find themselves in similar situations. They spend a lot on their credit cards, but they’re not getting all that much out of their rewards. What I like about the above situation is that it’s quite easy to point at some easy opportunities for improvement.

To make this easy, let me give a few specific suggestions of how the above credit card strategy could be greatly improved:

Spend less on the Amex Platinum Card

I’m a big fan of The Platinum Card® from American Express (Rates & Fees) for the perks that it offers, including a $200 airline fee credit, $200 Uber credit, Centurion Lounge access, Delta SkyClub access, Priority Pass membership, hotel status, and more. However, just about the only money I spend on this card is on airfare, as the card offers 5x points on airfare purchased directly with airlines (on up to $500,000 of flight purchases per calendar year, and then 1x). (Enrollment is required for select benefits)

You should decide for yourself if the card is worth the annual fee to you for the perks, but you shouldn’t be using this card for your actual credit card spend, as you could be earning at least 50% more rewards.

If you want to earn more Membership Rewards points, consider the Amex EveryDay® Preferred Credit Card from American Express, which offers 3x points at US supermarkets (on up to $6,000 of spend per year) and 2x points at US gas stations, plus a 50% points bonus when you make at least 30 transactions per billing cycle. That means you earn up to 4.5x points at supermarkets, up to 3x points at gas stations, and up to 1.5x points on other purchases. Yes, you’d legitimately be earning at least 50% more points on virtually all purchases, since you’d earn 1.5x points rather than 1x points.

If you instead want a no annual fee to complement The Platinum Card® from American Express, consider The Amex EveryDay® Credit Card from American Express, which offers 2x points at US supermarkets (on up to $6,000 of spend per year), plus a 20% points bonus when you make at least 20 transactions per billing cycle. That’s right, this no annual fee card offers 20% more points than the Platinum Card.

Lastly, it could also make sense to consider the American Express® Gold Card, which offers 4x points at restaurants (up to $50,000 in purchases per calendar year and then 1x), 4x points at U.S. supermarkets (up to $25,000 per calendar year and then 1x), and 3x points for flights booked directly with airlines or at AmexTravel.com.

All of these cards should prove more rewarding than the Platinum Card when it comes to the points you earn for your spend.

The information and associated card details on this page for the Amex EveryDay Credit Card and Amex EveryDay Preferred Credit Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.

You could be earning a lot more Membership Rewards points with other Amex cards

Spend on the Sapphire Reserve instead of the United Card

Lbs57 has two United credit cards, but notes that they don’t always fly United. Assuming you don’t have elite status with United and aren’t going for some sort of an elite waiver, you’re much better off putting spend on either the Chase Sapphire Reserve® Card or Chase Sapphire Preferred® Card:

• The Reserve offers 3x points on dining and travel
• The Preferred offers 3x points on dining and 2x points on travel

Why is this a better strategy? Because these points can still be transferred at a 1:1 ratio to United, though you’ll be earning a lot more points this way. On top of that, having this card gives you a lot more flexibility, as you can also transfer your points to many other programs. On top of that, you can redeem the points as cash towards the cost of a travel purchase — if you have the Chase Sapphire Reserve® Card you can redeem points for 1.5 cents each towards a travel purchase, and if you have the Chase Sapphire Preferred® Card: you can redeem points for 1.25 cents each towards the cost of a travel purchase.

Personally I’d dump the two United cards (unless you’re getting value out of the perks), and get one of these cards instead.

Ultimate Rewards points can be transferred to many programs other than United MileagePlus

Consider a cash back card

Since it’s mentioned above that they never really seem to get much value out of their miles, I do think it makes sense to do an analysis and decide if a cash back credit card might be more rewarding for you. You should be earning a return of at least two cents on every dollar you spend. That’s because the alternative to any of these cards is something like the Citi Double Cash® Card, which is a no annual fee card that offers 1% cash back when you make a purchase, and then an additional 1% back when you pay for that purchase (in the form of ThankYou points).

Points can be complicated to redeem, and I’d guess that most people collecting points aren’t actually getting a return of better than 2% on their spend. So this is a worthwhile option to consider.

With a cash back card you have even more flexibility with how you can redeem your points

Bottom line

I find lbs57‘s credit card strategy to be a surprisingly common one. People have had the Amex Platinum Card for years, and assume it’s great for their spend. Furthermore, they assume that because they often fly an airline, they should get a card from that airline and spend money on it. In the above situation one could easily earn way more miles with just one or two additional cards, and possibly even canceling a few existing cards. As a last resort, it could make sense to switch to a cash back card, for the simple, no strings attached rewards that they offer.

The following links will direct you to the rates and fees for mentioned American Express Cards. These include: The Platinum Card® from American Express (Rates & Fees).