Sometime last spring, I discovered the benefits of credit card points and how useful they can be. While I don’t travel for work and I don’t dine out nearly as much as I used to (thanks, Reese!), I still have a pretty solid income of credit cards points and cash back each month.
There’s no “best card” that blankets everyone. It depends on your spending habits, your goals, and your comfort with annual fees. When I talk to friends now who want to get a points card, their first concern is almost always that annual fee that comes along with most rewards cards.
I started with two cards. I updated my free American Express Blue account to the Blue Cash Preferred, and I picked up the hot new card on (seemingly) everyone’s wish list, the Chase Sapphire Preferred. The former was a direct offer from Amex, they gave me no annual fee in the first year and a $150 statement credit for the upgrade. I get 6% back on groceries and 3% back on gas. While the gas isn’t much better than what’s out there (I’ll talk more about that later), the 6% back on groceries means we see $30-$40 a month back on a groceries and gasoline for the two of us. Once Reese starts eating real food and the other baby (or babies? yikes) come along, this number could go up quite a bit.
The Chase Sapphire came with a 50k point bonus plus another 5k points for adding a (free) second authorized user. Easy. We used out bonus to pay for a couple flights to Jamaica, and had to throw a couple hundred on top for all the taxes, fees, and fuel charges. Still, about $800 in value for just opening the card and spending $4k in 3 months on it. You can read about it basically anywhere online, but Chase’s Ultimate Rewards seem to be to be the most flexible and valuable points around. You can transfer to a whole host of airlines, hotels, even local travel-related businesses at 1.25% redemption value. We booked our coach from Montego Bay’s airport to the hotel using UR points, so nothing out of pocket and $40 in ‘points’ covered $50 cash value. This card comes with a $95 annual fee after the first year, but when you look at the benefits, you’d basically have to get the card, get your bonus, and then do nothing for 11 years before it becomes a negative investment. There are some other awesome benefits (trip cancellation insurance, rental car insurance, no foreign transaction fees) that you can read about on your own on this thing we call the internet.
Chase Sapphire also has a ‘Reserve’ version, where you get 1.5% return when you cash points in, 3X on travel and dining (up from 2X with the Preferred), a $100 Global Entry credit, a $300 travel credit good for most travel, Uber, plane tickets, whatever, and a Priority Pass membership for airport lounges all over the world. However, the $450 annual fee scared me off as a noob to the points game. I do think when I’m eligible for the 50k bonus again (24 months from when I opened my Preferred) I’ll go ahead and pick up the Reserve and close out my Preferred. Oh yeah, and they’re both sturdy metal cards….kinda fun.
I also grabbed a Chase Freedom Unlimited card, which gives an unlimited 1.5X points on all purchases, no matter what. Yes, you see commercials for 2% cash back with other issuers, but these points work with my Sapphire to give me the 1.25% redemption bonus, and its MUCH easier to find outsized value in points than it is cash. One of the biggest annoyances is trying to figure out which card to use when, and there’s no great way to do it. With the Unlimited, you have a safe fallback for your Amazon purchases, utility bills, nail appointments, and whatever else doesn’t fall into a bucket. For a card without an annual fee, this is a low-investment jump into the points game. I even talked my mother into picking up a Freedom Unlimited last week- I wouldn’t steer her wrong!
I’ve had the standard Chase Freedom in my wallet seemingly since I was born, but I never really started using it until this year. The card’s main draw is its 5X rotating categories. For Christmas, it was Walmart and Chase Pay; from now through March we’re getting 5X points at gas stations, internet/phone/cable services, and all of the Chase/Apple/Android/Samsung ‘this is the future’ payment systems. Again, I can combine that with my Sapphire access for 1.25% returns when I cash the points in. No annual fee on the Freedom, so another worthwhile pickup.
I’ve grabbed a few airline credit cards along the way, but since I only travel a handful of times a year (and usually with the company who is running the best deal), almost all of my spend will be on these four cards. Given Chase’s huge list of travel partners, my plan is to transfer points to the airlines when I need to use them, instead of accruing points on an airline I may not use for years.
If I was starting fresh and I didn’t want to mess with big annual fees, I’d grab the three Chase cards here and just deal with the $95 annual fee from the Sapphire….and if I was in a generous mood, I’d use the referral links above! You don’t get the transfer ability or the 1.25% redemption bonus without the Sapphire, but using all three together you could easily pull in a couple thousand dollars a year, even more in year one with signup bonuses.