May 21st, 2013
I have several dozen active credit cards (heck I have more than 2 dozen active cards just from AMEX and Chase) but only a handful are actually regularly used. People always ask me which card is “best.” Unfortunately there is no best card out there but by determining the value you get from spending you can figure out which cards will be best for you.
Some of the cards that I have that typically gather dust include The Platinum Card® from American Express and The Business Platinum Card® from American Express OPEN which have awesome benefits ($400 fee refund, global entry, 2 lounge membership programs, Starwood Gold status, etc) but aren’t what I would use for spending on a daily basis because of the lack of bonus categories. The Gold Delta SkyMiles® Credit Card from American Express and Gold Delta SkyMiles® Business Credit Card from American Express may give free luggage, but you can do better by spending on Starwood and transferring miles to Delta with a 25% bonus (though I sincerely hope you don’t.)
The Chase Chase British Airways card has a fantastic signup bonuses, but they’re just not compelling cards for my spending as their point values can’t compare with more valuable cards.
The Barclaycard Arrival World Mastercard has a very nice signup bonus and 2.2% back for spending isn’t bad for most people’s needs, but I personally prefer earning airline miles. I prefer real airline miles (or points transferable to real airline miles like American Express Membership Rewards, Chase Ultimate Rewards, or Starwood Starpoints) because they allow me to book expensive last minute domestic tickets that can otherwise cost over $1,000 for 9,000 miles or even less. I’d have to shell out over 100,000 bank miles for such a ticket. I also love airline miles because I can take business and first class trips that I could otherwise never afford. Spending $20,000 to fly in a suite is ludicrous but using 110,000 airlines miles is a steal. I’d need some 2 million bank miles to pull off such a trip!
Here are the cards that I consider to be my Most Valuable Plastic as they’re the ones I go to depending on the purchase type. Below I will endeavor to explain my target value system for each currency and how that helps me determine where every single one of my purchases is made in order to always maximize the value I get from every purchase.
-Chase Ink Bold Charge Card and Chase Ink Plus Credit Card
What’s great? The 50K signup bonus is fantastic of course and you can get both of these cards for each business that you run to keep expenses for each separate.
But what really shines on these cards are the bonus categories which is where I primarily use this card.
You earn that on internet/cable service and telecom purchases, so that’s a nice rebate when you purchase a new cell phone an off your cable bill. More importantly you also earn 5 points per dollar at office supply stores. With hundreds of gift cards sold by office supply stores you can earn a ton of miles for anything from buying gas, online shopping on Amazon or Groupon, buying clothes from Gap Inc, Kohl’s, Macy’s, Marshalls/TJMaxx, or Nordstrom, and much more. Plus you can buy $200 Visa gift cards that earn 1,000 points and can be uploaded to Bluebird or used for cash back, bill pay, money orders, etc.
Gas and dining purchases earn 2 points per dollar.
Fringe Benefits: No foreign transactions fees, 2 free lounge visits per user even on free additional user cards.
In dollar terms: I value Ultimate Rewards points at a minimum of 1.9 cents per dollar, so 5 points per dollar purchases mean a 9.5% rebate. 2 point per dollar purchases would mean a 3.8% rebate. I use this card for all of the 5x categories and for gas. I don’t use the card for 1 point per dollar purchases as they only earn 1.9%.
Yes, the Ink cards are business cards. But anyone can open a business (a little side income never hurts!) and there are several huge advantages that business cards have over consumer cards as you can read here.
For example if your name is Joe Smith and you want to sell or you do sell items on Ebay or on Amazon, or if you have any other side business/hobby and want a credit card to better keep track of business expenditures you can just open a business credit card for “Joe Smith Sole Proprietorship” as the business name. You don’t need to file any messy government paperwork to be allowed to do that.
Just be sure to select “Sole Proprietorship” as the business type and just use your social security number in the Tax Identification Number field as well as in the social security number field.
But most importantly the Ink cards are rare in that they offer awesome offer signup bonuses and awesome spend bonuses which makes them the current kings of the credit card world.
-Chase United Club
From the United Explorer card you can click on the Club tab.
What’s great? I get this card free via SM but normally there’s a hefty $395 fee meant to cover the full United lounge membership, 2 free checked bags per person, and waived award expedite/close-in fees.
From a spending standpoint this card is great for everyday purchases as you earn 1.5 miles per dollar on everything.
While other cards offer more points per dollar on car rentals this card and the United Explorer card offer free primary car rental insurance in almost every country in the world besides Israel. In other words if you dent your rental car on other credit cards you’ll have to file a personal insurance claim and only if that’s rejected will the credit card coverage kick in. With the United cards you won’t have to ever inform your personal car insurance of the accident.
Fringe Benefits: Non-expiring miles, expanded saver, and last seat standard award availability.
In dollar terms: I value United miles at a minimum of 1.8 cents per dollar, so 1.5 miles per dollar mean a 2.7% rebate everywhere. I use this card for most purchases over $25 unless I’m trying to hit spend thresholds elsewhere, the purchase is in a bonus category elsewhere, or it’s a purchase that I want to be covered by AMEX’s awesome purchase protections.
It’s worth bearing in mind that if you spend $25,000 in a year on the the United Explorer card that you get a 10,000 mile bonus, meaning that you will have earned 1.4 miles per dollar (2.52% at 1.8 cents per mile), or nearly as much as on the Club card if you stop spending there.
What’s great? On all versions of this fee-free card you get 5 points per dollar in rotating categories. Currently that includes Restaurants, Movie theaters, and Lowe’s. In July it will be Gas stations, Theme parks & Kohl’s. Lowe’s also sells gift cards to hundreds of other stores, which means you can earn 5 points per dollar there as well.
There are also 2 versions of Exclusives programs on this card if you also have a Chase checking account. The old program gives 10 bonus points monthly per transaction and 10% bonus points monthly on base spending. The new program gives 10% bonus points annually but it’s good even on bonus spending, so that means 5.5 points per dollar in the rotating categories. The catch here is that the bonus points are limited to $1,500 in spending per quarter, but if you’re like me and downgrade Sapphire cards into Freedom cards then you probably have a few cards and don’t need to worry about that.
In dollar terms: I value Ultimate Rewards points at a minimum of 1.9 cents per dollar, so 5 points per dollar purchases mean a 9.5% rebate. I have the old Exclusives program so on a $10 purchase in a bonus category I earn 61 points or a 11.59% rebate. Of course when I send a penny via Google Wallet I earn 11 miles or a 2,100% rebate
I use the card for all the 5x category purchases and for everyday purchases under $25 as a $20 purchase for example earns me 32 points or a 6.1% rebate. When the everyday purchase is more than $25 I shift over to United Club which will offer more miles per dollar in those cases.
-Chase Sapphire Preferred
What’s great? The 40K signup bonus is pretty great of course, but there are a plethora of bonus categories with this card to take advantage of.
-You earn 1.07 points per dollar spent and 2.14 points per dollar spent on restaurants, airfare, hotels, car rentals, charges in airports, travel agencies, caterers, timeshares, trains, buses, taxis/limos, ferries, bridges, tolls, and parking. On the first friday or every month you’ll earn 3.21 points per dollar on dining.
Fringe Benefits: No foreign transactions fees, no phone-tree to speak to a live rep, plus the heavy metal card is sweet looking. Convert the card to a Mastercard and you’ll get free primary car rental insurance in Israel.
In dollar terms: I value Ultimate Rewards points at a minimum of 1.9 cents per dollar, so 3.21 points per dollar purchases mean a 6.1% rebate. 2.14 point per dollar purchases would mean a 4.45% rebate. I use this card for the 3.21x and 2.14x categories except for airfare which typically goes on AMEX and car rentals go on United though if I have time I’ll switch the car rental from United to Sapphire Preferred at the end of the rental (assuming I didn’t damage the rental car of course ). I don’t use the card for 1.07 point per dollar purchases as they only earn 2.03%.
-Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Credit Card from American Express
What’s great? This used to be the best card out there. Now it faces serious competition. Still nothing ever comes close to the AMEX protections so whenever I buy an item that I might need to return, may need extended warranty coverage, is a final sale item, or that is from a merchant where it may need to be disputed this is my go-to card. Sure you only get 1 point per dollar but really that’s 1.25 miles per dollar as 20K points converts into 25K miles with dozens of airlines. Or use the points for hotel stays with no capacity controls at high values. On the business card you also get Open Savings benefits which means cash back on top of points at places like Hyatt, Hertz, HP, Microsoft, Fedex, OfficeMax.com, Barnes & Noble, and more. That means it’s better to use your Starwood card at a domestic Hyatt over a Hyatt card.
Fringe Benefits: Having the card entitles you to room upgrades and 4pm late checkout. It also gives you credit towards earning lite status. Plus for the past 3 years AMEX has allowed you to spend $25 for free on Small Business Saturday. Free additional user cards also qualify for the $25.
In dollar terms: I value Starpoints at a minimum of 2.2 cents per dollar (which means I value the miles I get from the points at 1.76 cents per dollar), so 2 point per dollar purchases mean a 4.4% rebate and 1 point per dollar purchases mean a 2.2% rebate. I use this card at Starwood hotels, on purchases that qualify for Open Savings, and for any purchases that may need any of the AMEX purchase protections.
-American Express® Premier Rewards Gold Card and The Business Gold Rewards Card® from American Express OPEN
What’s great? The business card currently has a 50K signup bonus (bumpable to 75K) The kicker with these cards are the bonus categories. Both offer 3 points per dollar on airfare. The consumer card offers double points on gas and groceries. The business card offers double points on advertising, shipping, and gas.
Fringe Benefits: You can get a 15K annual point bonus on the consumer card by spending $30K in a year. AMEX MR runs promotions throughout the year like the current 35% bonus for transfers to British Airways.
In dollar terms: I value Membership Rewards points at a minimum of 1.5 cents per dollar, so 3 point per dollar purchases mean a 4.5% rebate, and 2 point per dollar purchases mean a 3% rebate. Don’t forget that if you can get to $30K spend that you’ll bump those numbers significantly. I use the consumer card for airfare and groceries. The Ink cards are better for gas whether you buy gas gift cards or pay at the pump.