Spender Credit Cards!

credit cards

Recently, I wrote about three types of credit cards; spenders, benefits, and bonus only. A quick synopsis of that article is that I find there are three types of credit cards which are spender credit cards, benefits credit cards and bonus only credit cards.

  • Spenders – Credit cards offer very valuable points return on your spending. These cards are worth to keep around years on end even if they have annual fees.
  • Benefits – Credit cards that you hold on to year after year because of the perks they offer, despite not offering the best return on spending.
  • Bonus Only – Credit cards that offer great sign up bonuses though do not offer valuable return on spend and are not worth paying the annual fee for.

Actual vs Effective Return

Since the credit card market is so competitive these days, companies are offering more and more rewarding credit cards. You should always receive return of at least 2% back on every purchase and any card offering at least 2% back will be considered a spender credit card. On this blog you will often see actual return vs effective return. Actual return is the dollar amount you receive back for each purchase, while effective return shows the dollar amount you receive back times the valuable of the points you received back. Points are often more valuable than their actual return they offer when transferring to transfer partners, using points in a travel portal, and so forth.

Example 1: The Chase Freedom Unlimited earns 1.5 points per dollar and I value Chase Ultimate Rewards points at around 2.0 cents per point. Thus, the Chase Freedom Unlimited earns 1.5% back in actual return, but 3% back in effective return (1.5 x 2).

Example 2: The Citi Double Cash earns 2% cash back on all purchases. Since I can only redeem cash back for cash, I value 1 cent as 1 cent. Thus the Citi Double Cash Back earns 2% in actual and effective return.

From the examples above, we can all agree 3% back is better than 2% and thus the Chase Freedom Unlimited is the better card as long as you can get 2.0 cents or more in value for each Chase Ultimate Rewards point.

Spender Credit Card Requirement

I find any credit card that earns 2% or more back per purchase and earns American Express Membership Rewards, Chase Ultimate Rewards, SPG Starpoints, and cashback (2% or higher) to be Spender credit cards. In the recent couple of years, Citi has made a huge push into the credit card market. I still find their ThankYou points to be lacking in value in comparison to Membership Rewards, Ultimate Rewards, Starpoints and cash back. For now, I place Citi is on my maybe spender list.

Points Valuations

  1. American Express Membership Rewards – 2.0 cents
    -Best earning potential, better transfer partners international flights
  2. Chase Ultimate Rewards – 2.0 cents value
    -Great earning potentials, only second to Amex Membership Rewards for not having a great transfer partner for international flight
  3. SPG Starpoints – 2.0 cents value
    -Best hotel redemptions and most airline transfer partners but worst earning potentials
  4. Cash Back – 1.0 cents value
    -Cash is king. Discover and Citi currently both offer fantastic cards offering between 2-3% cash back.

 

Spender Credit Card List

For now, each credit card is linked to it’s public bonus. In future posts, I plan to review each credit card and will link each credit card to it’s review. Remember below are the cards actual returns, take the points values above to get their effective return on spending.

American Express Membership Rewards

American Express Everyday

  • 2x per $1 on groceries, 1x per $1 on everything else
  • Earn a 20% bonus on points when making 20 transactions per statement cycle, earning you 2.4x per $1 on groceries, 1.2x per $1 on everything else

American Express Everyday Preferred

  • 3x per $1 on groceries, 2x per $1 on gas, 1x per $1 on everything else
  • Earn a 50% bonus on points when making 30 transactions per statement cycle, earning you 4.5x per $1 on groceries, 3x per $1 on gas, 1.5x per $1 on everything else

American Express Premier Rewards Gold

  • 3x per $1 on airfare, 2x per $1 on gas and groceries, 1x per $1 on everything else

American Express Platinum

  • 5x per $1 on airfare, 1x per $1 on everything else

 

Chase Ultimate Rewards

Chase Freedom
  • 5x per $1 on quarterly bonus spending categories, 1x per $1 on everything else
Chase Freedom Unlimited
  • 1.5x per $1 on everything

Chase Sapphire Preferred

  • 2x per $1 on travel and dining, 1x per $1 on everything else

Chase Sapphire Reserve

  • 3x per $1 on travel, 1x per $1 on everything else

SPG Starpoints

  • 2x per $1 on Starwood, Marriott and Ritz Carlton hotels, 1x per $1 on everything else

Cashback

Citi Double Cash

  • 2% per $1 on everything
Discover it
  • 5% per $1 on quarterly bonus spending categories, 1% per $1 on everything else

American Express Fidelity

  • 2% per $1 on everything

Maybe Credit Card Spender List

Citi ThankYou

Citi ThankYou Preferred

  • 2x per $1 on dining and entertainment, 1x per $1 on everything else

Citi ThankYou Premier

  • 3x per $1 on travel and gas, 2x per $1 on dining and entertainment, 1x per $1 on everything else

Citi ThankYou Prestige

  • 3x per $1 on travel, 2x per $1 on dining and entertainment, 1x per $1 on everything else

Citi ThankYou Preferred for College Students

  • 2x per $1 on dining and entertainment, 1x per $1 on everything else

Conclusion

Disagree with my list? Comment below.

-Nick a.k.a. Points Tutor