Three Types of Credit Cards: Spender, Benefits, and Bonus Only

credit cards

In my opinion there are three types credit cards: spenders, benefits and bonus only. What do I mean by that? In short here are my definitions:

  • 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.


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.

The most valuable points in my opinion in rank are:

  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.


A few credits on the market offer fantastic perks though don’t offer the best return on spending. These credit cards will offer benefits such as elite hotel status, airport lounge access, free annual hotel nights, and more. An example would be the Chase Hyatt card, which offers a free night every year. The card does carry a $75 annual fee, though the free night certificate will likely earn you a free night worth at least $100 to $150 making it worth it to pay the annual fee.

Bonus only

Bonus only cards are credit cards that offer great sign up bonuses but don’t offer much value after receiving the sign up bonus. The aim with bonus only cards are to apply for the cards, earn the sign up bonus, then cancel the card after the annual fee hits after the first year. An example would the Amex Delta Gold card, which routinely offers a 50,000 sign up bonus but only earns 1 point per dollar on spending.

So what are cards are spenders? and what are bonus only? Stay tuned for my list soon!

-Points Tutor