Credit cards could bring you great rewards, often greater than you thought. Typically, there are two ways to earn rewards with credit cards: everyday purchases and sign-up bonus. Credit cards with high sign-up bonus (see Best Credit Card Sign-Up Bonus) are usually not the credit cards you should choose for everyday use, since they often come with annual fees but not so good reward rates. Instead, the credit cards you choose to keep for everyday use should be the ones with great reward rates on your spending categories, and can cover their annual by the rewards they bring.
1. Rotating Category 5% Cash Back
Discover it: 5% Cashback on Rotating Category Every Quarter, $0 Annual Fee.
This card offers 5% cash back on a rotating category each quarter (up to $1,500 spent per quarter).
This card offers 5x Ultimate Rewards (UR) points on a rotating category each quarter (up to $1,500 spent per quarter). You can redeem UR points as cash at 1 cent/point, but the UR points can be even more valuable than their cash value if you have CSP/CSR. UR points are worth about 1.6 cents/point, so 5x UR earning rate is about 8% in return.
Earn 5x ThankYou Points (TYP) in your top eligible spend category each billing cycle (up to $500 spent per month). You can redeem TYP as cash at 1 cent/point, but the TYP can be even more valuable than their cash value if you have Citi Premier. TYP are worth about 1.6 cents/point, so 5x TYP earning rate is about 8% in return.
Besides, there’s another card US Bank Cash+ providing 5% cashback on rotating category every quarter with $0 annual fee. However, it is very hard to get approved, and I suggest newbies avoid this card in the beginning, and wait until you have obtained other good cards you want.
2. Grocery Card
No annual fee, 3% cash back on grocery (up to $6,000 spent per calendar year).
No annual fee, 2x Membership Rewards (MR) points on grocery, 20% bonus if you use your card 20 times or more in a month (which makes the earning rate 2.4x MR). MR points are worth about 1.6 cents/point, so 2.4x MR earning rate is about 3.84% in return. Note that ED is the only credit card with no annual fee that can transfer MR points into airline miles, so it is very highly recommended for those who are interested in points and miles.
AmEx Gold: 4x MR Points on Grocery, $250 Annual Fee.
You can earn 4x MR on grocery, up to $25,000 grocery spending in a calendar year. The annual fee is $250, but it also comes with $10 Uber credit per month and $10 dining credit per month, which can somewhat lower the annual fee burden. Click the link above to see more details about these credits. MR points are worth about 1.6 cents/point, so 4x MR earning rate is about 6.4% in return. This is the highest return grocery card, and its upper limit is also high enough, therefore it is suitable for those who spend a lot on grocery.
You can earn unlimited 3x TYP on grocery. TYP are worth about 1.6 cents/point, so 3x TYP earning rate is about 4.8% in return. Since there is no upper limit, it is suitable for those who spend really a lot on grocery.
3. Dining Card
This card have been mentioned above. Not only it can earn 5x UR points on rotating categories every quarter, but it can also earn 3x UR points on dining!
It earns 3x UR points on dining.
This card earns 3x UR points on dining, which is not very impressive because the no fee cards CFF/CFU can also do that. The most important role of the CSP, however, is that it allows you to transfer Ultimate Rewards Points earned with both Chase Freedom cards and CSP to partner loyalty programs including UA and Hyatt, boosting the UR value from 1 cent/point to about 1.6 cents/point. When you have CSP, your CFF will become about 8% in return on rotating categories, 4.8% on dining, and your CFU will earn 2.4% in return on everything! In addition, you can get primary car rental insurance with this card. Most importantly, the Chase 5/24 rule (see here for detailed information) makes this card almost impossible to re-open if you apply for credit cards very often.
AmEx Gold: 4x MR Points on Dining, $250 Annual Fee.
This card have been mentioned above. Apart from grocery, you can also earn 4x MR on dining!
This card have been mentioned above. Apart from grocery, you can also earn 3x TYP on dining!
Besides, there are some other good dining cards worth mentioning: US Bank Altitude Go (4% cashback on dining, $0 annual fee), Capital One SavorOne (3% cashback on dining, $0 annual fee), Capital One Savor (4% cashback on dining, $95 annual fee). However, these cards are very hard to get approved, and I suggest newbies avoid these cards in the beginning, and wait until you have obtained other good cards you want.
4. Some Wide Range Categories
You can choose from several categories to be your 3% cashback category, and online shopping is the best category because it has a very wide range. The upper limit is $2,500 spent per quarter. If you have a lot of deposit or investment in BoA, the cashback rates get even better: if you reach the highest level, then you can earn 5.25% cashback on online shopping!
You can earn 3x points on mobile wallet spending, including Apple Pay, Android Pay, and Samsung Pay. That’s a pretty wide range. The points are worth fixed 1.5 cents/point when redeeming for traveling expenses, so that’s a 4.5% return on those spending! The annual fee is $400, but it comes with a $325 travel or dining credit, which is very easy to use up, therefore its effective annual fee is $75. However, it is very hard to get approved, and I suggest newbies avoid this card in the beginning, and wait until you have obtained other good cards you want.
5. Other Categories
Earn 2% cash back on everything. You may also choose to convert its cashback to TYP at 1:1 ratio, and increase its value! If you are good at the miles game and value TYP at 1.6 cents/point, then the return is about 3.2% on every spending!
There are another two no annual fee 2% cash back cards. Even if we don’t consider the TYP conversion, I still prefer DC among these, because: you can get another Citi credit card with huge sign-up bonus, then downgrade it to DC after a year, so that you can keep the credit history of the card and get DC without additional hard pull.
This card have been mentioned above. Not only it can earn 3x UR points on dining, but it can also earn 1.5x UR points on everything else! If you like to study points/miles and maximize their values, then by the help of CSP/CSR, the 1.5x Ultimate Rewards (UR) points on everything is worth about ~2.4% in return.
Besides, there are a few more cards worth mentioning:
1.5% cashback itself is just so-so and not worth mentioning. However, if you have a lot of deposit or investment in BoA, the cashback rates get even better: if you reach the highest level, then you can earn 2.625% cashback on everything!
This card earns 2x Capital One Miles on everything. In recent years, the Capital One Miles program is improved a lot, and now its value is also around 1.6 cents/point. Therefore if you are good at the miles game, the return is about 3.2% on everything. However, it is hard to get approved, and I suggest newbies avoid this card in the beginning, and wait until you have obtained other good cards you want.
6. Credit Cards That Give You Free Nights (FN)
Although the annual fee is as high as $450, it gives you a $250 air credit and a $250 Hilton resort credit (room rate itself also counts). If you can make use of these credits, the effective annual fee is already negative! Plus, it gives you an annual weekend Hilton FN, with no category cap! It’s worth $200+ Besides, it also gives you Hilton Diamond status, etc. Click the subtitle to see more details about this card.
You can’t apply for this card directly any more, but you can still get it by product change. Although it has a $450 annual fee, it comes with a $300 air incidental credit, as well as 1 worldwide Marriott FN with a redemption level up to 50,000 Marriott points which is worth $200+. Besides, it also comes with some premium card benefits, such as Priority Pass Select (PPS) airport lounge access. What’s more, its authorized user cards are free and also have separate PPS cards. Click the subtitle to see more details about this card.
There are a few more cards that you can earn an FN by paying the annual fee, but comparing to AmEx Hilton Aspire or Chase Ritz-Carlton these cards are just so-so. So just choose the one or two from your favorite hotel chain:
You can get 1 worldwide Marriott FN with a redemption level up to 50,000 Marriott points. Worth $200+. It also comes with a $300 Marriott credit per year, as well as some other premium card benefits.
You can get 1 worldwide Marriott FN with a redemption level up to 35,000 Marriott points. Worth $150+.
You can get 1 worldwide Hyatt FN with a redemption level of category 1~4 every year. Worth $150+.
You can get 1 worldwide IHG FN with a redemption level up to 40,000 IHG points. Worth $150+.
You can leave these cards at sock drawers, and only pay the annual fees for the free nights.
Though there are a lot of cards that worth keeping, but actually you don’t carry a lot with you: you should bring one grocery card; one restaurant card; CFF and Discover it when the 5% cash back category is useful; DC or CFU for everything else; and you can throw all other cards into your sock drawer and enjoy the rewards they give you!