I Don’t Need a Best Card for Everyday Spend
It seems that a lot blogs and credit card related websites like to talk about the, “Best card for everyday spend”. Of course I am guilty of talking about that exact topic as well. The truth is that so much digital ink is spilled in the search for the perfect card because a lot of people care about that topic. A lot of you are looking for said “perfect card”.
Even though I reserve the right to cover the topic for the vast majority of people out there, the truth is that I don’t really worry too much about which card I use for everyday spend. I know that is kind of a crazy statement, but it is one that I have been increasingly more motivated to write about. Before I go any further, I know my situation is not typical for a lot of you, however my reasoning will still have some value for most people I think.
Everyday Spend for Minimum Spend
Perhaps the main reason I don’t worry about having a terrific card for everyday spend is because I am constantly working on minimum spend requirements. While sometimes I MS to hit requirements, I also fold my regular spend into that. I think it is good for banks to see normal spend on a card and I figure I might as well use newly acquired cards for that reason.
Over the years as I have become more comfortable with larger spends, I have taken on increasingly higher “challenges”. For example, as I have written about over the past couple of months I took on the $20K spending requirement on the American Express Business Platinum card. As part of hitting that requirement, I used the card for a car down payment, car registration and other miscellaneous everyday expenses.
There are a few categories that I have covered pretty well across the board with certain cards. I have a card that gives me about 5% at grocery stores and drug stores, another one that gives me 3% at gas stations, one that pays 5X at office supply stores (Ink) and a couple that give me 2X on dining (Sapphire Preferred & ThankYou Premier). Of course I also have Discover, Dividend and Freedom which give me 5% in rotating categories throughout the year.
While I haven’t scientifically gone and looked at how much of my spending is in those categories, I am quite sure it is a significant portion of my overall spend. In other words, even if I wasn’t constantly working towards minimum spend requirements, I would still be covered with really good category bonuses most of the time.
One of the most valuable points earning tools for my wife and I over the past year have been retention bonuses. We are working on back to back 3X everywhere bonuses on the Citi ThankYou Preferred card, which means it automatically has become our “everyday spending” card. Of course there are other retention bonuses from other banks that may entice you to switch your regular spending in order to gain a bonus.
When you get a retention offer of say 10K points for $5K in spend (a popular offer on the Chase Ink cards for example), it is important to calculate your payback with that bonus. With the Ink example, you would receive a total of 3X on all spend for that $5K, so it totally beats out pretty much anything else for everyday spend.
One other popular method that people use to maximize rewards is category shift. Although I don’t know if that is the official term, I like it. Category shift is basically purchasing gift cards for one merchant at another merchant. For example a popular thing to do is to purchase Amazon gift cards at Staples with a Chase Ink card. This way instead of earning say 2% on Amazon purchases, you are earning 5X Ultimate Rewards points.
Those 5%/5X bonuses on the Discover, Freedom and Dividend cards are good for this as well. Lowe’s, Home Depot, Sears, Kohl’s and other stores are often featured as 5X merchants and they all sell third party merchant gift cards. You can category shift and gain greater rewards for a lot of spend.
The 2% Card
When all else fails, there is always the 2% card to fall back on, although if I’m being honest, I wouldn’t lose sleep if I didn’t have one. After everything I mentioned above, there simply isn’t much everyday spend left. Even if I used just a regular 1X earning card, my losses would be so minimal in the scheme of my overall earnings that I wouldn’t even notice.
Of course for those who do care, it is probably wise to have a 2% card. Citi has their Double Cash and BofA has the Fidelity Amex card. I used to value my Barclay’s Arrival, however I cancelled mine after Barclay’s gutted the card. Then there is the Bank of America Travel Rewards card that earns 2.625% for those with some cash to park at the bank. All good options for someone looking for that credit card earning floor.
As you can see, with minimum spend requirements, category bonuses, retention bonuses and the ability to purchase gift cards and shift spend, I simply don’t have very much if any everyday spend left. I do think quite a lot about which cards earn the best bonuses in the categories I spend a lot in, but that “best card for everyday spend” simply isn’t something I am worried about right now.