Everyday Spend Credit Cards and Why I’ve Given Up on Them
You may have read here or elsewhere about credit cards to use when none of your others offer a category bonus for a given purchase. I’ve heard various terms for these credit cards, but I’ll simply refer to them as everyday spend cards here. I’ve been a fan of various everyday spend cards for years, but my enthusiasm has slowly decreased with every passing year. Now, I’m to the point where I don’t even concern myself with using everyday spend credit cards for normal spend. Here’s why.
I Can Do Much Better
Many debate various everyday spend cards – it’s a fun topic. Here are just a few of the cards discussed most often:
Bank of America Premium Rewards Visa – Earns 2.625% cash back for Platinum Honors level members of BOA’s Preferred Rewards. I think it’s a gimmick, but the rewards are undeniable.
Discover it Miles – Earns 1.5% cash back and a match after the first cardmember year, reflecting 3% cash back earning for the first year. This offer is repeatable with new accounts.
Credit Card Spending Offers
Various issuers are handing out spending offers at lucrative rates for years, with issuers turbo-charging these offers during the pandemic era. I, and many of you, have obtained limited-time spending offers across Amex, Chase, Citi and the other issuers that easily outpace the everyday rewards earning rates. For example, Chase Sapphire Reserve cardholders currently obtain 3x Ultimate Rewards on the first $1k of grocery spending monthly (or 4.5% cash back thanks to Chase’s Pay Yourself Back feature). Last November, Citi targeted cardholders for 5% cash back in addition to their normal card rewards across their portfolio for online purchases.
Many are currently targeted for an Amex Offer where Blue Business Plus cardholders get $25 back with every minimum $500 purchase in addition to the normal 2x Membership Rewards points. (Yes, I know this is an everyday card I mentioned previously, but I’m including it here due to its current outstanding offer.) For Schwab cash out fans like me, that’s 7.5% cash back on a $500 purchase. These are just a few examples – opportunities here are seemingly endless.
Office Supply Stores and Stacking
Many of us are regular gift card customers at office supply stores. The major reason I’m there often is for the 5x Ultimate Rewards earning on my Chase Ink Business Cash card accounts. Sprinkle in the routine Visa/Mastercard gift card sales where the cards are fee-free, and in some cases, negative cost (free money) even before taking into account credit card rewards. Also, add in offers from card-linked apps and programs like Dosh to bring even more rewards. In the past, all of these have factored into an easy 9-10% cash back. I can then use these cards for everyday spend. How does a 10% cash back credit card sound? Essentially, that’s what these gift cards have become. In comparison, considering traditional credit cards for everyday spend is largely a waste of time for me.
Historically, many tout using credit cards within the welcome offer period as a great option for everyday spend. Why? Because the relative amount of spend is small in order to obtain an exponentially higher welcome offer amount. Hence, the earn rate is far higher than any normal card can offer for everyday spend. I largely agree with this principle. Some take it a step further and always try to have a new card open so that they are always working toward an outsized welcome offer. Theoretically, those people are consistently earning at high rates. That’s great, but always having a new card working towards a welcome offer isn’t practical for me; my spending requirements can’t be fulfilled with welcome offer spend alone. Nonetheless, I routinely go after worthy welcome offers and put normal spend on them for the great effective earn rate.
I Want to Stay Sharp
Easy plays are solid – I take advantage of them all the time. But I don’t learn anything new from the easy play of using everyday credit cards for normal spending. If I’m not learning, I can easily become mentally sedentary – maybe some of you can identify. Instead, thinking of new methods to drive up my earning on everyday spend keeps my mind busy and helps me stay sharp. Of course, overdoing this can lead to not being able to “turn off” my brain, but I’ll take this over the alternative. And in the course of doing this mental exercise, I’ll often unearth other unintended ideas or plays I wouldn’t have otherwise discovered.
A More Complicated Hobby
Card issuers are increasingly rewarding hobbyists who play a more convoluted game. For instance, Citi Rewards+ cardholders earn at much higher rates for very small transactions. Specifically, this Rewards+ feature rounds up your rewards on spend to the next 10 points. For instance, a cardholder earns 10 ThankYou points on a $9 purchase, but also on a $0.25 purchase. Before this card, this aspect isn’t something I every concerned myself with. As time passes, issuers are introducing new, creative methods for rewarding cardholders. When we look at new methods from different angles, we often can do much better than with an everyday spend credit card.
Of course, everyday spend credit cards are great tools for large segments out there. For instance, many of you have spouses or domestic partners who are involved in the hobby, but only tangentially. Or maybe they are involved just because you are, ahem, very encouraging. Regardless, some don’t want to juggle different cards; they would rather keep things simple. One credit card for all spending can be great for them! Also, I understand that many active hobbyists may not want to go so extreme or have the time to devote to complex plays. Everyday spend cards are there for those of you, as well.
Everyday Credit Cards – Conclusion
I won’t use the word “never”, but I don’t expect to return to everyday spend credit cards for normal expenses in the foreseeable future. The outsized alternatives are simply too lucrative and bountiful. More importantly, I have the time to commit to these plays, and I enjoy doing so. Do you use one everyday spend credit card for all spend outside of bonus categories? Why or why not?