I’ve finally found my perfect match. I now have 3 credit cards that provide me with an average reward of around 3% cash back because of how I use them. And I no longer have any fear of missing out, or unused cards sitting in a drawer gathering dust. If you buy things, eat, and travel at least a couple of times per year, perhaps these three cards should be in your wallet as well.
Benefits of Changing
I estimate that I’m averaging about 3% back (cash, or cash equivalent). For every $50,000 of credit card spending, that’s about $1,500 back. Many cards make it hard to know exactly what you’ll get back, on average, in a one-year cycle. I just wanted a few cards that would give me rewards I won’t forget to use. I also wanted rewards for buying, say, gas or flights, not a card that requires me to specifically fuel up with Chevron or fly with American. These cards do just that and are easy to understand because the rewards translate to cash back (I’m never confused about what my points are worth).
The Big 3
Here are my 3 favorite cards (at the moment) and how the rewards work out for me:
Supermarkets and Gas
Amex Blue Cash Preferred: My expected reward – about 4% cash back. I get 6% back on grocery spending up to $6,000, and 3% on all gas, and there’s a small annual fee on this card.
Travel and Dining
Chase Sapphire Reserve: My expected reward – about 4.5% cash back. The actual reward is 3% but I get a 50% bonus on the points because I save these rewards to use for future flights only. This card has a large annual fee, but you’ll earn a $300 credit towards this fee as soon as you spend $300 in the travel category). The rest of the fee ends up being justified by the amazing perks or more cash back (they’ll pay for your Global Entry access at airports, for example).
Chase Freedom Unlimited: My expected reward – about 2.25% back. The actual reward is 1.5% but I get a 50% bonus when I transfer these points to the Chase Sapphire Reserve card and then use them to book future vacations (flights). It’s easy to remember when to use this one because I only have to remember what NOT to use it for (the 4 categories for the previous two cards).
When I applied each reward and factored that I use all of my Chase rewards to book travel (50% bonus), it averages to around 3% back for me. Your reward percentage will likely be slightly different based on how much you spend in each category.
Teeing Things Up
As soon as I got my new Freedom Unlimited card, I took 15 minutes to review and update all of my accounts with online and recurring billing (Amazon, Netflix, home and auto insurance, gym membership, Ticketmaster, and more). This part is key when you add a new card to your life because it’s easy to forget how much we buy with credit cards that are already stored. My Reserve card is stored in my Uber and Lyft accounts and with my preferred airlines. And they are all in my digital wallet, so I don’t even need to have my AMEX with me most of the time, since Vons and Trader Joes (my two main grocery stores) accept Apple Pay.
Could I do better? Of course. Will this set of cards be behind the times in a year or two? Probably. But, for now, I don’t want more cards and I’m happy with the rewards and not having to think too much about every time I buy something. No more FOMO for me.