Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I just got a credit card (Fidelity Visa) that pays a 2% cash back on all purchases. (It puts the money in my Fidelity Investment Account every month I use the card.)
My friends tell me that is not as good a deal as the credit cards that pay 3-5% cash back on different things each month. (Most things are 1% cash back but maybe groceries or gasoline is 3-5% for a month or two, then something else.) What do you think? What is a better program:
2% Cash Back for everything all the time.
OR
1% cash back for most things but 3-5% cash back for different things at different times.
That would depend on many things, including your spending habits, annual fee, the actual perks offered, etc.
Only you can determine which is best for you!
I use my Chase Sapphire Reserve card for 3 points (same as 3% cash back) on all travel and dining. They give you a 50% bonus on the points if you use them for travel, so it is really like 4.5%. The card costs $450 per year, but comes with a $300 per year travel credit and other perks that more than make up for it for me.
Then I have a Chase Freedom and Discover card. Both have no annual fee and have rotating cash back/points of 5%/5 points up to $1,500 spend each per quarter. It is often for gas or drug stores, etc. So I use them for the category.
Then I have a Amex card that gives 3% cash back on all groceries. No fee.
I have the Amazon branded credit card for 3% back on all Amazon purchases, which is where I spend a lot of money. No fee and sometimes they up it to 5% back.
Finally, for things like liquor stores, etc. and for Amtrak, which I take a lot, I have an Amtrak branded card from Bank of America that gives 2 points for all Amtrak purchases and one point for everything else. The thing is, Amtrak points are valued really high and come in about $0.025 per point if used to buy train travel on Amtrak, so it beats out the 2% back card for me. But to make this card work, you really have to live in the north east where we use trains a lot. Otherwise I'd get a 2% back on everything card for this kind of spending.
We are happy using our 2% Citi card for most purchases. We put reoccurring charges on the card too. I have no interest juggling multiple cards that rotate discounts on a quarterly basis. We have friends who wife writes on their cards what to use for what each quarter - looks very messy.
I lean toward the card with flat percentage on all purchases.
With the cards that are higher on various things at various times you have to be constantly thinking about which card to use when. Also with many of these cards the way they categorize certain spending defies reason. A store that seems like it would qualify for increased rewards is often oddly classified making it not eligible. Or a store that DOES qualify for increased rewards is higher priced than a competitor making the increased reward moot.
For us, I've evaluated our spending and the value of our time and simplifying is the way to go. YMMV.
I lean toward the card with flat percentage on all purchases.
With the cards that are higher on various things at various times you have to be constantly thinking about which card to use when. Also with many of these cards the way they categorize certain spending defies reason. A store that seems like it would qualify for increased rewards is often oddly classified making it not eligible. Or a store that DOES qualify for increased rewards is higher priced than a competitor making the increased reward moot.
For us, I've evaluated our spending and the value of our time and simplifying is the way to go. YMMV.
I find it so easy to keep track of which card to use when, that it makes it well worth it for me.
I should also mention that I use Chase shopping portals for a lot of online shopping to get extra points. For example, the other day I wanted to buy a new couch from West Elm for my apartment. I went to the store to find the one I wanted then came back home logged onto Chase, found West Elm on their portal and clicked it to get 3 points per dollar spent on top of the regular points earned from charging. So I ended up with an extra 4,000 points worth about $60, by simply clicking a button.
The best approach is to combine the two, but if you want to keep things simple and only use one card then a 2% cash back card is better than a rotating 5% bonus card. Often the bonus category for the quarter isn't one you use frequently (or even at all), and sometimes it's capped as to how much cash back you can get in that category each month.
I have both. 2% if for my business, the other for the other.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
