Sunday, March 1, 2009

Credit Cards To Use For Every Day Purchases - Great Cashback And Reward Programs

Update 03/04: New credit cards added.

I keep getting email from people asking what credit card they should get for regular spending. We’ve discussed 0% APR offers, credit card churning and other ways to take advantage of credit cards. But what about the basics, you know, regular shopping? I made a list of which cards are the best to use long-term, for every day purchases.

Many credit cards offer rewards for using their cards, like miles or cash back. If you're spending money, you may as well get rewarded for it! I compiled a list of eight cards with great cashback and reward programs, four Amex and four non-Amex cards. Spend some time today to read up and see which card will give you the most rewards. It's worth it!

Everyone should have around 2-3 cards which they keep and don't cancel. Pick at least one Amex and one non-Amex. If you already have a different card with the same bank, you can call them and try to change it over to one of these cards.

This list has mainly on cashback cards with no annual fee, aside from the Amex Starwood. I consider miles to be worth just over a penny a mile, and most mile earning cards have an annual fee, but the best cashback cards are free. If you consider your miles to be worth more, and need a non-amex card, take a look at this list.

I also listed a few American Express cards, even though their cashback programs are not necessarily as good. I highly recommend that everyone have an Amex card. An Amex card with a mediocre rewards program might be better than a non-Amex with better rewards. I use an Amex whenever I purchase something that I might need to benefit from Amex features. If not, then I use the best rewards card for that specific purchase. As a side note, my Amex cards also always report my credit limit, which helps keep my score high.

If readers request, I will dedicate a separate post for each card and go through all its features.

Non-Amex Cards:
  • Charles Schwab Visa
    2% cashback on everything you spend! There is also no fee on foreign spending! Most other cards add on 2-3% for foreign spending. You have to open their brokerage account as well, which is free. The 2% cashback automatically gets deposited monthly into your brokerage account, which you can then take out whenever you want. The debit card that comes free with the brokerage account can be used to withdraw money from most ATM's, fee free. Any ATM fees the other banks charge will be refunded at the end of the month. The only downside is that it takes two inquiries to open the account, one for the card and one for the brokerage account.
    Bottom Line:
    This card is amazing! I would take 2% in cash over miles any day. If you are a credit card churner, you'll have to decide if it's worth the 2 inquiries. Compare this card with the Fidelity Amex (also 2%).
  • Fidelity Investment Rewards Amex.
    Read my review

    2% Unlimited cashback on everything you spend. Very similar to the Charles Schwab card.
    Bottom Line:
    Most people will benefit more from Charles Schwab.

  • Chase Freedom Visa
    Update: Chase changed the rewards. Read the details for the new system.

    1% cash back on regular purchases and 3% on purchases in your top three spending categories, from a list of 15 categories. Request a check when you reach $50 in cashback. Once you earn $200 in cash back, you can get $250. That means you get 1.25% cash back for regular purchases and 3.75% for your top spending categories. You can earn a maximum of $18 a month in the 3% categories.
    Bottom Line:
    Great program. If you don't spend a lot though, it can take some time to reach $200 in cashback. One issue I have with the Chase Freedom card, is that they don't seem to report the credit limits. Also, Chase might be changing the 3% categories. I'll keep you posted. The card comes with a $50 signup bonus.

    If you want a card without the $18 cashback limit, then get the
    Chase Freedom Plus, which gives you 3% on your top six spending categories, has a $30 annual fee from the second year on, and comes with a $100 signup bonus.

  • Associated Bank Cash Rebates Card - Apply by phone only
    5% cashback on Gas/Drugstores/Supermarkets, 1% on everything else. Request a check when you reach $50 in cashback. $300 maximum annual cashback. To apply, call 1-877-577-9485

    Bottom Line:
    The maximum cashback you can get a year is $300. So, you have to decide if its worth carrying the card. Can be a great card to use for the 5% categories if you get a 2% card for your regular spending.

Amex Cards:

  • Amex Starwood - Mileage collectors. Annual-fee card.
    One point per dollar spent. You can transfer 20,000 points into 25,000 miles in many airlines. You can also use the points for hotel stays. The only problem is that it comes with an annual fee. But from annual fee cards, it's pretty low, only $45 dollars a year.
    Bottom Line
    : If you fly often or like staying in nice hotels, this is probably the best points program out there. You also get a 10,000 point signup bonus. However, if you spend under $1,000 a month on your card, then I don't think it's worth it for you to pay the annual fee. There is a lot of hype about the Starwood card. You need to calculate if it's actually worth it to keep the card and pay the fee after the first year.
  • Amex Blue Sky - Travelers who don't collect miles.
    One point per dollar spent. You can use 7,500 points to take off up to $100 from any single travel related charge. So, if you rent a car for $90, 7,500 points will take off the $90 charge. If the charge was $140, 7,500 points will knock off $100. If you use this card right and you travel often, you could be getting 1.33% cashback, which is great!
    Bottom Line:
    Up to 1.33% Cashback. 5,000 point signup bonus. If you don't want the annual fee that comes with the Starwood, get this one.
  • Amex Blue Cash - Big spenders.
    Update: They lowered the maximum earning on regular purchases to 1.25%. Not as good anymore.
    On the first $6,500 you spend a year, you get 0.5% cashback on regular purchases and 1% cashback on Gas / Drug Stores / Supermarkets. Not that great. But once you've spent more than $6,500, you'll start earning 1.5% on regular purchase and 5% on Gas/Drug Stores/Supermarkets. If you only spend $7,000 in a year, this card is definitely not for you, as you will only be earning the higher rate on $500! Cashback comes as a statement credit after 12 billing cycles.
    Bottom Line:
    Great if you spend over $15,000 a year. Try to spend the first $6,500 a year on 'regular' purchases.
  • Amex Clear - Small spenders.
    Once you spend $2,500, you get a $25 gift card in the mail. So, you are basically getting 1% cashback on whatever you spend.
    Bottom Line:
    If you want things real simple, don't travel, want to use an Amex, and spend less than about $10,000 a year on your credit card, this card is great.
For more details on Amex cards, along with the business cards, click here.

- This list is a general one. There are situations where you might want to get a specific card, like if you want to earn points with a specific airline/hotel chain, and can't use an Amex.
If you need help figuring out which card to get, email me at I'll try and help.
- You can be getting even more rewards/cashback if you click through a cashback site, or through your credit cards shopping site.
One more point: If you don't pay your bills in full and on time every month, the fees and interest can wipe away any rewards you might be getting! Especially because often the rewards cards have higher interest rates.

Other cards to look at:

1) Amex Business Simplycash
1% cashback on regular purchases, 3% on gas and 5% on office supplies and cell phone bills. Cashback is applied to monthly statement.
Bottom Line: Great as an additional card (because it's a business card), if you have large cell phone bills or purchase lots of office supplies.

2) Amex TrueEarnings Business - You Must have Costco membership to get this card.
5% cashback on gas, 3% on restaurants, 2% on travel, 1% on everything else. Cashback comes annually as a coupon to redeem at Costco.
Bottom Line: Great if you have a Costco membership.

3) If you spend a lot of money on gas, check out Penfed Visa which gives 5% on gas (2% for Supermarkets and 1.25% for everything else). You might need to pay a onetime fee of $20 to become a member. And another $5 too. Read this Fatwallet thread for more info.
Bottom Line: Not worth it. Unless you really spend a lot on gas, and the other gas cards don’t work for you.


Anonymous said...

but where is the pdf?

Anonymous said...

ohh! its included the email!
ma bad! said...

Just in case you're wondering what PDF he's talking about, I sent out a PDF of this article along with the email alert for the new post, for people who want to print it out and read it.

If you want a PDF of the article, or you want to be added to the mailing list, send me an email to

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