Credit cards - what’s best?

[The Cosmic Avenger]

After going through the financial/credit Armageddon known as divorce, back in the 1990's, I have acquired an innate dislike of credit cards. So, for years I had none, and even now I only have one: The Amazon Prime Rewards Visa, which I got through Amazon Prime, and which is administered by Chase Bank.

It gives me 5% for Amazon purchases and Whole Foods, 2% for restaurants, gas stations, and drugstores, and I think 1% for everything else.

I like it because it feeds my Amazon addiction. I use the rewards directly for my Amazon purchases.

That's what we have, as a secondary card to our 2% cash back Fidelity (Elan) Visa. Even when we were using Amazon for all our senior pet needs, it still wasn't close to our monthly non-Amazon spend, but now that those pets have passed, we don't order nearly as much; some months I don't even bother with a Subscribe & Save order.

But don't use your Rewards for purchases, that's a purchase you could get 2% back on! Just redeem it for a statement credit (or deposit it into the checking account that you use to pay the bill), that way your rewards points are still paying for some of your purchases, but then they ALL give you 2% back.

 

[tulak]

I like that the Costco card has no transaction fees, though.

That's why I keep it (plus I've been lazy to cancel it) as a back-up in case my Sapphire card doesn't work. I could use the Amazon Prime card instead, since that has no transaction fee.

I've used the Fidelity card in a pinch too. There's a 1% charge, but with 2% cash back, you still earn 1%, so it's not that bad in case of emergency.

 

[Aerides]

Amazon for AZ and WF
CostcoCiti for Costco/gas
Amex Blue for day to day, grocery
Amex Plat for travel (the perks make it worth it for me)

A couple others for points and things, usually got them for the bonus offer and then don't use.

 

[Chuckanut]

We've been using a Capital One travel card for many years. Get a trip to Europe yearly for one person at a minimum on rebates. The service level of Capital One is simply fantastic.

ClarkHoward.com covers this subject well.

FWIW, Capital One also offers its ENO service. I use this for online payments, usually small recurring payments. Using ENO, I create a virtual card number that can only be used at the merchant where I first used it. For example, I charge my monthly Netflix service to a virtual card. If the number is stolen by bad guys, at worst all they can do is charge to my Netflix account. Disnyey+? No go. The thieves they are out of luck.

If the number is compromised I only have to change one number. All the other places where I use the Capital One card have a different account number. The card earns 1.5% cash back which I usually use as a credit towards a monthly bill.

 

[Chuckanut]

Does anyone use the Amazon card? I'm eyeballing it for the $200 bonus and I should probably get another credit card. I would use it as a backup credit card.

I primarily use the Costco card since it doesn't have an international transaction fee.

I use it for Amazon purchases. Occasionally, they offer a special deal. Earlier this year it was 5% back on grocery store purchases for a few months. A few years ago, IIRC, it was 10% back if used to pay a utility bill. I think I prepaid six months worth of electricity at that time. Haven't seen it that good again.

The Costco card with its 3% travel/restaurant cash back and no international fees is a winner.

 

[Chuckanut]

If you use rewards for purchases, then you don't earn points on that purchase.

It's better to use the rewards to pay down the credit card balance. This is easy to do on the Chase website. I make it a habit to do this every month or so. Just select 'Earn/Use' and then 'Cash Back'. They give you an option to 'redeem for a statement credit.' Select that and you're done.

I just did it for $12.38. If I used this amount towards a purchase, then I would have missed out on an extra 62 cents.

tulak, you are my kind of frugal, LBYM kind of person. I salute you.

 

[sengsational]

There's no one best card because everybody has different spending. One thing I do is ignore all credit card offers and instead go to doctor of credit occasionally and look in a category or two. Usually it's the best sign up bonus category because that's where you can make serious dough quickly, without spending a fortune.

 

[pacergal]

We have two Visa cards. One via our local work credit union, earns points, which we spend on something every few years(no yearly fee) and the Alaska visa through BofA (yearly fee $75), I like the companion air certificate we get yearly, which we were using prior to covid!

 

[swakyaby]

I use all no-fee cards:

Amazon storecard 5% back on Amazon and Whole Foods
Discover It 5% back on rotating categories, currently groceries and paypal
Costco citi visa 2% back on Costco and 4% back on gas
Capital One Savor visa 3% back on groceries and restaurants
Wells Fargo Active Cash mastercard 2% cashback on everything. I keep this one at home and put all recurring monthly charges on it.
Fidelity visa 2% back on everything else

 

[JBTX]

Capital one savor - 4% entertainment and dining
Chase ink cash 5% mobile phone internet and streaming
US bank cash 5% utilities
Cap one Walmart 5% online grocery pickup
Amazon prime 5%
BOA cash rewards 3%+ for gas

All other fidelity 2% card.

Also, in the all other category, I will hit many of the higher credit card bonus cards every few years - going through quite a few this year. Several $thousand in up front bonuses. Usually limited to bigger bonus and no fee or low fee cards. I generally avoid the high fee cards although I did do one $295 fee Amex gold. Luckily since I have some proprietor EIN I can hit many of the business cards also.

 

[athena53]

Costco citi visa 3% back on Costco and 4% back on gas

It's 2% on Costco purchases but 3% of restaurants and travel.

 

[swakyaby]

It's 2% on Costco purchases but 3% of restaurants and travel.

Thanks, corrected it.

 

[Montecfo]

I use the Costco Visa. It seems to be one of the better everyday cards.

But I also grab airline affiliated cards when there are large points bonuses. Like the British Airways Visa with 100,000 point bonus. I find it works pretty well for cheap US flights on American, where I have lifetime status.

Or sometimes a United affiliated card can be nice.

I seem to fly those to the most, though I have points with all of them.

 

[swakyaby]

Capital one savor - 4% entertainment and dining

It’s actually 3% on entertainment and dining.

 

[Walt34]

Does anyone use the Amazon card? I'm eyeballing it for the $200 bonus and I should probably get another credit card. I would use it as a backup credit card.

I'm another one with the Amazon card but it normally stays in a drawer at home and the only place I use it is Amazon. Once in a while they run a higher rebate on something I'll use it for, like groceries, and if I can remember to I'll use it for that too.

And I use tulak's method of using the rebates for a statement credit, and Chuckanut's use of Capital One's Eno program for "virtual credit cards" each valid at only one merchant. And one of the virtual cards did have an attempted unauthorized charge on it once at at different merchant so it was very easy to simply delete that card.

I sort of share W2R's aversion to credit cards although my aversion was developed by my parents getting too deep into cc debt when I was in Jr. High School. It took them three years dig out of it which is "foreeever" to a teenager and it certainly made an impression on me. The lesson was reinforced later in life by my first wife, who never saw a credit card she didn't like.

This being the 21st century however I recognize that doing without credit cards would be at best inconvenient, so we use them. But they are always paid off when the statements arrive.

We use a spreadsheet to keep track of all cc purchases so when the bills arrive it is not a surprise. If it isn't on the spreadsheet then somebody's got some 'splainin' to do! DW is the one who came up with the idea and it works great for us.

 

[RetireAge50]

We use a few:

Costco Citi Visa
4% Gas
3% Travel

Venmo Visa
3% All bills like utilities, phone, sewer, water

GESA Visa
5% Groceries
2% Everything Else

 

[Alex The Great]

We use a few:

Costco Citi Visa
4% Gas
3% Travel

Venmo Visa
3% All bills like utilities, phone, sewer, water

GESA Visa
5% Groceries
2% Everything Else

Regarding GESA Visa: I do not see any credit card earning 5% cash back from this credit union.
https://www.gesa.com/credit-card-browse/
Is it a right place to look?
Also may I ask if Venmo Visa can be used to pay for HOA, in 3% or 2% cash back category?

 

[Phroig]

Does Costco Visa’s travel category include Airbnb? Also, is there a limit on the amount of travel spending eligible for the 3% reward?

 

[Chuckanut]

This being the 21st century however I recognize that doing without credit cards would be at best inconvenient, so we use them. But they are always paid off when the statements arrive.

Yes, always pay them off 100%. They may be credit cards, but I use them as a payment card.

I got nailed for a late fee once when I got distracted. My fault, but she was worth it. It was about 10x the interest charged. After that, I setup my bank's auto-pay system to automatically send my three most used credit cards their minimum payment each month. At worst I run a small credit balance that will be eaten up in a month or two.

 

[mystang52]

We use 2 main cards:
AMEX Blue Cash: 6% back on supermarkets, 3% Gas and travel. $95 annual fee, but even with that fee I come out way ahead. They also offer a no-fee version that rebates 3% on Supermarkets. Again, for me the extra rebates with the $95 fee card exceeds that fee.
Chase Freedom: No fee, pays 3% back for restaurants and drug store purchases, 1 1/2% all other.
Both of these cards also have incentives with certain merchants that give additional rebates. You have to go to your account's website to view and accept such offers, but that adds additional rebate $$.

I also use a Chase Marriott Bonvoy card. $85 annual fee but it includes an annual free hotel night.

 

[2017ish]

It all depends on your travel and spending patterns.
...

For sure.

We have BoA cards with Platinum honors, so limited 5% return on select categories ("online" for us), and 2.625 for everything else.

But, we still pay for SWA/Chase card (played games and got not only points, but Southwest companion pass for 9 months of '22 and all of '23), and Sapphire Reserve.

$550 annual fee on sapphire reserve is a big bite, but we spend a LOT each year on travel (50+% of our high spending), and a bit on restaurants...

Bottom line, without too much effort, we've netted over 15,000 a year on credit cards since we retired--most of it on Sapphire Reserve. And that doesn't include the use of airport lounges, which are definitely of value on international travel outside of developed countries.

 

[RetireAge50]

Regarding GESA Visa: I do not see any credit card earning 5% cash back from this credit union.
https://www.gesa.com/credit-card-browse/
Is it a right place to look?
Also may I ask if Venmo Visa can be used to pay for HOA, in 3% or 2% cash back category?

If you go into the details it explains the 5% but apparently this is a promotional thing only for the first $2,500 in purchases. So probably not with it, sorry about that. I’m not sure how Venmo would categorize the HOA payments. Probably as other so only 1% back.

 

[athena53]

Does Costco Visa’s travel category include Airbnb? Also, is there a limit on the amount of travel spending eligible for the 3% reward?

Yes, Airbnb is covered. I paid with my Costco Visa for an Airbnb stay last May.

I don't think there are any limits. My travel budget is pretty lavish ($15,000 YTD and I'm not done yet ) and everything travel-related goes on the Costco card.

 

[Phroig]

Yes, Airbnb is covered. I paid with my Costco Visa for an Airbnb stay last May.

I don't think there are any limits. My travel budget is pretty lavish ($15,000 YTD and I'm not done yet ) and everything travel-related goes on the Costco card.

Thanks! I just discovered (and signed up for) the Wells Fargo Autograph card. There's currently a decent sign-up bonus, and you get 3% on travel/restaurants/gas/streaming.

 

[Sojourner]

I have asked myself if I would pay for lounge membership. The answer is yes but not at the rates they charge. Priority pass is $254 per year. I would probably pay $100 based on my usage.

Can I live without lounges, global entry, clear, etc.? Of course I can but they make traveling much easier and stress free.

IMHO, airport lounges are not nearly as valuable as they used to be. These days, they are absolutely jam-packed with people, typically to the point of not being able to find a pair of empty chairs together. It seems like everyone has lounge access now, making it much more like a mass-market commodity than a comfortable, luxurious privilege. Maybe this is just because my home airport is ATL, which is the busiest in the country, but I have a feeling it goes beyond that. At any rate, I personally would not pay very much out of my own pocket for lounge access right now.