The Best Everyday Spending Credit Cards

 

The Points Guy suggested to a reader that the best card for everyday spend is the Chase Sapphire Preferred credit card.

Gary from View From The Wing countered that while the Chase Sapphire Preferred is a great card, it is NOT the best card for everyday spending because other cards such as the American Express Premier Rewards Gold card, Asiana American Express, Starwood Preferred Guest American Express, Alaska Airlines Visa, Diners Club, British Airways Visa offer better benefits.

I agree with Gary that the Chase Sapphire Preferred is NOT the best card for everyday spending.

Moreover, you would have to spend much more on the Chase Sapphire Preferred card to travel in First and Business class than by using another card.

The Sapphire Preferred is also not the card with the highest current sign-up bonus (that’s the Citi AAdvantage cards with 75,000 miles) nor the best card for domestic US airfare (that would be regular cash back cards which give you more than 1.25% cash back).

For example, you would need to spend $400,000 on the Chase Sapphire Preferred card to earn a $5,000 business class ticket from the US to Europe if you redeem through their Ultimate Reward portal.

Best Everyday Spend Card

To put that in perspective, the top 1% of US households had an adjusted gross income (AGI) of $380,354, so they would have to spend more than their entire yearly income to get that business class ticket to Europe!

But the Sapphire Preferred card lets you transfer to Continental and British Airways as well, so you would transfer 100,000 points to Continental and then redeem 100,000 points for a Business Class ticket to Europe.  This would require you to spend only $100,000 on the Sapphire Preferred card to get that business class ticket to Europe.

But, you require 20% less spending ($80,000) on the SPG American Express to earn the same award. 80,000 starpoints  would get you 100,000 US air miles which would get you the same business class ticket to Europe (more details below).

I categorize credit card spending into 2 categories – spending to get the sign-on bonus and everyday spending.

1)  Spending to get the sign-on bonus

  • This means using the credit card just to get the sign-on bonus and then using a different credit card for day-to-day use after you get the sign-on bonus.
  • For example, you spend $1,500 on the Citi AAdvantage Visa credit card to get the 75,000 mile AAdvantage mile bonus.
  • But once you get the 75,000 AAdvantage mile bonus, you would switch to a different credit card because you earn only 1 AAdvantage mile per dollar spent (and there are credit cards which let you earn more miles per dollar spent).

2)  Everyday spending

  • Everyday spend means that you use this  credit card for your day-to-day purchases. And you do this only after you have spent the minimum amount to get the sign-up bonus on your other credit cards
  • For example, once you have completed the $1,500 spend required to get the 75,000 AAdvantage miles on the Citi AAdvantage Visa you would switch to a card which earned you more than 1 AAdvantage mile per dollar spent.

MY CHOICES

I prefer the Starwood SPG card, the British Airways Visa (for the companion pass), and the American Express Premier Rewards Gold card for everyday spend.

Starwood SPG American Express Card

You earn 1 point per dollar spent on regular purchases.  However, when you transfer 20,000 points to most airlines you earn a bonus of 5,000 points so your earning rate is 1.25 points per dollar spent.

Starpoints are a terrific redemption option on the mid-range SPG hotels and using the “Cash & Points” option gives you even better value on SPG hotel redemptions.

Moreover, you can redeem these miles for travel in First and Business Class by transferring to airline partners which would cost much more if you used the Chase Sapphire Preferred card since you don’t get the 20% transfer bonus.

For example,you need 100,000 US Air Dividend Miles for a business class ticket to Europe. You would have to transfer only 80,000 SPG points (because of the 5,000 mile bonus for every 20,000 points transferred) to US Air to get this award.

Now, to earn 80,000 SPG points you would have to spend $80,000 on the SPG card.  $80,000 is a lot to spend, but is 20% less than the $100,000 in spending required to earn the same award on the Chase Sapphire Preferred card.

British Airways Visa

You earn 1.25 British Airways miles per dollar spent, but the real benefit of this card is that you can get a free companion certificate when you spend $30,000 in a calendar year. This is a terrific value when combined with the 100,000 mile sign up bonus which was recently offered!

Now, British Airways charges fuel surcharges and taxes on awards, but by spending $30,000 you can redeem 2 tickets for the redemption rate of 1 ticket on British Airways.

For example, it costs 150,000 British Airways miles from the US to Europe in First Class.  But by spending, $30,000 for the companion certificate, you will get a redemption worth an extra 150,000 British Airways  miles.

So, in effect, by spending $30,000 you can save  150,000 British Airways miles (by using the companion certificate).

That is an earnings of 5 British Airways miles per dollar (assuming you used the companion certificate for a First Class redemption from the US to Europe).

Right now, I am using the British Airways Visa as my primary everyday spending card since I want to get the companion certificate and then redeem for 2 First Class awards!

Now, you are limited to only 1 companion pass per year, but this is still a great deal compared to the Chase Sapphire card where you have to spend $100,000 to get a business class ticket to Europe.

Best Everyday Spend Card

American Express Premier Rewards Gold

You can transfer points to more partners through the Amex Premier Reward Gold and there are numerous bonuses for transferring points.

You also earn double points for certain everyday purchases like gas and groceries.  Together with the bonuses and double points, you will likely have an earnings rate greater than the 1.25 cents per dollar spent with the Chase Sapphire Preffered card.

Chase Sapphire Preferred card

Yes, the 50,000 bonus point sign-up bonus is great, but once you get the bonus, I don’t see much point in using the card regularly.

Sure, you don’t pay foreign transaction fees and you get a 7% point bonus at the end of each calendar year, but that’s not reason enough to keep it in my wallet.

As we’ve just seen there are better options, such as the SPG card, BA card, or even regular airline cards such as the Chase United card, if you want to redeem points for experiences which you couldn’t afford otherwise, such as first and business class travel.

If you want to redeem points for domestic airfare, you are better off with the Capital One Venture card where you earn 2 points per dollar (versus 1.25 with the Sapphire Preferred) or better yet, a cash back card which gives you more than 2% cash back on purchases.

If you’re looking for the largest sign-up bonus, than you should look at the 75,000 mile Citi AAdvantage cards.

Bottom Line: The “best” everyday card is going to largely depend on your travel and spending patterns, together with how you use your miles and points (for the cheapest fare or first or business class travel).

Choosing your everyday spending credit card wisely is very important to have Big Travel with Small Money!

But I will confidently say that for most people the Chase Sapphire Preferred card is likely NOT the best card for everyday spending.

What are your favorite credit cards for everyday spending?  Tell us about it in the comments!

* If you liked this post, why don’t you  sign-up to receive free blog posts in your email (only 1 email per day!) or in a  RSS reader …because then you’ll never miss another way to learn about the best credit cards for everyday spending!

Disclosure: You should know that I have checking and credit card accounts with Chase.

However, I don’t get any commission or payment from Chase, Citibank, American Express or anyone else for this post or for the links in this post.  I also do not have a direct financial interest in American Express and Chase, and own negligible amounts of Citibank stock.

 

40 Responses to The Best Everyday Spending Credit Cards

  1. Don’t dismiss out of hand the Asiana Amex — $40k in spend gets you business class Star Alliance award from the US to Europe (ie travel up to 10k miles), including 5 stopovers… so if that’s the reward you’re looking for, as many East Coasters are, this BofA-issued card could be your ticket.

  2. agape2travel

    Good analysis…for those of us who don’t end up spending a lot on credit cards each year (mine is around $15-20 per year), you certainly want to achieve the max. Thanks for a well thought out article and hats off to Gary Leff for his article.

  3. Great post!
    Couple of questions:

    - Are there more than one version of the SPG card (eg. is there a free one after the first yr free promo)? If so, does the SPG benefit apply to the free one as well?

    - What is the full terms regarding the 30K BA promo for the free companion ticket? Do I need to use BA miles to redeem the first ticket or can I use OneWorld (ala AA) miles, which seems cheaper (125K vs 150K for 1st class to europe)? Does it only apply to destination based redemption or can I use it towards distance based redemption as well (eg. around the world travel)? Also, does this benefit apply to the no-fee card if I downgrade after the first year?

    Thanks!

  4. @Gary Leff – I’m not dismissing the Asiana Amex (especially since it came from you). :) I’ll certainly mention the Asiana card when I revisit this topic again and I do see the value in the business class ticket to Europe for only $40k!

    @agape2travel - Thanks! For many of us who are trying to hit the minimum spending required to get sign-on bonuses, an everyday spending card is not really relevant. You’re right – Gary did a great job summarizing the options available.

  5. Thank you for another well thought out, detailed & informative post.
    I particularly like the fact that you disclose you do not take any commission or payments & coupled with your astute analysis & explanations on this & all your other posts makes you my # 1 source for accurate & timely for information.

  6. @Eric – I don’t believe that there is an SPG card which has the annual fee waived after the first year.
    The terms on the BA companion voucher are a bit strict – you can redeem ONLY on British Airways metal (or aircraft) and codeshares are NOT allowed! Since this is British Airways benefit, you have to use the British Airways award chart (150K miles in First from the US to Europe).

    You can use the certificate for the distance based chart, but that would be very expensive (the rates in the chart are for economy travel; multiply that by 3 for the First class redemption rate). I’m not sure if there is a no-fee version of the BA card available in the US. The complete terms for the companion certificate are here!.

    @Ken - Thanks for your kind words!

  7. Great analysis! But as you have said before, you should keep your own goals in mind. I started getting into the credit card game just this last March because I wanted to earn points for travel to South America (which I’ve heard are easy to get through BA miles). I got the BA Visa and spent $4,000 to reach 105K miles, enough for a business class ticket to and from S America and 2 one-way awards within the continent. However, I do not see myself spending $30,000 a year on credit cards, let alone, $30K on one credit card. Therefore, the BA Visa is pretty much useless to me after the sign-up bonus.
    After that, I got the Sapphire card because I could get 50K points to transfer into a multitude of programs in which I have decent balances already. The reason I did not get the Citi AAdvantage card was because those miles would be locked into AA which didn’t have the redemption options I wanted.
    I still have not reached the minimum spend on the Sapphire but after I do, I’ll have to look out for another card with a great sign-up bonus that also has great value after the bonus is applied.

  8. AK – You’re absolutely right – everyone’s goals are different and that has a bearing on your choice of everyday card. In fact, the best everyday card for many folks might just be whichever card has the most lucrative bonus (since it has hard to spend mega-bucks on a credit card)! However, my post was trying to address which card to use once you have exhausted all the bonus opportunities!

    I’m curious why you’re passing up on 225K AA miles (2 personal + 1 business @75K). Surely, you can go somewhere with 225K AA miles?!

  9. The British airways card may get you a companion ticket at $30k in spend but it sure won’t get you the first ticket. I could be wrong but don’t you need to earn 100k miles for the first ticket? And the premium cabin surcharges through London are ridiculous. Take away the big sign up bonus on the ba card And you are still struggling to get that first award ticket.

    My vote is plain, simple all meat and forget the potatoes. SPG for day to day value

  10. @Rick – I like your simple approach with the SPG card and I would use the SPG card once I get my companion certificate on BA. You actually need 150K miles for a First Class ticket with BA to Europe – We have 200K from the BA sign-up offers so we are good, but using a companion pass wouldn’t be an option for us without the sign-on bonus.

    But it is still great as an everyday spending card for since you need $80,000 spending to get TWO Business class tickets to Western Europe with the companion certificate.

    You would need $120,000 in spend on the BA card (to get 150,000 BA miles) for TWO First Class tickets to Western Europe using the companion card with BA, but $135,000 in spend on the Sapphire to get ONE award via Continental miles for 135,000 miles. It is a struggle, but not as much if I had to use the Sapphire instead!

    Agree that the surcharges are high, but I would gladly pay them for a better experience on BA.

  11. @MMS – I just went and looked back at the Citi offers — I keep seeing differing reports on the offer. Is the Citi VISA AA card $1500 over 3 months or over 6 months? And is the Citi AMEX AA card $1500 or $4000, and over what time period?

  12. @AK – Both the Citi 75,000 AAdvantage cards have a minimum spending requirement within 6 months. The Citi Amex used to be $1,500, but is no longer available so the only offer is for $4,000 in minimum spend.

  13. The myth is that there is a best everyday spending credit card. There’s not. As you mentioned that decision needs to be made by each individual.

    I do free credit card consulting and I find that a lot of people have cards that they overheard people talking about. They don’t know why it is the ‘best’ card. They have never asked – where do I want to go?
    My suggestion is that readers should decide (in a general way) where do I want my point to take me?, how much do I have to spend?, what class? and then start analyzing the top opportunities.
    A post like this is important in the process because it points folks in the right direction so they can start to see which of these cards would be best in their situation.

  14. @Craig – That’s a great reminder that there is usually no “one size fits all” solution!

  15. How come when I used 100,000 Starwood points to book 2 flights to London they were in coach? Did I need to specify that I wanted business class? Is it because 100,000 gets you 1 business class roundtrip ticket or 2 coach roundtrip tickets? Thoughts?

  16. @Michael - Not sure on which airline you redeemed Starpoints for, but in general it is ~60,000 miles for a coach ticket from the US to Europe so 100,000 Starpoints would get you about 125,000 airline miles which would cover 2 coach tickets. 100,00 miles would get you 1 business class ticket.

  17. Ah, that makes sense. So the 100,000 SPG points were used for 2 coach tickets.

  18. Thanks! Can I use OneWorld miles (say, AA) to redeem the ticket that I will use with the BA companion ticket?

  19. @Michael:)

    @Eric - Unfortunately not. You have to use ONLY BA miles at the rate shown in the BA chart for flights only on BA metal to be able to use the companion pass.

  20. Thanks for the info.

    I have a separate question. If I redeem an OneWorld award can I use a combo of different types of miles from two airlines but same partner (say, BA + AA)?

  21. Eric – No, you can’t use mix miles from different airline programs (say, BA & AA), but you can redeem only BA miles or only AA miles for travel on both carriers (i.e. you can redeem AA miles and travel on both BA and AA).

  22. luvflying11

    One important note for the $30K spend on Chase BA. You can’t spend the $30 using the Mint on AMEX cards (SPG, MR etc.) w/o getting the dreaded Financial Review. Chase (BA, Saphire etc.) and Citi (AA) are much more tolerant. So, I don’t think you can argue “I would rather spend the $30K” on another AMEX card to get better value than the BA to attain the free companion certificate. Between the Chase and Citi, I would rather go for the BA since I am getting 1.25 miles per $ spend and BA is in the same OW alliance as AA.

  23. @luvflying11- I’m not suggesting using the mint or AMEX gift cards to pump up spending. I was writing a more general post on the best card for everyday spending (I was assuming that everyday spending did NOT include the mint or AMEX gift cards!).

    You’re right that buying gift cards with an AMEX will likely trigger the Financial Review. Personally, I too would prefer the Chase BA for the companion pass. I don’t argue that the SPG AMEX is better than the Chase BA, but I am arguing that the SPG AMEX, the BA Chase, and the AMEX PR Gold are all better than the Chase Sapphire card for everyday spending!

  24. Pingback: SPG 30,00 Bonus | Million Mile Secrets

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  26. I guess you missed this but you will earn 2 points on airfare & hotel accommodations booked through Ultimate Rewards. Also, I couldn’t find this anywhere but I am positive that the Chase representative told me that I will earn 2 points on every dollar spent on dining.

  27. The above comment was for the Chase Sapphire card.

  28. @zeesh86 – I wrote the above post BEFORE the changes to airfare, hotel, and dining were made. But thanks for letting me know that I need to update this soon!

  29. Hi Darius,

    Quick question about British Airway Visa: If the annual spending in my household is moderate and doesn’t come close to $30K needed to unlock the full potential of the BA Visa, would you still recommend it as an everyday card?

    Thanks!

  30. @c0ldlimit- No, I wouldn’t recommend it as a regular spending card if you were not going to get the companion pass. For most folks, a regular spending card is irrelevant since we have to meet the minimum spending on so many different cards.

  31. Hi Darius—I read this again with great interest since I just finished my Sapphire required spend for 100k points and the Citi AAdvantage Plat Select Visa for 75k points. Also I finished the 2K dollar Citi Thank You Premier spent. Where would you transfer the Citi Thank you award points for best airline or hotel value? I travel DL, CO/UN, AA and Alaska. Thanks, always enjoy your posts. David

  32. OBTW I just took the Sapphire card and the AAdvantage cards ouit of my wallet and left the Alaska Vis and AmEx Gold Premier card there for everyday spending. Thanks

  33. @David – I haven’t written about the Citi Thank You card because it is like a regular cash back card. You can get 1 to 1.33 cents per point value when you redeem for flights. I’m not sure you can transfer Thank You points to other hotel or air partners. But you can buy tickets for travel on DL, CO/UA, AA & AS using thank you points.

    I am still trying to get through the $4,000 spend on my Citi Amex card!

  34. Darius,

    You might also consider the Fidelity AMEX for everyday spend, if you ever finish-off all your required spending. ;-)

    You get 2x points on everything, which you can transfer to Aeroplan 1:1, under a little-known provision. So, for $45K in spend, you get one biz class to Europe.

    For $90K in spend on Fidelity AMEX, you get two biz class to Europe, starting at zero. As you pointed out, it would take $120K in spend on Chase BA card to do the same, plus $1,200+ in fees for two (that you could have just used that $1,200+ to purchase enough Dividend Miles ($1,478 worth) to get you there with zero spend).

    It would take $145K in spend on SPG AMEX starting from zero (140K becomes 175K Aeroplan with 25% bonus, plus 5K more equals the 180K Aeroplan miles you need for 2 biz class).

    This beats the Asiana AMEX that Gary mentioned in the first post, if you live on the West Coast (or basically anything west of Chicago), since you don’t have the 10K mile roundtrip limit to contend with. If you live on the East Coast, the $40K spend on Asiana AMEX for one biz class, is lower than the $45K spend on Fidelity AMEX.

    However, there is no annual fee on Fidelity AMEX, versus a $99/year fee on the Asiana AMEX. So even if you do live on the East Coast, the Fidelity AMEX is superior, if it takes you more than three years to spend the $40K on the Asiana AMEX and to use the points. You would have been better off just spending the same $40K on the Fidelity AMEX, and buying the rest (like from Membership Rewards) for $250, and save $297 in annual fees.

  35. @Chris – Ha! I agree – for most folks the best “everyday spending” card is moot since we are moving on to the spending for the next card!

    Wouldn’t the BA card require $80K (80 X 1.25 = 100K) in spend to get 2 tickets to Europe (assuming you’re using the companion pass which you’ll get after spending $30K)? Also, $1,478 would buy only 1 ticket to Europe, but I do see where you are going with the calculations

    Another benefit of the Fideility AMEX is that you won’t pay fuel surcharges on Aeroplan, but you will on Asiana (though some of it is refunded). And as you point out the annual fee for us smaller spenders makes the Asiana card more expensive!

  36. My mistake. You’re absolutely right. $80K in spend needed on Chase BA card for 2 Business Class awards (including companion pass). I was thinking $120K becuase that’s what it is for First Class, which I think is the way to go if you want to use a companion pass, and spend the extra dough for BA fees.

    And you definitely understood my main point, that the Fidelity AMEX is for tightwads like me, with no Aeroplan fuel surcharge, and no annual fee. That card can be a long-term keeper, with no worries, good for adding to long average account age on credit score, and eventually you’ll accumulate the spending for sweeeet trips (worst case, it’s a 2% cashback card on everything).

    With annual fee cards, I always feel the pressure to either spend on it, or cancel the card.

  37. @Chris - I agree that with the companion pass the way to go is in FC, since the extra fees is going to be almost the same. The Fidelity card could also be a good long term card to build credit history since there is no annual fee! Thanks again for sharing!

  38. Here’s another consideration that would mean that Sapphire beats out British Airways. This is buried at the end of this post so perhaps it will stay secret and the “loophole” won’t get closed!

    Chase Freedom gives 5% on rotating categories. Chase Freedom Ultimate Rewards cannot be transferred to miles but they can be transferred to Chase Sapphire Ultimate Rewards. Indeed it is likely the case that all Chase xxx credit card Ultimate Rewards can be transferred to Chase Sapphire Ultimate Rewards.

    Hence $20,000 spend in rotating categories would get you 100,000 miles.

    Additionally, Chase has a shopping mall with bonus rewards, so it could conceivably be less than this and even when not spending in the rotating categories.

    Maybe a bit more complicated, but easier for most people to spend $20,000 or less a year on credit cards than it is to spend $30,000 a year.

  39. @RJacket – Good point, but the bonus categories are capped at $1,500 so it would be 7,500 points a quarter or 30K a year. But 5x the points is still a good return!

  40. Got me there. Well, seeing that Sapphire allows you to transfer into others frequent flyer accounts, you could at least get 2 cards for husband and wife getting you 60k points for $12k spend in an optimum scenario.

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