The Best Everyday Spending Credit Cards

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The Best Everyday Spending Credit Cards

Million Mile SecretsThe Best Everyday Spending Credit CardsMillion Mile Secrets Team

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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 Rewards 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 SPG points  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.

SPG points 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 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!

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.

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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.

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.

Author
Million Mile Secrets

@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!

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.

Author
Million Mile Secrets

@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!

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.

Author
Million Mile Secrets

@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!

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

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