Few months ago we ran a giveaway on our Facebook page and asked followers to suggest post topics. Here is one request that will probably resonate with many people:
So, I wanted to put together a post on best long-term two-card combinations for those who fall in the lower middle-class bracket. Last week I’ve highlighted best current sign-up bonus opportunities, but I recognize that this strategy isn’t for everyone. So, here is what I suggest for regular people who want to maximize rewards on their everyday spending AND who want to keep it simple (relatively speaking).
This analysis will mainly focus on cards you should use on a daily basis. There are products (including airline co-branded cards) that are worth renewing mainly for perks. That’s not what I’m talking about here.
See this list for reference and application links
1. You prefer cash back, regularly shop at a grocery store and don’t eat out that much.
Look into Amex Blue Cash Preferred and Citi Double Cash cards. The first one earns 6% cash back on groceries (on up to $6,000 per year), 3% on gas and department stores and 1% on everything else. There is an annual fee of $75, but it’s worth it to get 6% on groceries.
Amex also has a savings program called “Offers for you” that you can access in your profile. Those discounts should mitigate the annual fee somewhat. Citi Double Cash earns 2% cash back on everything and has no annual fee. So, the idea is to maximize Amex bonus categories, and use Citi card for everything else.
2. You prefer cash back, shop at Sam’s Club, and spend a good bit on groceries, dining, travel and gas.
Look into Amex Blue Cash Preferred and Sam’s Club MasterCard. The first one is easy. But why the latter? It earns 5% cash back on gas (on up to $5,000 per year), 3% on travel and dining. You do need to have Sam’s Club membership, and from what I’ve understood, you have to cash out your rewards inside the store. I’m guessing they are hoping people will shop while there?
Still, I think it’s a powerful combination overall. If you can find a gas station that will let you buy Visa or MasterCard gift cards with a credit card, you can potentially earn 4% on some of your spending (after you deduct 1% gift card fee).
3. You prefer cash back, spend a good bit on dining, travel and airfare and don’t have a Sam’s Club nearby. You also shop at Walmart for groceries.
Look into Uber Visa card and Citi Double Cash. Uber card is a relatively new product, which happens to be an excellent choice for cash back lovers:
You will get 4% back on dining, 3% on travel and airfare, 2% on online purchases, 1% on everything else
Up to a $50 credit for online subscription services after you spend $5,000 on your card per year
Up to $600 for mobile phone damage or theft when you pay your mobile phone bill with your card
No foreign transaction fees
No annual fee
4. You like cash back, and are able to utilize Spirit off-peak redemptions. You have relatives who live near Spirit hub, and absolutely have to visit them a few times per year.
Look into Amex Blue Cash Preferred and Bank of America Spirit Signature MasterCard. I do think that despite potential drawbacks, Spirit program can be extremely lucrative for some families. We recently flew Spirit from Orlando to Newark roundtrip for only 5,000 miles per person, and survived. Bank of America will give 5,000 miles bonus when you put $10K on Spirit MasterCard per year. So, the idea is to use it for most of your non-bonus spending.
5. You prefer to collect flexible points, and plan to transfer them to traditional airline miles.
Amex EveryDay Preferred and Citi Double Cash (alternatively you can use Chase Freedom or US Bank Cash Plus). The first one earns 4.5 points on groceries, 3 points on gas, and 1.5 points on everything else. You do need to have 30 transactions in one billing period in order to hit that payout. Citi Double Cash is mostly here as a backup, in case Amex isn’t accepted. Chase Freedom and US Bank cards can be useful if you want to maximize rewards on 5% categories.
You can also use Amex EveryDay Preferred to purchase Visa gift cards inside gas stations, thereby increasing your rewards.
If you have a business, consider adding The Blue Business Plus Amex card into the mix. It earns 2 MR points per dollar on everything.
6. You prefer to collect flexible points, and mostly plan to transfer them to Hyatt and Southwest Rapid Rewards.
Chase Sapphire Preferred and Chase Freedom. Alternatively, you can get Chase Sapphire Reserve instead of CSP. However, since we are talking about a lower-middle class family, it would be hard to justify $450 fee, even when factoring in $300 credit. See my post where I compare CSP and CSR.
Ultimate Rewards is the only flexible program that partners with both Hyatt (read my post on best Category 1 redemptions) and Southwest.
7. You have the time and patience to maximize 5% categories.
Look into Discover IT and US Bank Cash Plus. Both are excellent options due to 5% categories. There is a twist with the former. Discover will actually double your rewards earned during first year. So, essentially, you will be getting 10% in rotating categories. I really like Discover It and consider it an excellent “keeper” choice for everyone.
US Bank Cash Plus is a unique product because you can choose your 5% categories each quarter. This can be very helpful if you need to buy a furniture set etc, because you won’t find “furniture stores” listed as a 5% category on any other card.
Right now you can get $150 bonus after spending $500 in 90 days, so the barrier to entry is very low.
Bottom line
Obviously, there are many potential combinations I haven’t outlined, so do your own math. But hopefully, this write-up will encourage you to come up with the best choice for your family.
In general, I don’t see how most low spenders will come out ahead when paying an annual fee on a premium card. I strongly recommend you consider no-fee products first because coughing up that $95 (or more) each year will eat away at your rewards.
Staying at Hyatt and flying Southwest via Ultimate Rewards transfer is great, but it certainly isn’t free since you could be earning cash back instead. Don’t be seduced by the siren call of the word “free” that is so often used in this hobby. There is no such thing when it comes to travel.
P.S. Some of these cards pay us commission if you apply through the site. Thanks for your support!
Click here to view various credit cards and available sign-up bonuses
Author: Leana
Leana is the founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.
I love these kinds of posts. I often try to come up with good 2 card combos since my wife has a tough time keeping track of which cards to use where.
I actually like the combination of the AMEX Blue Cash Preferred from #1 with the Uber card in #3. The bonus categories compliment each other well, plus you have a Visa to use at Costco and other places that don’t take AMEX. The main problem is that you’re still only getting 1% on non-bonus spending.
Another combo that is worth mentioning if you happen to have accounts with Bank of America is the no AF Cash Rewards combined with the new Premium Rewards card. You basically have all the main bonus categories covered along with 1.5% on non-bonus spending. You’ll get a minimum of 3.3% on Gas, 2.2% on Grocery and Wholesale Stores, 2% on Dining and Travel, and 1.5% on non-bonus spending. The more money you have in BofA accounts (like a Merrill Edge IRA) the more these increase and you can get up to 5.25% on Gas, 3.5% on Grocery/Wholesale/Dining/Travel and 2.62% on non-bonus spending. Plus if you can take advantage of the $100 travel credit you erase the annual fee.
I know you can often do better with transferrable points but from a pure cash back perspective with a low annual fee these seem pretty solid.
@Robert I’m so glad you enjoyed this post! Usually, when I do this type of analysis, I later get comments from readers that it bores them to death. 😉 But it is important to highlight the easiest strategies to maximize the return on everyday spending.
I really like Uber card and agree that it pairs nicely with Blue Cash Preferred. Ideally, it would be good to add a 2% card into the mix, but it’s a good combination regardless. Overall, cash back in this hobby is highly underrated. I love transferrable points, but many people will do better simply collecting cash. Not as exciting, I know!
As far as BoA cards go, I totally agree that relationship bonus can be a game changer. But I mostly tailor my content to regular folks who probably don’t have the combined assets in order to qualify for the increased payout. The Merrill Edge IRA is an interesting possibility. I’m not familiar with it and besides, I’m partial to Vanguard. But it is a good option to keep in mind.