Reader Email Sunday: Which Credit Card for Everyday Spending

by on June 26, 2011 · 22 comments

in Sunday Reader Questions

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” Hey Brian,

I am new to this world of working the travel system. I want to get a card
for everyday purchases to start accruing mileage points, which one do you
recommend for your everyday spending and why?

Thank you!
Mel “

TPG: There are a lot of good cards out there, but I do think there is one
clear winner right now – Chase Sapphire Preferred card.

The $95 annual fee is waived for the first year and they are currently
offering 50,000 points (Update: offer is now for 40,000 bonus points at sign-up) if you spend $3,000 within the first three months. Points can be transferred to both airlines (Continental and British Airways) as well as hotels (Hyatt,
Marriott, Priority Club) and Amtrak. Also, you can use the points to
buy tickets on any airline and each point is equal to 1.25 cents. A
$400 flight will cost you 32,000 points (and you’ll earn miles on that
flight.). Two other good features are: 1) No foreign transaction fees
(which can save you up to 3% on all spend when you travel outside the
US) and a 7% bonus on all points earned. So if you earn 50,000 points
a year, you’ll get a year-end bonus of 3,500 points.

Basically, at a minimum you are getting $625 in value for a card
with no fees for the first year and a bunch of benefits. I believe this
is the best all around offer right now for someone who wants to accrue
valuable and flexible points.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Phil

    I agree the *sign-up* bonus for the Chase Preferred card is nice, and one should definitely make use of it, I cannot see how this could be viewed as best every day card. Well apart from the fact that all the waiters and waitresses swoon at the fancy metal design :) I laid out my thoughts on why in Gary’s view from the wing post, but really can’t see any argument for using this card for everyday use until Ultimate Rewards has more useful options than Hyatt or Continental (two high value options but not as compelling as Amex Membership Rewards flexibility)

  • Gary Leff

    Phil said, “Well apart from the fact that all the waiters and waitresses swoon at the fancy metal design”

    Y’know, I got asked yesterday at the dry cleaners if my Continental Mastercard “was a Black Card.” They don’t take Amex and I had the Continental card in my pocket (which is odd, ’cause I mostly use it for online shopping until next month when they kill double miles for purchases made through their portal).

    Chase has had some nice card designs lately. Sadly, the SPG Amex keeps getting uglier and uglier. I far prefer the old BLUE design…

  • The Points Guy

    @Phil- I think Amex is great but Ultimate Rewards has much better hotel transfer options and since it’s a MasterCard, accepted in more locations than Amex. So I someone only had one “everyday ” card, I’d think that was a better option- especially since the fee is waived and the bonus is generous. Though I think you bring up a good point that there is no clear winner- what works for one person may not work for another

    @Gary- that’s hysterical. I mean, you are a C level executive (right?) ao maybe it wasn’t so far fetched for her to think you had a “black” card :-)

  • Gary Leff

    Our CEO keeps wanting me to get the business centurion card… And I refuse because I won’t pay the fees. Of course the Business version doesn’t give you the same regular luxury ‘gifts’ that the personal card does. So really it’s just wallet candy, the Platinum card (which we do have) plus airline status. And I don’t really value US/DL non-top tier status at the price of the card. Perhaps it’s myopic of me, and perhaps there’s still enough cache to be worth plunking down for. But I’m way too cheap. =)

  • harvson3

    I think the answer to Mel is little more nuanced than this.

    If Mel’s question were “which card can I get that gives me the best bonus?” then your above answer is correct. It would take a lot of spending to equal the bonus of $500-$625, unless big new 100,000 bonuses start popping up again.

    If her (his?) question was “which card will get me the most points and is worth holding onto for a long time?” then it all depends on Mel’s spending pattern. Her return on spending varies from 1.07% on regular spending to 1.25*1.07=1.34% for travel spending. If she (he?) spends a lot, that’s not a terribly great return. There are cards out there that return rates of 2% to 6%. If she travels primarily on a specific carrier, or just happens to live near a big hub with few alternatives, then an airline-branded card may make better sense.

  • harvson3

    To clarify: the 1.07-1.34% return is for Chase Sapphire Preferred. The rate is higher for travel booked through their portal, obviously.

  • The Points Guy

    @harvson- the question was vague so I interpreted as “as a new person to miles, if I had to get one card that has a good bonus, valuable points and other benefits- what would it be?”

    While I agree that you can get better return with other cards based on your specific spend and goals- the Chase Sapphire Preferred is a great “all around” card with a generous signup bonus, good transfer partners, waived fee and no foreign transaction fees. Chase also has excellent customer service.

  • tassojunior

    For permanent no-fee cards I chose the BofA Fidelity AmEx which earns 2 Worldpoints per $ spend and can be converted to Aeroplan *A miles 1:1. Second choice is the Chase AmTrak which earns 1 mile per dollar which can be converted to Continental 1:1 up to 30 or 50K per year.

    Of course this is after you do the spend on all the big bonus cards that have been coming out.

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  • mrlassen

    I just found out that you can not set up a online account with Chase Bank if you computer has the newest edition of internet explore 9. Chase banks system is not compatable with it. Their system is only compatable with the older systems, 7 and 8. To book travel you must call an 800 number and talk to a person. This eleminates your ability to shop for travel and receive the 25% less points needed for ticketing.

  • Mel

    Thanks for all the help! I actually signed up for the Chase Sapphire Preferred a few days ago, sounds like I made a good decision for getting my feet wet in frugal traveling! My question was sparked from The Frugal Travel Guy’s rookie tips in which he recommends the Starwood Preffered Guest card for everyday purchases. I called Starwood to do some research, the woman told me they will be doing a (one month only) 30k sign up bonus in July, so if I do sign up I will wait until then. She also said that you get 2 points for every dollar spent…for all you SPG users, is that correct? If so, isn’t that much better than the typical 1:1 ratio…or does the value depend on where you decide to transfer the points to? It’s still a little confusing to me.

    Outside of our typical (1-2 times a year) trip back to Oregon to visit family (from San Diego – usually flying Alaska Airlines), I hadn’t really thought about the possibility of any other travel goals…now I am excited about the possibilities!

    So as far as my specific goals go, I’ll start out small while I learn the ropes –
    1. Pay a discounted or free rate for our trips to Oregon each year
    2. Have the option of a free or very affordable family vacation (family of four) each year.

    We (my husband and I) would like to start putting our everyday expenses and bills on one card that will help us accrue miles towards these goals – assuming this is the best way to accomplish that. ?? I will take all the advice and tips I can get! Thanks so much!

  • David

    @Mel: The SPG AX gets 2 pts/$ at SPG properties and SPG restaurants, but only 1 pt/$ everywhere else.

    I currently use the FIA AX card to get Aeroplan pts at 2pts/$…and these pts transfer instantly. I like the Aeroplan website, and being able to book travel to Asia via Europe, without a phone booking fee.

    However, if I did buy more airline tickets and gas/groceries, it would be hard to turn down the AX Premier Rewards card. On its own, the 15K bonus for $30K spend should not be a deciding factor, as this only yields 45K pts/$30K, whereas the FIA card gets you 60K Aeroplan pts/$30K spend. However, as stated before, AX MRs are more versatile for some people, but I like the Star Alliance, and Aeroplan.

  • ArlingtonTraveler

    Has it been announced that whether the new United will still be a conversion partner? Of all the transfer opportunites, they are all with entitites (Continental, Hyatt, Amtrak, BA) for which BA is also their credit card issue. That makes me believe transfers will continue, but nothing is for sure in the world of frequent travel programs.

  • Carl

    Chase Sapphire is good choice if one is to use only one card and since it is a MC, has wider availability. But if Mel is willing to expand his horizons, as others pointed out here and elsewhere, a mix of SPG Amex, Amex PRG, and BA Visa seem to offer a bit more and the use of each card should be tailored to the type of spend to obtain the maximum benefit. Obviously waiting for the lucrative sign-up bonuses before applying is a good way to build up substantial point balances.

    By the way, its not talked about much, but the Amtrak bedroom award at 20k miles is a great use of Sapphire points.

  • mike

    I’m in a similar situation as Mel, but simpler: I’m also new to this, and my only goal is accruing miles to bring down the cost of flights. I live in NYC, and with three airports near me I really don’t care about which airline I get miles for (preferably miles I can use for any airline, but again, don’t really care). So are we saying this Chase card may be the best option?

  • The Points Guy

    Arlington- thats a good question- I’d assume so, but will get confirmation on that.

  • The Points Guy

    Michelle- I think you made the right choice. It would be unwise to not consider huge sign-up bonuses when deciding what card to get. Now in a year when its time to renew at the $95, I definitely think you should evaluate your spend and goals and reasses what card works best, but I firmly believe the Sapphire Preferred with first year fee waived and 50k signup bonus is a good card that will get you flexible, valuable rewards

  • ArlingtonTraveler

    TPG thanks for following up. I meant to say in my post all the conversion opportunities to frequent travel programs are with entitites (Amtrak, Hyatt, BA, and Continental) that Chase is the primary credit card issue for. The big exceptions are United and Intercontinenal Hotels Group (Priority Club) both of which Chase does issue the credit card but are not conversion opportunities for Chase Sapphire holders. My only guess is that both IHG and United may be charging Chase a lower rate for miles/points purchased for their affinity cards and another rate for conversions from Chase Sapphire.

  • PJ

    nice to take advantage of 5 % rebate on rotating categories from Chase freedom Visa and Master cards. even NICER if you have more than one card in your family since the quarterly cap is 1500 spending per card. The new signer bonus is BEST ever $100 to spend 500/3months 1000/6months
    the small sweenter is when you have their fee free ( 1500 MIN BAL) checking , each swipe earns 10 cents and 10 % extra bonus. all cards are fees FREE.
    third quarter 5 % items are GAS TRAVEL Yummy!!

  • Adam

    Here is a question that I haven’t seen addressed. Right now I have 3 cards that I use.

    Amex Blue Cash
    Amex Green Card
    Citi Card – Premier Pass

    I have read articles about the importance of credit scores. I have a 2-part question:

    1) Do you cancel credit cards that have annual fee’s even though I have read it hurts your credit score to close accounts? Are there drawbacks to owning 10-15 credit cards if you only use 3-4 at a time?

    2) I am considering adding more credit cards based on what specials are being offered but have reservations about my FICO score?


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