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Everyday spending is an important piece of the travel rewards puzzle. While it doesn’t offer the “get rich quick” feeling of a shiny 100,000-point sign-up bonus, it can help you top off your balance to get that next award or diversify your points into a different program you wouldn’t otherwise use much. Here are the cards that offer the best return on everyday non-bonus spending.
There are many credit cards on the market today, but only a handful are worth considering when it comes to non-bonus everyday spend. Here are seven of the top possibilities, ranked by value in the first year and assuming $20,000 in non-bonus spend during that year:
|Welcome Bonus||Annual Fee||Points Earned Based on $20,000 in Non-Bonus Spend||Total Return in First Year (based on TPG valuations)|
|Capital One Venture Rewards Credit Card||50,000 miles ($700 based on TPG valuations)||$95 (waived first year)||40,000 miles||$1,610|
|Barclaycard Arrival Plus World Elite Mastercard||70,000 miles ($735 after 5% rebate on redeemed miles)||$89 (waived first year)||40,000 miles||$1,155|
|Amex EveryDay® Preferred Credit Card from American Express||15,000 Membership Rewards points ($300 based on TPG valuations)||$95||30,000 points (assuming 30 transactions per month)||$805|
|The Blue Business℠ Plus Credit Card from American Express
|Chase Freedom Unlimited||$150||$0||30,000 points||$750|
|Bank of America Premium Rewards credit card||50,000 points ($500)||$95||30,000 points||$705|
|Citi Double Cash Card||None||$0||$400||$400|
And here are the same cards ranked by their effective return in the second year and beyond:
|Annual Fee||Earning on Everyday Spend||% Return (Based on TPG valuations)|
|The Blue Business℠ Plus Credit Card from American Express
||$0||2x Membership Rewards||4%|
|Chase Freedom Unlimited||$0||1.5x Ultimate Rewards||3%|
|Amex EveryDay® Preferred Credit Card||$95||1x Membership Reward point, 50% bonus points after making 30 purchases in a billing statement. Terms apply.||3% (with 50% bonus)|
|Capital One Venture Rewards Credit Card||$95 (waived first year)||2x Venture Rewards miles||2.8%|
|Barclaycard Arrival Plus World Elite Mastercard||$89 (waived first year)||2x Arrival miles, 5% rebate when you redeem miles||2.11%|
|Citi Double Cash||$0||2% cash back (1% cash back when you buy, plus an additional 1% when you pay for those purchases)||2%|
|Bank of America Premium Rewards credit card||$95||1.5x points (with up to a 75% bonus depending on your status in the Preferred Rewards program)||1.5% to 2.625%|
Let’s break these options down one by one, taking a look at how these returns are calculated and which options might be right for you personally.
Capital One Venture Rewards Card
The Capital One Venture Rewards Credit Card earns 2 miles per dollar spent, and those miles can be redeemed at a fixed rate of 1 cent each as statement credits to “erase” travel purchases you’ve made in the last 90 days. However, starting in December 2018, you’ll also be able to transfer your miles to a selection of airline partners, including Air Canada Aeroplan, Avianca LifeMiles and Etihad Guest. Based on TPG’s valuations, transferring to these partners could get you about 1.4 cents per mile in value, meaning the 2x earning rate on this card equals a 2.8% return.
The card comes with a $95 annual fee (waived the first year), and you’ll also have access to one outstanding bonus category — 10x miles earned on all purchases made at Hotels.com with the Venture Rewards card when booked and paid through the special hotels.com/Venture link.
Barclaycard Arrival Plus World Elite Mastercard
There are no bonus categories on the Barclaycard Arrival Plus World Elite Mastercard, but you’ll earn 2 miles per dollar for everything you pay for with the card. Arrival miles are only worth 1 cent each, so you won’t get oversized value for them, but you can apply them to any travel-related purchases made on your Arrival Plus card and receive a statement credit against that purchase, essentially wiping out the cost. You’ll also get a 5% rebate on all redeemed miles, making the effective ongoing return on this card 2.11% for everyday spend.
There’s one caveat to note with this card: although you can use as little as 2,500 miles to offset your account’s account annual fee at one cent apiece, the minimum travel redemption amount is $100. So, you’ll need to have 10,000 Arrival miles at any given time in order to apply them toward a travel purchase and you can only apply miles toward travel purchases made in the previous 120 days. But with the massive 70,000-mile sign-up bonus currently available and the waived annual fee for the first year, it’s probably worth giving the card a shot.
Amex EveryDay Preferred Card
The Amex EveryDay® Preferred Credit Card from American Express can be a lucrative option if you’re willing to commit to it. In addition to 2x points at US gas stations and 3x at US supermarkets (up to $6,000 in purchases per year), you’ll earn a 50% point bonus after making 30 or more purchases in a billing cycle. If you’re able to do this, you’ll effectively be earning 1.5 Membership Rewards points on all your purchases, but if you only make it to 29 purchases, you’ll be stuck earning 1x on non-bonus spend.
You’ll have to take a look at your own spending history and see if you can consistently maximize this card, but even at its best, it still comes up somewhat short of the Blue Business Plus. The Everyday Preferred has a $95 annual fee while the Blue Business Plus has none, and obviously 1.5x is less than 2x. Still, it might be a good choice for those folks who can’t get a business card, or who might have more than $50,000 a year in credit card expenses.
Amex Blue Business Plus
The Blue Business Plus Credit Card from American Express is a relatively new addition to the Amex portfolio, but boy, does it pack a punch. This no annual fee credit card earns 2x Membership Rewards per dollar spent on all purchases, up to $50,000 in a year; then 1x. TPG values Membership Rewards points at 2 cents each, meaning that this card gives an unparalleled 4% return on all spend. Maxing out this card would earn you 100,000 Membership Rewards points a year, which is enough to unlock some pretty impressive redemption options.
Small business owners will also appreciate that this card borrows some of the best elements of Amex charge cards. Specifically, you have the potential to be able to spend beyond your pre-approved credit limit as long as you pay off the balance in full during the next billing cycle. The only downside of this card is that it’s a business card, not a personal card, so not everyone will be able to apply for it (though you may be more eligible than you think).
Chase Freedom Unlimited
The Chase Freedom Unlimited has been around for a while, and savvy users know that it pairs perfectly with Chase’s premium credit card offerings. The Freedom Unlimited is billed as a cash-back card, currently offering a sign-up bonus of $150 after spending $500 in the first 3 months. But that cash back comes in the form of Ultimate Rewards points, which can get you much more than 1 cent of cash back with the right combination of cards. If you also hold a premium Chase card, such as the Chase Sapphire Reserve, the Chase Sapphire Preferred Card or the Ink Business Preferred Credit Card, you can transfer the points from your Freedom Unlimited to one of these cards and turn them into full-fledged transferable Ultimate Rewards points, worth as much as 2 cents apiece based on TPG’s latest monthly valuations.
While the Freedom Unlimited is often easier to get approved for than most premium cards, it is subject to Chase’s 5/24 rule. This means that you’ll be automatically rejected if you’ve opened 5 or more new cards in the last 24 months. This is one of the many reasons I think the Freedom Unlimited is the perfect starter card, and a simple and easy introduction to the world of free travel.
Bank of America Premium Rewards credit card
This card becomes extra appealing for non-bonus spending if you have high standing in Bank of America’s Preferred Rewards program. If you have more than $100,000 in assets with BoFA (including investment and retirement accounts), you could get a 75% bonus on all points earning — meaning the 1.5x points you earn on non-bonus purchases with the Premium Rewards Card would be boosted to 2.625x points.
If you don’t have the requisite $100,000-plus in assets to secure the 75% bonus that comes with the Platinum Honors tier of the Preferred Rewards program, note that there are two lower tiers: Gold ($20,000-$50,000 in assets), which gets a 25% points bonus, equal to 1.875x points on non-bonus spending, and Platinum ($50,000-$100,000), which gets a 50% points bonus, equal to 2.25x points on non-bonus spending.
Citi Double Cash
While earning points and miles toward free travel is the way to earn the most lucrative credit card rewards, some people prefer the simplicity of cash back. For them, the Citi Double Cash Card is probably a perfect choice. It comes with no annual fee and a total of 2% cash back on all purchases — 1% when you make a purchase, and an additional 1% when you pay for it on your statement.
This card is as easy as it gets — no bonus categories, no points to redeem and no award space to chase. The one quirk to be aware of is that this card doesn’t waive foreign transaction fees, so you’ll want to use a different card when you’re traveling internationally or making overseas purchases. You also won’t earn outsized returns with this card — there’s no maximizing your points with cash back. But for folks who just want a solid cash-back card, this is a perfect choice.
No matter what your shopping habits or travel goals are like, everyone should be able to find at least one card on this list that works for them. Just make sure that no matter where you go, on top of your regular bonus category credit cards, there’s also a card in your wallet that’s getting you the very best return on your everyday purchases.
Featured image by ozgurcankaya / Getty Images.