TPG reader credit card question: Which credit cards should I use to buy household furnishings?
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As we all spend more time at home during the pandemic, some of us have decided that this is the perfect time to put all that HGTV inspiration to work.
For some, that may be a new paint job and for others it may mean new furniture. Regardless, these upgrades can be pricey. On the bright side, that means there's an opportunity to earn rewards on those purchases. Reader Drew S. asked a question along these lines:
So before you go sprucing up your home, let's take a look at some ways you can maximize these upgrades.
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Option 1: Open a new card to get a welcome bonus
Investing in new furniture is pricey, but if you charge it to a new card, you can jump-start the spending required to earn a welcome bonus on a premium rewards card. That's why you may want to consider opening a new credit card if you have large purchases in mind. That new couch could earn enough bonus rewards to pay for your next flight or hotel stay.
Of course, you should always take into consideration the long-term benefits of opening a new credit card. For instance, will you use the annual travel credits on the expensive Platinum Card? Or are you a more moderate traveler who may be better served by the Chase Sapphire Preferred Card? If you're not maximizing all of the perks that come with these premium credit cards, the annual fee may not be worth it to you.
Here's a look at some of our favorite premium rewards cards that offer generous welcome bonuses:
| Card | Welcome bonus | Earning structure (% return based on TPG valuations) | Best for ... | Annual fee |
|---|---|---|---|---|
Chase Sapphire Preferred Card | 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. | 2x on travel and 3x on dining, 1x on all other purchases (2% return on everyday spending) | Long-term travel rewards at an affordable price | $95 |
The Platinum Card® from American Express | Earn 80,000 bonus points after you spend $6,000 on purchases on the card in the first six months of card membership. | 5x on airfare booked directly with the airline or through amextravel.com (on up to $500,000 on these purchases per calendar year, starting Jan. 1, 2021), 1x on all other purchases (2% return on everyday spending) | Premium travel rewards and lounge access | $695 (see rates and fees) |
Ink Business Preferred Credit Card | 100,000 Ultimate Rewards after spending $15,000 in the first three months of account opening. | 3x on travel, shipping, internet, cable and phone services, and advertising purchases; 1x on all other purchases (2% return on everyday spending) | Business spend and valuable rewards | $95 |
Related: How to complete a Chase business credit card application
Option 2: Leverage what you already have
Whether or not you're over Chase's 5/24 rule, you don't want to add another card to your wallet, or you don't want to worry about reaching a minimum spending requirement over three months, don't worry. There are plenty of other great cards out there that can help you maximize your spending. And you may even have one or two of these in your wallet already.
Here's a look at the cards that offer a return of at least 2% — no minimum spending required:
| Card | Earning structure (% return based on TPG valuations) | Annual fee |
|---|---|---|
Chase Freedom Unlimited | 1.5% cash back or 1.5x Ultimate Rewards* on purchases (3% return on spending) | $0 |
Citi® Double Cash Card | 2% cash back on all purchases -- 1% when you make purchases; 1% as you pay your bill (3.4% return on spending) | $0 |
Capital One Venture Rewards Credit Card | 2x on all purchases (2.8% return on spending) | $95 |
Bank of America® Customized Cash Rewards credit card | 3% cash back in the category of your choice (gas, online shopping, dining, travel, drug stores, or home improvement/furnishings); 2% at grocery stores and wholesale clubs -- up to $2,500 in combined bonus category spend each quarter, then 1% (3% return on spending) | $0 |
*When paired with a Sapphire card like the Chase Sapphire Preferred or Chase Sapphire Reserve
As you can see, all of these cards offer a solid amount of points per dollar spent on nonbonus spending, like furniture. However, some cards offer more flexibility than others. For instance, you can convert the 1.5% cash back earned with the Chase Freedom Unlimited into 1.5x Ultimate Rewards when paired with another Sapphire card like the Chase Sapphire Preferred or Chase Sapphire Reserve. TPG values Ultimate Rewards points at 2 cents each, increasing your return on spending to 3%.
Related: 9 things to consider when choosing a card for large purchases
Bottom line
Before making any large purchases, always take some time to evaluate your wallet. If you have the room to expand your portfolio, a new credit card is definitely worth considering as the welcome bonus alone is much easier to achieve and could be well worth it in the long run. However, be sure to pick a premium rewards card that fits your long-term spending habits, not just your short-term purchasing needs.
This should be a good start in helping Drew narrow his options and figure out which card to use for his redecorating.
For rates and fees of the Amex Platinum Card, please click here.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.