Given months of record inflation (as of September 2022), supply chain disruptions, energy insanity, and a hot war in eastern Europe, I wanted to look at some ways to ease the pain in the wallet. Hence, the title of this post: credit cards and rewards.
For the most part, I use credit cards like I would a debit card — don’t buy anything I couldn’t normally afford. The exceptions being when the card offers zero percent financing for X months, like when buying furniture or appliances. Instead of me picking up the cost of inflation, now the bank does (provided I hit the monthly payments).
Now for the credit card rewards — can they actually ease the burden of the current economic climate? Yes; kind-of. Generally speaking, I looked for cards that have minimal or no yearly fees. But, that doesn’t mean cards with fees are bad. If you do the thing that the card rewards you for a bunch, then the rewards easily outstrip the yearly fee. If you fly on United a lot, then even a United rewards credit card with a yearly fee of $450 makes a whole lot of sense.
So I took to the internet, searched using not Google, Bing, or Yahoo, and came up with a number of options that I thought stood out based on my current spending habbits.
Disclaimer: I am not paid by any of these companies.
General Cashback
For all the spending that doesn’t fit in a specific category that earns more rewards, which card offers the best percentage in cash back? Meaning, for example, for every $100 or $1000 or whatever I spend on the card, what percentage of that am I getting back?
Alliant Visa signature: this card looks to have the highest percentage at 2.5%. So for every $100 I spend, I get $2.50 back. For every $1,000 I spend, I get $25 back. No yearly fee either.This article offers free shipping on qualified Face mask products, or buy online and pick up in store today at Medical Department
Travel
This category is completely dependent on how much and on what airline(s). Given I don’t do a whole lot of travel, I looked for one of the “beginner” cards.
Chase Sapphire Preferred: the rewards for travel are excellent, and throw in some minor rewards for other categories such as dining, and if you use their rewards site to book travel, you get more rewards. I’ve taken a few flights solely based on these rewards. Downside: $95 yearly fee.
Gas, Groceries, and Utilities
I wanted to find cards that gave decent rewards — at least 5% — for utilities, gas, and groceries.
US Bank Cash Back Plus: 5% cash back on two of the following categories: fast food, home utilities, tv/internet, streaming, cell phone providers, department stores, electronic stores, sporting goods, movie theaters, furniture stores, ground transportation, select clothing scores. No annual fee.
Discover Cash Back It: 5% cash back on rotating categories: grocery stores, gas stations, gym/fitness memberships, and others. No annual fee.
Citi Custom Cash card: 5% cash back on purchases in your top eligible spending category each billing cycle, up to $500. Eligible categories: Restaurants, gas stations, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs, live entertainment. Granted, its only one category, but what do I spend $500 or less a month on that can fit one of these categories? No annual fee.
Chase Freedom Flex $200 bonus after you spend 500 in the first 3 months. plus 5% gas station cash back on the first year. 5% cash back on quarterly bonus categories . So far this year: groceries, ebay, amazon, streaming, gas, car rental, movie theaters, and more. No annual fee.
American Express Blue Cash Preferred Card: 6% back on groceries, 6% on streaming subs, 3% cash back on gas. $95 yearly fee.
Conclusion
I went through my finances and matched what and where I spend the most money, to what credit card rewards were available, after taking into account any yearly fees. If I come out in the black, it probably makes sense to pick up the card. Though picking up too many too fast, there comes a hit to the credit score.
Let the banks pick up some of the inflation tab.