Best credit card for every spending category

Best credit card for every spending category

Now there are a lot of credit card options out there and it can be confusing to know which credit card is best to use in which category of spending but this is very important 

If you want to earn the maximum amount of rewards points or cashback that you can go on to use for free luxury travel or just to buy things that you want 

So supermarkets and grocery stores is a very very common category some people could even be their biggest category of spending where you can earn a lot of credit card points and cashback that you could use for free travel at the end of the year 

So let's Dive Right In First up is the 250 a year annual fee MX gold now this is a great card for grocery it earns four points per dollar on U.S supermarkets up to 25 000 in spend per year and then it goes down to one point per dollar 

Now what's nice about American Express membership rewards points is they're very flexible so you can transfer them to Airlines you can book travel directly to the travel portal or you could use them for gift cards or cash back most points and Miles enthusiasts will value American Express points at around 2 cents per point 

So that four points per dollar on groceries actually works out at about an eight percent return on your spending the annual fee on this card of $250 is also offset by $20 worth of credits that take the effective annual fee down to thirty dollars 

Now as great as the AmEx gold is if you're not such a points and Miles Enthusiast and instead you're on team cash back the AmEx gold does get outdone by the Amazon Rewards Visa signature card and also the 95 a year American Express Blue Cash Preferred Card which earned five percent and six percent respectively in this category

Now even though these cards earn higher rates they do have restrictions the Amazon card obviously is limited to Amazon and Whole Foods grocery store and the blue cash preferred is six percent but it is limited to six thousand dollars in spending per year and then it goes down to one percent 

Now dining is another huge spending category for some people and with the two cards I'm going to talk about the points in cashback can really add up 

So the first one is again the AmEx gold which also earns four points per dollar on dining at restaurants worldwide and that's another reason why the AmEx gold is a favorite daily driver of mine I always keep it in my wallet 

Now if you are on team cashback the Discover It Card which has rotating quarterly categories currently for quarter three of 2022 is offering 5 percent cash back at restaurants on up to one thousand five hundred dollars in spending for the quarter what is more 

If you are in the first year of card membership they actually do cash back match as a kind of year one welcome bonus so they will match everything you earn in the dining category 

So it's basically like earning 10 cashback on dining for the quarter now if you're trying to do what we're trying to do find the best credit card for every single spending category 

So for travel, you have a few 5x options and also one card that actually offers you 10x the caveat with travel though is that most of these cars that are offering 5 or 10x points back per dollar you have to book through their own travel portals

The no annual fee Chase Freedom and Chase Freedom unlimited both earn five points per dollar but only through the chase travel portal

The Capital One Venture and Capital One save cash rewards both earn 5x on hotels and rental cars again through the Capital One travel portal only and if you hold the 395 dollar Capital One Venture X you're in the elite 10x earn rate again if you go through the Capital One travel portal and it's only on hotels and car rentals the rate for flights is 5X which is still obviously amazing 

If you don't want to be limited by a travel portal and you want to get five points per dollar on flights directly with Airlines then you will need the American Express Platinum Card which does have a 695 annual fee there are credits to offset that annual fee but the card is quite a big commitment

Now some of you like to do a lot of shopping online and may even be big amazon Spenders, especially over the last few years with the pandemic so obviously if you're doing a lot of spending at Amazon the Amazon Prime Rewards Visa Signature card is a no-brainer because it gives you five percent back on all your Amazon spending 

If you shop at other online retailers a really good card for you will be the AmEx blue everyday card which just recently added three percent cash back on online shopping on up to six thousand dollars per year in spending 

Gas prices climbing and no end in sight you are definitely going to want to maximize points in cashback earning on your gas spending and right now in this quarter there is one credit card that Reigns Supreme for gas spending and that is the Chase Freedom Flex 

Now the reason is that the freedom Flex has 5x points per dollar on gas this quarter as part of its rotating quarterly categories you can get that on one thousand five hundred dollars worth of spending for the quarter 

But in addition to that if you are a new card member of freedom Flex there is currently a deal for five percent or five points per dollar back on gas on six thousand dollars worth of spending in the first year 

So when you add them together it actually becomes nine percent and you might be wondering wait a minute five plus five is nine here's how it works if you look at the terms and conditions the five percent for the quarter is one percent on base spend plus four percent extra to make up five percent 

Now the gas bonus for new card members is also worked out the same way but the one percent or 1X on base spend that you don't get that twice so you just get two times four percent added to your one percent it makes nine percent all right just trust me 

If you don't understand it just trust me it's nine percent and chase points have an average value of two cents per point so it's actually eighteen percent back on your gas spending which is really amazing 

Drugstores and I'm mentioning this now because this is another perk of the Chase Freedom Flex you can earn three points per dollar on all your drugstore spending streaming 

Now a lot of us hold some sort of streaming service and as you know every Point matters and this is a kind of set it and forget it thing all right because once you've entered the card into your streaming service it'll just be paying the bill every month 

So you don't really need to worry about it Blue Cash Preferred from American Express which is kind of the Big Brother of Blue Cash every day with a 95 annual fee earns six percent cash back on our streaming subscription and things like Disney Plus Hulu SiriusXM Etc 

So if you hold that card make sure you link it to all your streaming services but it's not just about the points you see the AmEx Platinum actually has a 20 per month digital Entertainment Credit which can be used for things like Disney Plus Hulu ESPN Plus or the Disney bundle which is all of them together

Well as Sirius XM and some other subscriptions like the New York Times I think is on there too so if you have those Disney plus Etc you might as well use your Amex Platinum to get back that credit and offset the 695 annual fee that you've paid because that's actually way more value than just earning six percent on every dollar you spend the credit you're actually getting the full amount back each month 

Now some of you may not want to have multiple cards you might just want to dip your feet in and have one card to catch or or you might want a specific card to use for non-category spend where there's no obvious category like travel or dining or whatever and for this purpose the Capital One venture or the Capital One Venture X are great 

because they just earn two points per dollar on everything and these Capital One points are now transferable at one to one to a load of different Airline Partners you could also go for the city double cash which earns two percent cash back on anything 

But now the city cash back can actually be transferred into city thank you points and transferred to the other Citi cards like the Citi premiere Etc and from there you can book travel or transfer to Airlines now that we've gone through all that 

Let's just give an example of how much more points you can earn when you really maximize your categories we will give three categories as an example dining Grocery and gas and just for ease of math we'll use a thousand dollars per month in each category 

I know a thousand dollars per month on gas is kind of a lot but you know whatever let's just do it and we'll compare those of you that use cash debit cards a one point per dollar earning card to people who are maximizing their categories correctly 

so it's pretty obvious that the cash or debit card people will earn no points on their spending the people using cards that just earn one point per dollar on things will earn a total of 1 000 points per one thousand dollars spent so that's three thousand points in total 

Now we get to the credit cards if you spend a thousand dollars on the annex gold at grocery stores and at restaurants, that's four thousand points each in each of the categories so that would be eight thousand total Amex membership rewards points and then on the freedom Flex

If you are a new member of the card and you're enrolled in the quarterly categories you'll be earning 9 000 points on your thousand dollars worth of gas spending and as you can see everyone spent three thousand dollars but the cash and debit card people earn zero 

The basic one percent One X credit card people earned three thousand points and the people who maximize their cards actually earn 17 000 points which under most situations would be redeemable for one hundred and seventy dollars in cashback or a lot higher as you transfer the points to Airlines 

Citi custom cash that earns five percent back which is also convertible to 5x city thank you points back in the following categories restaurants gas stations grocery stores select travel select Transit select streaming services drugstores to home improvement stores fitness clubs and live entertainment 

So you can see that that actually covers almost all of the categories so rather than in each category just mentioning hey you could use the city double cash will get kind of annoying if that's the case so instead I'm just putting it here at the end and basically whichever category you spend the most in per month on that card that will be the five percent category and it's limited to 500 in spending per month all right 

so if you have cards for some of the other categories but there's one category that you are lacking in and you spend maybe a little under 500 or maximum 500 that would be a good card to put all of that spending on the city custom cash and get the bonus for that category for example gas personally I spend about 500 a month on gas

There's another card from Bank of America that can actually get you some really good cashback rates on one category that you choose and that would be the Bank of America customized Cash Card I know the name's very similar isn't it City Custom cash Bank of America customized cash anyway this card earns three percent cash back per dollar in one category that you choose from this list gas online shopping dining travel drug stores or Home Improvement and Furnishings 

Now it's only three percent so you might be like well that's not the best card for any category however if you have preferred rewards from Bank of America it gets a lot better 

so if you're a platinum honors member of preferred rewards basically to get that you have to have over a hundred thousand dollars invested with Bank of America you get a 75 bonus on your credit card rewards and that means that that three percent will now become 5.25 in any of those categories so you could earn 5.25 in online shopping for example 

But remember you can only choose one category so this would just be a card to cover a category that you don't already have a card for and to get the 5.25 you do have to have a hundred thousand dollars invested.

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