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What’s the “Best Card” Out There? Link to this heading

This is a big question, and it can be daunting! I’ll try to make things approachable.

Some Questions For You Link to this heading

Before we get started, I’d like to ask you a few questions:

  1. Do you want to have a single purpose card or are you okay having a few cards to work with?

    • e.g. one card for shopping, one card for groceries, one card for restaurants
  2. What do you spend the most money on per month?

    • e.g. groceries, restaurants, travel, shopping at a specific store, shopping across multiple stores, gas
  3. What are you hoping to get in terms of rewards?

    • e.g. miles, cash back, experiences, VIP status at hotels/lounges/airlines
  4. What’s your credit score like?

    • Some credit cards are pretty exclusive, for better or for worse
    • Most of the cards I’m going to discuss here require pretty good credit scores, but these questions and the process are applicable regardless!

Narrowing Down the Choices Link to this heading

With those answers, we have some direction. I’m not going to list out every card ever (there are plenty of sites for that), but rather go over my thought process and hope that you, the reader, find some inspiration based on the above questions and my thought processes.

For my answers to the above questions:

  1. I am okay having a few cards that I actively use (three, maybe four tops)
  2. I spend the most money on groceries, restaurants, and shopping across multiple stores, with occasional big purchases for traveling
  3. I’m most interested in cashback
  4. My credit score is pretty solid

With those answers, I decided to maximize my cashback on groceries, restaurants, and generic spending, with a travel card that doesn’t require a lot of travel to be worth it.

I did some digging into the best cards on market for each of those categories, which is a lot easier than trying to find “the best credit card” – that’s a highly subjective term as people differ on their answers to those questions above.

My Setup Link to this heading

My Main Cards Link to this heading

  • Generic Spending: Alliant Visa Signature

    • 2.5% cashback across the board if you meet the easy-to-meet requirements (checking account with direct deposit)
  • Groceries: American Express Blue Cash Preferred

    • 6% cashback (super high!) on groceries and streaming services
  • Restaurants: Citi Custom Cash

    • 5% cashback on your top spending category up to $500 per month, but this one doesn’t have to be restaurants
  • Travel: CapitalOne Venture X

    • Okay, let me stop for a second: this card is amazing. If you’re going to have a single card, this is the one I’d opt for. See below for details.

Notes Link to this heading

I have a few other cards on top of these, but they’re more specific in use and I won’t get into them in much detail outside of these two:

  • Target RedCard, because 5% cashback, 4 month return policy, free 2 day shipping, and better overall than Amazon? Easy choice for me!
  • Chase Freedom (Flex), because 5% rotating categories can be handy in specific circumstances and it’s also my oldest credit card, so closing it would impact my credit score a good amount

Also, I know a lot of people swear by the Chase Sapphire Reserve or the Citi Premier or the American Express Platinum cards, but I found all of their annual fees and benefits worse than my current setup

  • e.g. the American Express Platinum offers a lot of perks, but many of them are totally irrelevant to my interests, like the Equinox discount. These cards can be great if you can maximize all the benefits, but that feels like too much work to me, to be honest. I like one or two conditions at most. Any more than that and it becomes work, not fun, to maximize benefits here.

If I Had to Pick Just One… Link to this heading

I’d like to call attention to one card in particular: the CapitalOne Venture X is phenomenal. With that said, I’m sure the below wall of text can seem overwhelming if you’re not used to the language. To summarize, this card is fantastic if you take even a single trip somewhere once a year to use the $300 travel credit.

Let me lay out its benefits…

  • 10x miles (effectively 10% cashback when used properly) on hotel bookings
  • 10x miles (10% cashback) on rental cars
  • 5x miles (5% cashback) on flights
    • Note: for the above 5-10x miles offerings, you need to book travel through CapitalOne’s Travel Portal, but it’s pretty well designed and offers fair pricing
  • 2x miles (2% cashback) on all other spending
    • This makes this card effectively a 2% cashback card in the worst case, which is still pretty great!
  • Access to Priority Pass Lounges, Plaza Premium Lounges, and CapitalOne Lounges across the world
    • I used to think this sort of benefit was useless, because when Priority Pass first launched, I tried using it and was told several times that the lounges were full. I tried again (4 years later) now that the hype has died down a bit, and it was a wonderful experience. Free food, free drinks, less noise, more comfortable chairs, charging outlets, and more – it makes long layovers easier.
  • No foreign transaction fees, meaning you don’t pay extra when using this card abroad!
  • $100 TSA Precheck/Global Entry credit (redeemable every 4 years, and those programs need renewal every 5 years)
  • $200 AirBnB credit your first year
  • Sign-on bonus of 75,000 miles if you spend $4,000 in the first 3 months (effectively $750 cashback for spending $4,000)

A few other perks I don’t care as much about:

  • Hertz’s President Circle status
  • 10x miles when booking with Turo
  • CapitalOne Dining and Entertainment experiences
  • Cell phone protection
  • Free additional cardholders

And in all fairness, here are its detriments:

  • $395 annual fee, but before you dismiss this card, they counter that fee with:
    • $300 travel credit applied when booking through CapitalOne’s Travel Portal
    • 10,000 bonus miles on your card’s anniversary (equivalent to getting $100 back every year)
    • Note that with just the above two points, we’ve already paid off the annual fee and got $5 back, without even using a single one of the card’s main benefits around hotel, rental car, or flight bookings

Best Practices Link to this heading

I think people are easily scared by credit cards, especially since they have so much potential to cause damage if you don’t use them right, but I think a few simple rules prevent major issues:

  • Never spend money you don’t have

    • If you can’t pay off the credit card right then and there (or very, very soon), you can’t afford it. A credit card is effectively just taking a loan out against your future self, and if you pay it off quickly, it’s a 0% interest loan!
    • A lot of credit card debt is accumulated by treating it as a longer term loan from your future self, where the interest rate increases (i.e. APR) and you’re now paying money for things beyond what you bought
  • Always pay on time

    • If you miss a payment on a credit card, it can be a huge hassle trying to undo the mess it causes for your credit report
    • Setting up autopay (at least for the minimum balance due) and making sure your bank account can fund that payment saves a lot of heartache here
  • Keep your oldest account open

    • Two big factors in a credit score are average age of credit and oldest credit line. By keeping your oldest account(s) open, you’re making sure those factors are treated well in your score.
    • One exception here is if your oldest account charges fees (annual or service or otherwise). My advice here, though it might be too late, would be for your oldest account to be one as low maintenance/cost as can be. FYI, many bank accounts require direct deposit or a certain minimum balance to avoid a fee.
  • Keep your credit locked unless you’re applying

    • Identity theft is a serious issue these days. It’s all too easy for an estranged family member, angry ex, or hacker to add endless unnecessary stress to your life by opening a few credit cards and maxing out spending.
      • By keeping your credit locked/frozen and only unlocking/thawing it when you’re applying for something, you make sure you’re in control and aren’t getting surprised when you try to buy a car/home.
    • Note: I really dislike how social security numbers and credit scores are linked.
      • The fact that a social security number is both username and password, where knowledge of someone’s number can give you untold power over their life, is ridiculous. It’s counter to so many best practices of modern security, but we’re somehow okay with this archaic and broken system.
      • It’s made even worse by the fact that this information is collected without our consent and is so pivotal in major life purchases in the United States.

Advanced Reading Link to this heading

Sign on Bonuses Link to this heading

Please note, this section might stress you out if organizing information isn’t your forté or if you’re not familiar with managing multiple cards.

Signon bonuses are one time benefits you can get with credit cards where if you spend a certain amount in a certain time period, you get a certain amount of points/cashback/statement credit. Things like this include:

  • Spend $3,000 in 6 months to get $500 back
  • Spend $4,000 in 3 months to get 100,000 UltimateReward points

These can be really useful if you have a big purchase coming up! For example, my cat had a major procedure done last year, and I was able to snag $500 by getting a new card that had a signon bonus instead of just paying for it with a normal setup. You can then either cancel the card if you want to keep your average credit age up or keep it if you want to have more active accounts – both are factors in your credit score.

Churning Link to this heading

“Churning” is a term for maximizing what credit cards can do for you beyond what I described above. With everything I’ve described so far, it’s been finding a setup that works for you in the longterm that you stick with.

Churning is more about pumping and dumping credit cards to maximize manufactured spending, signon bonuses, and other benefits to keep the best of the best of benefits. It’s a lot of work to manage effectively, but if you do it perfectly, it can basically be a second job in the revenue it can generate.

Message me if you want more info, but I also am not really into the churning scene and will just send you additional resources not worth listing here.

More Details Link to this heading

Feel free to check out this post if you want more detail on anything I described!