Best Rewards Credit Cards To Keep (2018.10 Update)

Credit cards could bring you great rewards, often greater than you thought. Typically, there are two ways to earn rewards with credit cards: everyday purchases and sign-up bonus. Credit cards with high sign-up bonus (see Best Credit Card Sign-Up Bonus) are usually not the credit cards you should choose for everyday use, since they often come with annual fees but not so good reward rates. Instead, the credit cards you choose to keep for everyday use should be the ones with great reward rates on your spending categories, and can cover their annual by the rewards they bring.

1. Rotating Category 5% Cash Back

They offer 5% cash back on a category each quarter. The UR points earned by Freedom can be even more valuable than their cash value if you have CSP/CSR. They both have their unique rewards categories and, most importantly, come with no cost! These credit cards are really no-brainers for almost anyone.

2. Grocery

  • AmEx Gold ($250 annual fee, $30 effective annual fee)

You can earn 4x Membership Rewards (MR) points on grocery, up to $25,000 grocery spending in a calendar year. The annual fee is $250, but it also comes with $100 air credit and $120 dining credit, click the link above to see more details about these credits. If you can make use of these credits, then the effective annual fee is just $30. MR points are worth about 1.6 cents/point. See Maximize Points Value for an overview, and Introduction To AmEx Membership Rewards (MR) for detailed information. So 4x MR earning rate is about 6.4% in return.

Although the 4x MR earning rate on grocery makes AmEx Gold a clear winner here, some people may prefer no annual fee cards. Here are two choices:

No annual fee, 2x MR on grocery, 20% bonus if you use your card 20 times or more in a month (which makes the earning rate 2.4x MR). Note that ED is the only credit card with no annual fee that can transfer points into airline miles, so it is very highly recommended for those who are interested in points and miles.

No annual fee, 3% cash back on grocery.

3. Restaurant

  • AmEx Gold ($250 annual fee, $30 effective annual fee)

Yes, it’s the same card mentioned above. Apart from grocery, you can also earn 4x MR on dining!

You can earn 3x UR points on dining and travel, which is worth ~4.8%. See below for more short intro. Though AmEx Gold has a higher earning rate at restaurants, some restaurants do not accept AmEx cards. Therefore, CSR, a Visa card, is still useful from time to time.

If you prefer a no annual fee card, here’s an option:

No annual fee, 4% cash back at restaurants.

4. Other Categories

If you like to study points/miles and maximize their values, then by the help of CSP/CSR, the 1.5x Ultimate Rewards (UR) points on everything is worth about ~2.4% in return, it is better than the DC.

Earn 2% cash back on everything. There are another two no annual fee 2% cash back cards: Fidelity Rewards (Visa) and Alliant Visa Platinum Rewards. I prefer DC among the three, because: you can get another Citi credit card with huge sign-up bonus, then downgrade it to DC after a year, so that you can keep the credit history of the card and get DC without additional hard pull.

5. Credit Cards That Give You Free Nights (FN)

Although the annual fee is as high as $450, it gives you a $250 air credit and a $250 Hilton resort credit (room rate itself also counts). If you can make use of these credits, the effective annual fee is already negative! Plus, it gives you an annual weekend Hilton FN, with no category cap! Besides, it also gives you Hilton Diamond status, etc. Click the subtitle to see more details about this card.

There are a few other cards that you can earn an FN by paying the annual fee, but comparing to AmEx Hilton Aspire these cards are just so-so. So just choose the one or two from your favorite hotel chain:

You can get 1 worldwide Marriott FN with a redemption level up to 35,000 Marriott points. Worth $150+.

You can get 1 worldwide Hyatt FN with a redemption level of category 1~4 every year. Worth $150+.

You can get 1 worldwide IHG FN with a redemption level up to 40,000 IHG points. Worth $150+.

You can leave these cards at sock drawers, and only pay the annual fees for the free nights.

6. Excellent Cards That Can Boost Point Values

You can earn 2x Ultimate Rewards (UR) points on dining and travel with CSP, which is not impressive. The most important role of the CSP, however, is that it allows you to transfer Ultimate Rewards Points earned with both Chase Freedom Card and CSP to partner loyalty programs including UA and Hyatt, boosting the UR value from 1 cent/point to about 1.6 cents/point. See Maximize Points Value for an overview, and Introduction To Chase Ultimate Rewards (UR) for detailed information. When you have the CSP, your Chase Freedom will become about 8% in return on rotating categories, and your CFU will give you 2.4% in return on everything! In addition, you can get primary car rental insurance with this card. Most importantly, the Chase 5/24 rule (see here for detailed information) makes this card almost impossible to re-open if you apply for credit cards very often.

You can earn 3x UR points on dining and travel, and 1x UR points on other purchases. You can also transfer your UR points to partner loyalty programs and maximize the their value. Besides, you can use your UR points at a fixed ratio 1.5 cents/points towards flights and hotels with CSR, it is a very simple way to spend your UR points at a decent value. Free access to Priority Pass Select lounges. Primary car rental insurance. CSP and CSR have a lot in common, and you can choose one of them to keep.

7. Conclusion

Though there are a lot of cards that worth keeping, but actually you don’t carry a lot with you: you should bring your DC or CFU; one grocery card AmEx Gold; one restaurant card AmEx Gold or plus a CSR; you can bring Discover it of Chase Freedom when the 5% cash back category is useful; and you can throw all other cards into your sock drawer and enjoy the rewards they give you!

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