The credit card industry has turned into something of an arms race, with various banks lining up to outdo one another with perks and rewards that will attract the most customers. All of this competition is great news for you as a consumer, as you get to benefit from the increasing level of features and benefits.
What’s the Best Strategy With Rewards Cards
Just like one man’s treasure is another man’s junk, so too it is with rewards cards. You have to pick an offering that best suits your needs and spending patterns. There are so many competitive offerings now that it’s an easy task to find a card that offers maximum rewards based on spending patterns you already have. And that’s the key – you should never tailor your needs to what a credit card offers. Rather, the opposite is true – you should keep your same spending patterns and find a card that slots nicely into what you’re already doing.
What’s With All These Point Valuations?
Numerous pundits try to evaluate the relative value of rewards credit cards by assigning a monetary value to the points or miles that they issue. But to some degree, this is a fool’s errand. What really matters is what rewards have value to your life, not what some arbitrary commentator suggests is a high-value card.
For example, some analysts might consider a credit card that gives you unlimited airport club access to be the most valuable type of card you can have, simply because the cost of an annual membership in some of these clubs tops $600 or more. But if you rarely fly, that card is almost useless to you, even if it mathematically works out to be “a good deal.” Remember, the most important thing to factor into your comparison of rewards credit cards is what they do for you, not what their supposed “intrinsic value” is.
What Should You Look for in a Valuable Credit Card?
When searching for a good rewards card, there are some basic perks that you should expect that have become somewhat standard in the industry, such as some type of lost luggage or travel delay reimbursement and $0 liability for unauthorized charges. But the best rewards cards – and the ones that should really be in your sights – should offer some or all of the following as well:
For some card holders, a huge sign-up bonus is the beginning and the ending of their search. Whereas 10,000- and 20,000-point bonuses used to be the norm, many cards now offer 50,000, 100,000 or even more points once you meet the qualifying spend level. If you’re gaming the system, you can snag a big sign-up bonus and then cancel your card after a year, perhaps even before your card charges you an annual fee. But if you’re a long-term holder, getting a big bonus right off the bat can provide you with an immediate return on your card investment.
Although a big sign-up bonus is a great way to start a relationship with a new card, to keep it in your wallet for the long run, you’ll need some ongoing benefits. The most prominent of these should usually be the rewards multipliers on spending categories that you use frequently.
For example, if you spend most of your time close to home rather than traveling the world, you might want a card that pays you 4x points on gasoline and 3x points on groceries, for example. If you’re more of a world traveler, you might prefer earning your 3x points on things like travel and hotel stays.
Whichever type of lifestyle you lead, look for a card that offers big multipliers on popular spending categories.
In addition to points or miles earned by staying at your favorite hotel or flying on your preferred airline, you’ll want a card with additional benefits for that type of spending. For example, in addition to earning 3x points on hotels, look for a card that gives you elite status within that hotel chain. If you’re a frequent flier, choose a card that gives you perks like free baggage or priority boarding.
One good perk to have in a rewards card is flexibility when it comes to transferring your points. Although it’s great to rack up miles on your favorite airline, what happens when you need to fly on a different carrier?
Some cards allow you to transfer points to various airline or hotel programs, and this flexibility can be invaluable when it comes to actually using your rewards. What happens if your favorite airline suddenly decides to stop serving your favorite cities, for example? A card that allows you to transfer points to various third parties can make that a smooth transition.
In decades past, no one would have dreamed of paying a fee just to use a credit card, but when it comes to the rewards world, most cards do charge fees. And in all honesty, they probably should, because the value of the perks they provide can be quite high.While some cards do have no annual fee, they typically have limited perks.
The key here is to find a card that offers maximum perks for the smallest possible fee. In some cases, this could mean paying a fee of hundreds of dollars per year, because you receive so much more in exchange. But if you’re just looking for a standard rewards card with a high sign-up bonus and a moderate level of benefits, try to get a card with an annual fee of $95 or lower.
Foreign transaction fees used to be commonplace, but more and more issuers are dropping them. This only makes sense, because so many cards are geared towards travel rewards that issuers should expect them to be used overseas. But if you have to pay a 3% foreign transaction fee anytime you use a card abroad, the value of the perks you receive is rapidly negated. Enough good cards are available without foreign transaction fees that you really don’t need to look at those that do.
Perks and benefits are great, but what if something goes wrong and you need help, especially if you’re away on a trip? Cards that offer good customer service are invaluable in this regard. Like insurance, which you hope you never need but are grateful that it’s in place when you really need it, good customer service is something you should prioritize in a card. Some card issuers offer dedicated, 24-hour hotlines that guarantee you’ll speak with a live person, and this is an important benefit that you should seek out when doing your research.
So, What’s the Best Card for Me?
With all of this in mind, here is a rundown of four of the most interesting credit cards currently available on the market. They offer a wide variety of features and benefits, charge wildly different annual fees, and serve different target markets, even though they can all be considered rewards cards. Read on to see which of these gems might be the best fit for your personal needs and spending patterns.
The Platinum Card From American Express
When it comes to travel rewards cards, American Express has always had attractive offerings. As one of the pioneers of the card industry, American Express has always focused on serving the needs of travelers. In recent decades, that service has expanded into a wide range of rewards credit cards, and The Platinum Card From American Express has always been at the top of that pyramid. Although many competitors have come and gone, The Platinum Card From American Express still boasts some of the best rewards in the business.
Let’s get one thing out of the way right away: yes, the card has a steep $695 annual fee. This alone doesn’t make it the right card for everyone. But when you factor in the value you receive for that fee, many card holders get the best of that deal. Here are the most noteworthy perks of the card:
- 100,000 Membership Rewards Points
- Over $1,500 per year in statement credits on select purchases
- 5x points on flights and prepaid hotels
- $200 hotel credit annually on select prepaid hotels
- $200 annual airline fee credit for incidentals
- $155 Walmart+ credit
- $240 annual digital entertainment credit
- $200 Uber Cash
- $300 Equinox credit
- $300 SoulCycle at-home bike credit
- Access to American Express Global Lounges
- $179 CLEAR credit
- $100 Saks credit
- Up to $800 in cell phone protection
- Premium car rental program status
That’s quite a hefty list of valuable perks, and it doesn’t even include some of the other important benefits of the card, such as payment flexibility and access to elite partners like Fine Hotels & Resorts and Global Dining Access by Resy.
The bottom line is that the huge-sign up bonus alone is likely to make this card worthwhile for travelers, and the long list of additional perks, while not for everyone, only add to that value. If you’re looking for a high-end, prestigious rewards card that provides a huge amount of value, even above and beyond its hefty annual fee, you might not need to look further than The Platinum Card From American Express.
Chase Sapphire Reserve
The Chase Sapphire Reserve card is a relative newcomer to the rewards card field, having debuted just in August 2016. But it rapidly gained a loyal following thanks to its giant sign-up bonus and host of benefits. The sign-up reward has dwindled some since the card’s splashy debut, but it still offers a generous 50,000 Ultimate Rewards points after spending $4,000 in the first three months of card membership. But beyond this solid sign-up bonus, the real strengths of the card are in its additional features and benefits, including the following:
- $300 annual travel credit
- 5x points on flights booked through the Ultimate Rewards portal
- 10x points on hotels and car rentals booked via Ultimate Rewards
- 10x points on Chase Dining when ordered online through Ultimate Rewards
- 3x points on non-Ultimate Rewards travel
- 3x points on non-Ultimate Rewards dining
- 50% more value on your points when booked through Ultimate Rewards
- $100 Global Entry, Nexus or PreCheck fee credit
- 1:1 points transfer to numerous airline and hotel loyalty programs
- Access to 1,300+ airport lounges worldwide through free membership in Priority Pass Select
- Car rental privileges from National, Avis and Silvercar
- Special benefits via the Luxury Hotel & Resort Collection
- No foreign transaction fees
- Numerous travel and purchase protections
- 10x points on Peloton equipment
- 24/7 direct access to a customer service specialist
The Chase Sapphire Reserve is clearly geared towards travel and dining, with huge points multipliers across these categories. One of the card’s main strengths, however, is in the transferability of its points to 11 airline and 3 hotel partners, including United, Singapore, JetBlue, Emirates, Southwest, Hyatt, IHG and Marriott.
The bottom line is that the Chase Sapphire Reserve has rightly been anointed as one of the premier travel and rewards cards in the industry. The only drawback is its hefty annual fee, but at $550, it’s still a considerable notch lower than the $695 charged by the Platinum Card From American Express. Also, more than half of that annual fee is effectively wiped out from the start for most cardholders thanks to the generous $300 annual travel credit.
Chase Ink Business Preferred Card
If you own a business and are looking to maximize not just the points earned on your spending but also your sign-up bonus, look no further than the Chase Ink Business Preferred Card. For starters, the card offers one of the highest sign-up bonuses of any card currently available, at a whopping 100,000 points. Additionally, the card’s bonus categories are perfectly tailored for businesses that also have lots of travel expenses, especially considering that the card has no foreign transaction fees.
Unlike some other cards, the rewards categories on the Chase Ink Business Preferred Card are relatively straightforward, which can actually be a plus when it comes to determining what the actual value of the card can be. On most purchases, you’ll earn a simple 1x points, but in these bonus categories, that payout kicks up to 3x:
- Shipping purchases
- Advertising purchases with social media sites and search engines
- Internet, cable and phone services
- Travel
One drawback is that your extra points only apply to up to $150,000 in cumulative purchases per year, which may be a factor for some larger businesses. Purchases above this amount still earn one point per dollar spent. Another drawback is that you must spend a significant $15,000 in the first three months after account opening to earn the huge sign-up bonus.
As with other Chase Ultimate Rewards cards, you can redeem your points for a wide variety of options on the Ultimate Rewards portal, from gift cards and travel to cash back. Rewards points get a 25% boost in value when redeemed through the portal as well, and points never expire as long as your account remains open and in good standing.
Considering you can get all of this value for a comparatively low $95 annual fee, the Chase Ink Business Preferred Card can be a great choice for businesses that can meet the minimum spend threshold.
About the Author
Kate Samano
Kate Samano is a copywriter and Head of Content at Lendzi. She believes in helping small businesses grow by providing access to viable financial advice.