With the recent changes to the American Express Platinum Card and the changes to the Citi Prestige Card going into effect this July, it’s time to revisit our credit card spending optimization.
The credit card industry has become very competitive in the past several years, and now is a great time to re-evaluate what you have in your wallet. The sign-up bonuses on some cards alone can make the switch more than worthwhile. This decision-making process is personal and will vary from person to person. With that said, here’s an overview of the cards that are currently in our wallet:
Quick reference for spend by category:
- Hotel 4+ Nights: Citi Prestige
- Hotel <4 Nights: American Express Platinum or Chase Sapphire Reserve
- Airfare: American Express Platinum
- Rental Car: Chase Sapphire Reserve
- Other Travel: Chase Sapphire Reserve
- Dining: Chase Sapphire Reserve
- Groceries: American Express Blue Cash Preferred
- Gas: American Express Blue Cash Preferred
Quick reference for spend/benefits by card:
- Citi DoubleCash
- Our use: All purchases (including recurring bills) that don’t go on one of the other credit cards
- 2% cash back on all purchases
- No annual fee
- American Express Blue Cash Preferred
- Our use: Groceries (up to the $6k limit), gas, department stores
- 6% cash back on groceries (up to $6,000/year), 3% cash back on gas and at department stores
- $95 annual fee
- Citi Prestige
- Our use: Hotel stays of 4 nights or more
- $450 annual fee
- Chase Sapphire Reserve
- Our use: Dining, non-AMEX eligible hotel stays of fewer than 4 nights, miscellaneous travel expenses, rental car for primary rental insurance coverage
- $450 annual fee
- American Express Platinum
- Our use: Airfare, eligible hotel stays of fewer than 4 nights, Centurion lounge access, hotel elite statuses, dining reservations, Uber credits
- $450 annual fee (increasing to $550 next year)
- Chase Freedom
- Our use: Rotating categories
- 5% cash back on quarterly rotating categories (up to $1,500 per quarter)
- Transfer points to Chase Sapphire Reserve Ultimate Rewards account for 1.5x redemption bonus
- No annual fee
- Charles Schwab (Investor Checking) Debit Card
- Our use: Getting cash fee-free at home and abroad
- No annual fee
Citi DoubleCash: It’s a good idea to set up a basic, no-frills card to maximize earnings on miscellaneous expenditures that don’t fit into specific card categories, such as the electric bill or the dentist’s office. This is exactly how we use this card. It gives you 1% cash back when you make a purchase (statement closes) and then another 1% cash back when you pay your bill, for a total of 2% cash back. The great part about this card is that it has no annual fee. We also like (and use) the Citi Price Rewind feature that searches for a better price for an item you purchased for a period of 60 days. Recently, a small TV we bought dropped in price by $70, and a $70 statement credit showed up on our account.
American Express Blue Cash Preferred: The Blue Cash Preferred has an incredible 6% cash back on groceries (on up to $6,000 a year) and 3% cash back on gas and department stores (unlimited). If you spend $500/month, on average, on groceries – or close to it – then this card must be added to your wallet because no other card will give you a 6% return on groceries. Doing some quick math, 6% back on the maximum $6,000 per year spend on groceries alone is $360 cash back. Add in whatever you spend in gas and at department stores in a year – say, $3,000 – and you’re up to $450 cash back. This card has an annual fee of $95, which cuts into the return (netting an annual return of $355 in the above spend scenario), but we still think it’s a great value. For the sake of comparison, if you put all the expenditures above ($9,000) on the Citi DoubleCash card instead, you would earn only $180.
Citi Prestige: We’ve had this card almost two years, and due to its incredibly lucrative 4th Night Free benefit, it’s our most valuable card. We have used this card for its 3x points on hotel and airfare, 2x points on dining, American Airlines Admiral’s Club access, $250 annual travel credit, and, as noted above, its unlimited 4th Night Free hotel stays at virtually any hotel worldwide. When redeemed for American Airlines flights, points were worth 60% more (1.6x), thereby increasing the 3x earnings rate for flights and hotels to a very high 4.8x and 2x earnings rate for dining to 3.2x.
However, the benefits of the Citi Prestige Card are changing effective July 23, 2017, as follows:
- No more American Airlines Admiral’s Club access
- Redemption bonus for all airfare reduced to 1.25x (from 1.6x)
- 4th Night Free now calculated based on average nightly rate excluding taxes (versus the previous calculation of the actual 4th night plus taxes)
The loss of Admiral’s Club access is disappointing, but since the American Express Platinum Card gives us access to Centurion Lounges and Priority Pass lounges, it’s not a deal-breaker. The reduction in the redemption bonus, though, means we will be shifting our spending on eligible hotel stays of less than 4 nights and airfare to the American Express Platinum card due to its new 5x earnings rate. Non-AMEX eligible hotel stays of less than 4 nights will now be booked on the Chase Sapphire Reserve card. So, what is the Prestige card good for any more? Simple: 4th Night Free bookings. Any hotel stay of four nights or more will be booked with this card.
Chase Sapphire Reserve: This is probably our favorite card. The Reserve offers 3x points on travel and dining and a $300 yearly travel credit. And, how Chase categorizes “travel” is very broad. For instance, train tickets to Machu Picchu, our monthly toll tag bill, and Uber rides all count as travel. The Reserve’s redemption bonus is 1.5x (higher than the Prestige card as of July 23, 2017), and applies to any travel redemption – not just airfare. As noted above, once July 23rd hits, we’ll be putting non-AMEX eligible hotel stays of less than 4 nights as well as all miscellaneous travel expenses on the Reserve. We also put all dining spend on this card. The Reserve does have a $450 yearly fee, but that is essentially offset to only $150 by the $300 travel credit.
American Express Platinum: In our previous post, we talked about how the Platinum card was not an earnings card – that it was a benefits card. Well, that has all changed due to increased competition.
Recently, American Express changed the earnings and benefits for the Platinum Card:
- 5x points on airfare purchased directly with airlines or on AMEX’s site
- 5x points on “eligible” hotels booked on AMEX’s site
- $200 Uber credit and Uber VIP status
- Increased yearly fee to $550 (from $450)
The increased earnings on airfare and eligible hotels make the Platinum card theoretically better than both the Prestige (4.8x with old 1.6x redemption bonus) and Reserve (4.5x with 1.5x redemption bonus) for airfare and hotel purchases. So, we’ll have to consider this when booking flights and hotels.
As you may have read, the $200 Uber credit is a bit of a nightmare, as it’s given in $15 monthly credits to your Uber account throughout the year (with an extra $20 credit in December). This sounds fine, but the catch is that the credits expire at the end of the month! For people who use Uber at least once or twice a month, this is great benefit that they’ll easily maximize. If you’re not one of those people, you can try to use the credit on UberEats (we can confirm this works), or simply let it lapse.
In addition to the above benefits, the Platinum card gets you Centurion lounge access, American Express Concierge (which is great at securing reservations at top-rated U.S. restaurants), Hilton Gold Status, SPG Gold Status (which now gets you Marriott Gold Status), Fine Hotels & Resorts (with some properties having 3rd or 4th night free), and $200 yearly airline credit, among other benefits.
Chase Freedom: We have this card for two reasons: It has no annual fee, and the points earned can be transferred to the Ultimate Rewards program for the Reserve card and redeemed at the Reserve’s 1.5x redemption bonus.The Freedom earns 5x points on categories that rotate quarterly, up to $1,500 maximum spend per quarter (then 1x thereafter). So, some quick math: If you max out the $1,500 quarterly spend at 5x, this will net you $75 worth of points, which you can then transfer to the Reserve card and redeem at 1.5x, being worth $112.50. Over a year, this no-fee card could net you a cool $450. Even if you don’t have the Reserve card to boost the redemption, the Freedom card could be useful due to its no annual fee.
Charles Schwab Investor Checking Debit Card: While we try to put as much as possible on a credit card, sometimes you simply need cash. This is especially true when traveling abroad, where many countries and towns are still very cash-oriented. The Charles Schwab Investor Checking account is free, has no minimum balance requirement, and has unlimited, worldwide ATM fee reimbursements. Any ATM fees, whether incurred domestically or internationally, are automatically reimbursed within a few days. This feature has changed the way we get cash abroad for the better. When traveling abroad with our previous debit card, we would try to get as much cash at a time as possible so as to avoid paying another ATM fee, which made us uncomfortable to carry around a bunch of money. Now, we can get what we need – or what we think we’ll need for a few days – without worrying about incurring another ATM fee the next time we need cash. If you travel abroad frequently, we’d strongly suggest you look at this account and debit card option.
Two Final Comments: As you can see, changes and devaluations are inevitable, so it pays to stay up-to-date on the current credit card offerings and not anchor yourself to a card that is no longer getting you the most benefits. Additionally, your spending habits may change, so it’s important to reevaluate on a regular basis whether your credit cards are still a good fit for your spending habits, the benefits you want, and your goals.
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