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People always ask me what credit card they should be using to get the most bang for their buck. There are lots of great credit card, but there is no best credit card, so the trick is to optimize your spending to earn the most possible rewards.
To figure that you need to calculate the value of a mile, another challenging topic.
You can value a mile by what they sell for on the grey market, but that’s not really fair because those miles are being resold by a broker to someone else at a higher valuation. So there’s 1 grey market value for what a broker will pay (and even that will depend on the broker, the amount being sold, and constantly changing market conditions) and there’s another grey market value if you actually know end users as the brokers do.
I know of folks who fly first class internationally just to make contacts with people who actually pay $30,000 to be in the pointy section of the plane. On a flight back home from Hong Kong in Cathay First another passenger offered to take us on his yacht. He paid the full fare and doesn’t have the time to figure out the mileage game. However I’m sure he’d be happy to save $10K on his $30K tickets, and that would have an astronomical value per mile. Of course the airlines frown on all this and some airlines aggressively shut accounts down for selling their miles.
A better way of valuing miles is according to what you use them for as that’s how they’re intended to be used, though again, the problem with that is the sky is the limit. A last-minute British Airways award for a flight that costs $1,200 is just 9,000 Avios, a value of over 13 cents per mile. You can fly in a private walled-in Singapore suite to Europe for 57,000 miles one-way. In business or first class you miles can easily be worth more than 20 cents each. I’ve had redemptions where my miles were worth over 50 cents each. Combine with that a card that earn over 2 miles per dollar and it means that everything you buy is free 😉 OK, that’s an ridiculously extreme way to look at things, but it shows how difficult this exercise is.
And then you have Pa Kettle who redeems 50,000 miles for a $200 domestic ticket where their miles will only be worth less than half a cent each.
Determine the value:
I don’t care for posts that claim to put a value on the various currencies without any disclaimers. Their value ultimately depends on what YOU will do with the points.
If you’re selling your miles to a broker, realize they need to turn a profit as the middleman, and that means you’ll probably lose between 0.1-0.4 cents off of these valuations depending on the broker and the amount you’re selling. You’ll never do as well selling to a broker as you will selling directly to someone actually flying somewhere last minute coach or in business or first class or by just using the miles yourself.
Having miles locked into a program is worth less than having points in a flexible currency. Flexible currencies allow you to wait and see what is available for when you want to travel. And they are a hedge against devaluations. Therefore they are worth more than any individual program.
Instead of giving a value to each currency, I’ll just share the minimum value I aim for when I use my points. Often I get several times that value, but let’s call their value the minimum level at which if I can’t attain that value I won’t burn the points. Feel free to plugin your own numbers as this is a highly personal exercise.
-Starwood Starpoints: 2.1 cents (Use for hotels or get a 25% points bonus when you transfer increments of 20K into 25K miles with dozens of airlines like ANA, Air Canada, Alaska, American, British Airways, Delta, Flying Blue, Singapore, and USAirways. Caveat: Transfers aren’t instant.)
-Chase Ultimate Rewards points: 1.75 cents (Transfer to hotels like Hyatt or airlines like British Airways, Singapore, Southwest, and United)
-American Express Membership Rewards points: 1.65 cents (Transfer to airlines like ANA, Air Canada, British Airways, Delta, El Al, Flying Blue, and Singapore. Caveat: No good hotel options and transfers to domestic program incur fees.)
–United miles: 1.7 cents
–American/USAirways miles: 1.7 cents
–British Airways Avios: 1.5 cents
–Delta miles: 1.4 cents
-Barclaycard Arrival Plus™ World Elite MasterCard® gives 2.11% miles back.
–Fidelity gives 2% cash back
–Blue Cash gives 1-3% cash back
–Blue Cash Preferred gives 1-6% cash back
Of course you can currently transfer 1 AMEX MR point into 1.4 British Airways Avios, so that would give AMEX points an imputed value of 2.1 cents. However that promotion ends 01/31, so while the points may be temporarily worth more, I wouldn’t call that their long-term value.
To repeat: Value is highly subjective. Determine how you value each currency, use the formulas I’ve laid out at the bottom of this post, and figure out if that will change where you should be using each card.
Let’s take a look at what you can earn for spending on 19 different cards:
Cards with transferable point currencies:
–Chase Chase Sapphire Preferred® Card® Card Visa Signature
Annual fee: Free then $95. Forex fee: None. Signup bonus: 40K for spending $4K plus 5K for adding an additional user. Highlights: Signup bonus, double points for dining and travel.
–Chase Ink Plus Business Card
Annual fee: Free then $95. Forex fee: None. Signup bonus: 50K for spending $5K. Highlights: Signup bonus, double points for gas and hotels, quintuple points for office supplies and telecom, annual lounge passes.
–Ink Business Cash® Credit Card Business Card
Annual fee: None. Forex fee: 3%. Signup bonus: 20K for spending $3K. Highlights: Double points for gas and dining, quintuple points for office supplies and telecom, annual lounge passes.
–Chase Freedom Visa
Annual fee: None. Forex fee: 3%. Signup bonus: 10K for spending $500. Highlights: Quintuple point rotating categories, 10% checking bonus (ending 12/31/15)
–Starwood Preferred Guest® Credit Card from American Express
Annual fee: Free then $95. Forex fee: None. Signup bonus: 25K for spending $5K. Highlight: 25% bonus for converting points into miles.
–The Amex EveryDay Credit Card from American Express
Annual fee: None. Forex fee: 2.7%. Signup bonus: 10K for spending $1K. Highlights: The only free card that allows that allows direct mileage transfers, 1.2-2.4 points per dollar everywhere.
–The Amex EveryDay Preferred Credit Card from American Express
Annual fee: $95. Forex fee: 2.7%. Signup bonus: 15K for spending $1K. Highlights: 1.5-4.5 points per dollar everywhere.
–American Express® Premier Rewards Gold Card
Annual fee: Free then $195. Forex fee: None. Signup bonus: 25K for spending $2K. Highlights: Double points on gas and groceries, triple points on airfare.
–Platinum Card® from American Express
Annual fee: $450. Forex fee: None. Signup bonus: 40K for spending $3K. Highlights: Signup bonus, Centurion lounge access, Airspace lounge access, Delta lounge access, Priority Club worldwide lounge access, $200 annual airline fee refund, Starwood Gold Elite status, Global Entry/TSA Pre-Check enrollment fee refund.
Airline cards:
–Chase British Airways Visa Signature
Annual fee: $95. This fee is waived for the first year for a limited time only. Forex fee: None. Signup bonus: 50K for spending $2K. Highlights: Signup bonus, 1.25 miles per dollar spent, 10% off BA flights, worldwide companion certificate on award tickets if you spend $30K/year.
–Chase United MileagePlus Explorer
Annual fee: Free then $95. Forex fee: None. Signup bonus: 30K for spending $1K plus 5K for adding an additional user. Highlights: Signup bonus, free checked bag, expanded saver and standard award availability, never-expiring miles, priority boarding, 2 annual club passes, elite upgrades on award tickets.
–Chase United MileagePlus Club (Click on Club card on the right of the page)
Annual fee: $395. Forex fee: None. Signup bonus: $100. Highlights: United Club membership including security passes when not flying, 2 free checked bags, waived award last minute booking fees, premier baggage handling, security, and boarding, expanded saver and standard award availability, never-expiring miles, elite upgrades on award tickets.
–Gold Delta SkyMiles® Credit Card from American Express
Annual fee: Free then $95. Forex fee: None. Signup bonus: 30K for spending $1K plus $50 back for making a Delta purchase. Highlights: Signup bonus, free checked bag, priority boarding.
–Citi AA Mastercard
Annual fee: Free then $95. Forex fee: 3%. Signup bonus: 50K for spending $3K. Highlights: Signup bonus, priority boarding, free checked bag, 10% up to 10K award rebate.
–The US Airways® Premier World MasterCard®
Annual fee: $89. Forex fee: 3%. Signup bonus: 50K for spending $1. Highlights: Signup bonus, priority boarding, free checked bag, 5K mileage discount on USAir flights
Other cards:
–Barclaycard Arrival Plus™ World Elite MasterCard®
Annual fee: Free then $89. Forex fee: None. Signup bonus: $400 for spending $3K. Highlights: Signup bonus, 2.11% miles back everywhere.
–Fidelity American Express
Annual fee: None. Forex fee: 1%. Signup bonus: None. Highlight: 2% cash back everywhere.
–Blue Cash Everyday® Card from American Express
Annual fee: None. Forex fee: 2.7%. Signup bonus: $50 for spending $1K plus a year of Amazon Prime ($99 value). . Highlight: Up to 3% cash back.
–Blue Cash Preferred® Card from American Express
Annual fee: $75. Forex fee: 2.7%. Signup bonus: $100 for spending $1K plus a year of Amazon Prime ($99 value). . Highlight: Up to 6% cash back.
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Now that we have a value set for each currency we can translate that into the rewards percentage you’ll get for various types of purchases. Below are the numbers for regular purchases as well as several common categories where you earn more than everyday purchases.
Everyday purchase (Click here to see how many points are earned and how these calculations are made):
-Ink (general spending made via $200 gift cards bought from Staples at a cost of $6.95): 5.58%
-United Club: 2.55%
-AMEX EveryDay Preferred (if you make 30 transactions per month): 2.48%
-United Explorer (assuming you spend exactly $25K per year): 2.38%
-Barclaycard Arrival Plus: 2.11%
-Starwood: 2.1%
-Fidelity: 2%
-AMEX EveryDay (if you make 20 transactions per month): 1.98%
-Chase Freedom with Chase checking: 1.93%
-British Airways: 1.88%
-Chase Sapphire Preferred® Card with 7% dividend: 1.87%
-Ink: 1.75%
-Freedom without checking: 1.75%
-Chase Sapphire Preferred® Card without 7% dividend: 1.75%
-United Explorer (under $25K spend per year): 1.7%
-American/USAirways: 1.7%
-Premier Rewards Gold: 1.65%
-AMEX Platinum: 1.65%
-Delta: 1.4%
-Blue Cash/Blue Cash Preferred: 1%
Amazon.com Purchase:
-Chase Freedom with Chase checking during promo quarter: 9.63%
-Ink (via Amazon gift card bought from an office supply store): 8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
-See everyday purchases for standard percentage back on other cards.
Airfare:
-Ink (For Southwest flights via Southwest gift cards bought from an office supply store): 8.75%
-Premier Rewards Gold : 4.95%
-United Explorer on United flights (assuming you can spend exactly $25K in a year): 4.08%
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
Note: Chase Sapphire Preferred® Card also offers valuable insurances on airfare.
-British Airways on British Airways flights: 3.75%
Note: The British Airways card also gets a 10% discount on BA flights.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5% (This card also offers valuable insurances on airfare)
Note: Chase Sapphire Preferred® Card also offers valuable insurances on airfare.
-United Club on United flights: 3.4%
Note: You must use the United card to get free baggage.
-United Explorer on United flights (under $25K spend/year): 3.4%
Note: You must use the United card to get free domestic baggage.
-American on American flights: 3.4%
-USAirways on USAirways flights: 3.4%
-Delta on Delta flights: 2.8%
-See everyday purchases for standard percentage back on other cards.
Car Rental:
Sapphire Prefered and United cards have primary insurance coverage worldwide:
-Ink Plus at Alamo or National: 5.75%
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
-United Club: 2.55%
-United Explorer (assuming you can spend exactly $25K in a year): 2.38%
-United Explorer (under $25K spend/year): 1.7%
-See everyday purchases for standard percentage back on other cards.
Hotel:
-Ink Plus at any Wyndham hotel brand: 8.5%
-Starwood at a Starwood hotel: 4.2%
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
-Ink Plus: 3.5%
-See everyday purchases for standard percentage back on other cards.
Restaurant:
-Chase Freedom with Chase checking during promo quarter: 9.63%
-Ink (For restaurant gift cards bought from an office supply store): 8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
-Chase Sapphire Preferred® Card on the first Friday of the month with 7% dividend: 5.62%
-Chase Sapphire Preferred® Card on the first Friday of the month without 7% dividend: 5.25%
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
-Ink Cash: 3.5%
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
-See everyday purchases for standard percentage back on other cards.
Gas:
-Chase Freedom with Chase checking during promo quarter: 9.63%
-Ink (via gas gift card bought from an office supply store): 8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
-AMEX EveryDay Preferred (if you make 30 transactions per month): 4.95%
-Ink at Chevron or Texaco: 4.5%
-Ink: 3.5%
-Premier Rewards Gold: 3.3%
-Blue Cash Preferred: 3%
-See everyday purchases for standard percentage back on other cards.
Groceries (Including gift cards):
-Chase Freedom with Chase checking during promo quarter: 9.63%
-Ink (via grocery gift card bought from an office supply store): 8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
-AMEX EveryDay Preferred (if you make 30 transactions per month): 7.43%
-Blue Cash Preferred: 6%
-AMEX EveryDay (if you make 20 transactions per month): 3.96%
-Premier Rewards Gold: 3.3%
-See everyday purchases for standard percentage back on other cards.
Office Supply purchases (including gift cards to other stores)
-Ink: 8.75%
-See everyday purchases for standard percentage back on other cards.
-Internet/Phone/Cable bills:
-Ink: 8.75%
-See everyday purchases for standard percentage back on other cards.
Department stores:
-Chase Freedom with Chase checking during promo quarter: 9.63%
-Chase Freedom without Chase checking during promo quarter: 8.75%
-Blue Cash Preferred: 3%
-See everyday purchases for standard percentage back on other cards.
Uber:
-AMEX EveryDay Preferred (if you make 30 transactions per month): 4.95%
-AMEX EveryDay (if you make 20 transactions per month): 3.96%
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
-Premier Rewards Gold: 3.3%
-AMEX Platinum: 3.3%
-See everyday purchases for standard percentage back on other cards.
Things to bear in mind:
-If you might need return protection, purchase protection, extended warranty protection, or dispute resolution on an item you’ll probably want to use an American Express card as their protections are pain-free and amazing. If you have a problem with a merchant you can file an easy dispute online. If you buy a final sale item they will take it back without a fuss, or if it’s under $100 they’ll usually credit you without even needing you to send it back. If your computer breaks in the extended warranty year they will refund it.
-You can change how you value each mileage currency and that will change the results. Above is a general guideline, but it’s highly variable based on how you use your miles.
-When buying gift cards for spending you will lose the protections that a credit card offers like dispute resolution. You also have to factor in the “pain” factor of getting the gift card and the fact that you can cash out the gift card at Walmart or other stores for free or for a nominal fee.
-Some of the bonuses have spending caps such as:
-Ink Plus: $50K annual spend in quintuple and $50K annual spend in double point categories.
-Ink Cash: $25K annual spend in quintuple and $25K annual spend in double point categories.
-Freedom: $1,500 quarterly spend in quintuple point categories.
-Blue Cash/Blue Cash Preferred: $6K annual spend in grocery category.
-AMEX Everyday/Everyday Preferred: $6K annual spend in grocery category.
-The points from Freedom and Ink Cash can’t transfer directly into real miles. You or your spouse will need an active Chase Sapphire Preferred® Card or Ink Plus when you want to make that transfer.
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Read the methodology and calculations behind the numbers, and learn to plugin your own mileage values after the jump:
In case you are wondering how I came to the value per dollar spent, here is the breakdown.
Everyday purchases calculation:
-Ink (general spending made via $200 gift cards bought from Staples at a cost of $6.95): 5.58%
If you buy a $200 gift card for $206.95 at Staples you’ll earn 1,035 points which is worth $18.11 at 1.75 cents each. Subtract the $6.95 fee and you’re ahead by $11.16. Divide that by $200 to see earnings of 5.58%. Then just use the cards anywhere like you would use your regular credit card to earn 5.58% everywhere.
Sometimes these gift cards go on sale which make them even more lucrative.
-United Club: 2.55%
You earn 1.5 miles per dollar everywhere at a value of 1.7 cents per mile=2.55% earnings.
-AMEX EveryDay Preferred (assuming you make 30 transaction per month): 2.48%
You earn 1.5 miles per dollar everywhere when you use your card 30 times in a month at a value of 1.65 cents per mile=2.48% earnings.
-United Explorer (assuming you can spend exactly $25K/year): 2.38%
You earn 1 mile per dollar everywhere plus a 10K bonus for spending $25K in a year which means you will earn an effective 1.4 miles per dollar everywhere at a value of 1.7 cents per mile=2.38% earnings.
-Barclaycard Arrival Plus: 2.11%
You earn 2 points per dollar everywhere plus you get 10% of your points back every time you redeem them at a value of 1 cent per point=2.11% earnings.
-Starwood: 2.1%
You earn 1 point per dollar everywhere at a value of 2.1 cents per point=2.1% earnings.
-Fidelity : 2%
You earn 2 points per dollar everywhere at a value of 1 cents per point=2% earnings.
-Chase Freedom with Chase checking: 1.93%
You earn 1 point per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=1.93% earnings.
-AMEX EveryDay (assuming you make 20 transaction per month): 1.98%
You earn 1.2 miles per dollar everywhere when you use your card 20 times in a month at a value of 1.65 cents per mile=1.98% earnings.
-British Airways: 1.88%
You earn 1.25 points per dollar everywhere at a value of 1.5 cents per point=1.88% earnings.
-Chase Sapphire Preferred® Card with 7% dividend: 1.87%
You earn 1 point per dollar everywhere plus a 7% annual dividend at a value of 1.75 cents per point=1.87% earnings.
-Ink, Freedom without checking, Chase Sapphire Preferred® Card without 7% dividend: 1.75%
You earn 1 point per dollar everywhere at a value of 1.75 cents per point=1.75% earnings.
-United Explorer (under $25K spend per year): 1.7%
You earn 1 mile per dollar everywhere at a value of 1.7 cents per mile=1.7% earnings.
-American/USAirways: 1.7%
You earn 1 mile per dollar everywhere at a value of 1.7 cents per mile=1.7% earnings.
-Premier Rewards Gold/AMEX Platinum: 1.65%
You earn 1 point per dollar everywhere at a value of 1.65 cents per point=1.65% earnings.
-Delta: 1.4%
You earn 1 mile per dollar everywhere at a value of 1.4 cents per mile=1.4% earnings.
-Blue Cash/Blue Cash Preferred: 1%
Straight 1% cash back everywhere.
Amazon.com purchases calculation:
-Chase Freedom with Chase checking during promo quarter: 9.63%
You earn 5 points per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=9.63% earnings.
-Ink (via Amazon gift card bought from Staples): 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
You earn 5 points per dollar everywhere at a value of 1.75 cents per point=8.75% earnings.
Airfare purchases calculation:
-Ink (For Southwest flights via Southwest gift cards bought from Staples): 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Premier Rewards Gold: 4.95%
You earn 3 points per dollar at a value of 1.65 cents per point=4.95% earnings.
-United Explorer on United flights (assuming you can spend exactly $25K in a year): 4.08%
You earn 2 miles per dollar plus a 10K bonus for spending $25K in a year which means you will earn an effective 2.4 miles per dollar at a value of 1.7 cents per mile=4.08% earnings.
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
You earn 2 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=3.75% earnings.
-British Airways on British Airways flights: 3.75%
You earn 2.5 points per dollar at a value of 1.5 cents per point=3.75% earnings.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-United Club on United flights: 3.4%
You earn 2 points per dollar at a value of 1.7 cents per point=3.4% earnings.
-United Explorer on United flights (under $25K spend/year): 3.4%
You earn 2 points per dollar at a value of 1.7 cents per point=3.4% earnings.
-American on American flights: 3.4%
You earn 2 points per dollar at a value of 1.7 cents per point=3.4% earnings.
-USAirways on USAirways flights: 3.4%
You earn 2 points per dollar at a value of 1.7 cents per point=3.4% earnings.
-Delta on Delta flights: 2.8%
You earn 2 points per dollar at a value of 1.4 cents per point=2.8% earnings.
Car Rental purchases calculation:
-Ink Plus at Alamo or National: 5.75%
You earn 1 point per dollar at a value of 1.75 cents per point=1.75% earnings. Plus you earn 4% cash back on from Visa SavingsEdge
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
You earn 2 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=3.75% earnings.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-United Club: 2.55%
You earn 1.5 miles per dollar at a value of 1.7 cents per point=2.55% earnings.
-United Explorer (assuming you can spend exactly $25K in a year): 2.38%
You earn 1 mile per dollar plus a 10K bonus for spending $25K in a year which means you will earn an effective 1.4 miles per dollar at a value of 1.7 cents per mile=2.38% earnings.
-United Explorer (under $25K spend/year): 1.7%
You earn 1 mile per dollar at a value of 1.7 cents per mile=1.7% earnings.
Hotel purchases calculation:
-Ink Plus at any Wyndham hotel brand: 8.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings. Plus you earn 5% cash back on from Visa SavingsEdge
-Starwood at a Starwood hotel: 4.2%
You earn 2 Starpoints per dollar at a value of 2.1 cents per mile=4.2% earnings.
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
You earn 2 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=3.75% earnings.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-Ink Plus: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
Restaurant purchases calculation:
-Chase Freedom with Chase checking during promo quarter: 9.63%
You earn 5 points per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=9.63% earnings.
-Ink (For restaurant gift cards bought from Staples): 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
You earn 5 points per dollar everywhere at a value of 1.75 cents per point=8.75% earnings.
-Chase Sapphire Preferred® Card on the first Friday of the month with 7% dividend: 5.62%
You earn 3 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=5.62% earnings.
-Chase Sapphire Preferred® Card on the first Friday of the month without 7% dividend: 5.25%
You earn 3 points per dollar at a value of 1.75 cents per point=5.25% earnings.
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
You earn 2 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=3.75% earnings.
-Ink Cash: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
Gas purchases calculation:
-Chase Freedom with Chase checking during promo quarter: 9.63%
You earn 5 points per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=9.63% earnings.
-Ink (via gas gift card bought from Staples): 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
You earn 5 points per dollar everywhere at a value of 1.75 cents per point=8.75% earnings.
-AMEX EveryDay Preferred (assuming you make 30 transaction per month): 4.95%
You earn 3 miles per dollar on gas when you use your card 30 times in a month at a value of 1.65 cents per mile=4.95% earnings.
-Ink at Chevron or Texaco: 4.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings. Plus you earn 1% cash back from Visa SavingsEdge
-Ink: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-Premier Rewards Gold: 3.3%
You earn 2 points per dollar at a value of 1.65 cents per point=3.3% earnings.
-Blue Cash Preferred: 3%
You earn 3% cash back.
Groceries (Including gift cards) purchases calculation:
-Chase Freedom with Chase checking during promo quarter: 9.63%
You earn 5 points per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=9.63% earnings.
-Ink (via grocery gift card bought from Staples): 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Chase Freedom without Chase checking during promo quarter: 8.75%
You earn 5 points per dollar everywhere at a value of 1.75 cents per point=8.75% earnings.
-AMEX EveryDay Preferred (assuming you make 30 transaction per month): 7.43%
You earn 4.5 miles per dollar on groceries when you use your card 30 times in a month at a value of 1.65 cents per mile=7.43% earnings.
-Blue Cash Preferred: 6%
You earn 6% cash back.
-AMEX EveryDay (assuming you make 20 transaction per month): 3.96%
You earn 2.4 miles per dollar on groceries when you use your card 20 times in a month at a value of 1.65 cents per mile=3.96% earnings.
-Premier Rewards Gold: 3.3%
You earn 2 points per dollar at a value of 1.65 cents per point=3.3% earnings.
Office supply purchases including gift cards:
-Ink: 8.75%
$200 in gift cards earns 1,000 points at a value of 1.75 cents per point is $17.50. Divided by $200=8.75%
-Internet/Phone/Cable bills:
-Ink: 8.75%
You earn 5 points per dollar at a value of 1.75 cents per point=8.75% earnings
Department stores:
-Chase Freedom with Chase checking during promo quarter: 9.63%
You earn 5 points per dollar everywhere plus a 10% annual dividend at a value of 1.75 cents per point=9.63% earnings.
-Chase Freedom without Chase checking during promo quarter: 8.75%
You earn 5 points per dollar everywhere at a value of 1.75 cents per point=8.75% earnings.
-Blue Cash Preferred: 3%
You earn 3% cash back.
Uber:
-AMEX EveryDay Preferred (assuming you make 30 transaction per month: 4.95%
You earn 3 points per dollar on Uber when you use your card 30 times in a month at a value of 1.65 cents per mile=4.95% earnings.)
-AMEX EveryDay (assuming you make 20 transaction per month): 3.96%
You earn 2.4 miles per dollar on Uber when you use your card 20 times in a month at a value of 1.65 cents per mile=3.96% earnings.
-Chase Sapphire Preferred® Card with 7% dividend: 3.75%
You earn 2 points per dollar plus a 7% annual dividend at a value of 1.75 cents per point=3.75% earnings.
-Chase Sapphire Preferred® Card without 7% dividend: 3.5%
You earn 2 points per dollar at a value of 1.75 cents per point=3.5% earnings.
-Premier Rewards Gold: 3.3%
You earn 2 points per dollar at a value of 1.65 cents per point=3.3% earnings.
-AMEX Platinum: 3.3%
You earn 2 points per dollar at a value of 1.65 cents per point=3.3% earnings.
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99 Comments On "Do You Maximize Your Credit Card Spending? Here’s Where You Should Be Using Each Of Your Credit Cards."
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I disagree. Points and miles can be valued at much much higher especially when you are booking F class and last minute tickets.
@Disagree:
What are you disagreeing with?
That’s exactly what I wrote.
If you only redeem for last minute or first class awards then calculate your value for each currency and plug your figures in to determine where you should use each of your cards.
What about the Discover It %5 Cashback categories?
Does the Amex everyday preferred have the same return protection as all other Amex cards ( like the well known protection of the Starwood ) ?
@Zal:
Discover doesn’t publish the categories in advance.
If you have a Discover card you should definitely add those into the equation.
Freedom’s categories are announced in advance and those points can be transferred into miles.
@Berele:
Yes.
How can I sell united points for 1.7 cents
@moshe:
Please take the time to actually read what I wrote.
dan do you think that it pays to go to HKG just to grab some folks that pay 20k for first class, they should buy it by me for 3k?
@broker:
Why would you sell them a $28K seat for $3K? Are you competing against yourself?
Is the discover it card a valuable card to have. I know they give 5% rotating categories and the fico score on the statement. Are those good enough reasons to have the card?
@Disagree:
Not sure I fully agree. Few people personally pay full fare J or Y. On a 6-hour flight to London, is business really “worth” $6000 to you? Come up with a reasonable value ($2000? $2500?) and use that.
Same for last minute tickets. If you normally book last minute and are willing to pay for them, sure, it’s worth the full value. If you normally are willing to pay $300 to go to Toronto, and last minute fare costs $1200, but you don’t pay because you feel that last minute is only “worth” an extra $100, then you’re implicitly valuing last minute to Toronto at $400. Then that’s the value to use. The fact that some small number of people pay $1200 is not particularly relevant.
@JG:
If you get targeted with a good signup bonus it makes sense.
@Anonymous:
All true as well.
Which is why value is totally subjective.
the thing is that most of the guys that travel often to the far east know already the trick that you pay just around 3/4k for a ticket,also there is tons of websites for that
Dan – This is a fantastic post! I love your website. I’ve been following you for 2 years now. I sold 5K worth of miles earlier this year and by June hope sell another 6k. While I did use a broker, I felt it more professional and less risky. The $$ will pay for my family trip to Israel this summer. What do you think? For the average person who has a day job and can only put in so much effort – I think it’s not too bad. I am not living and breathing this every day…….
@broker:
Maybe, maybe not.
Not everyone knows. Many won’t even care when it’s on their company’s dime unless they own the company.
@Curious:
I personally use my miles to fly, but if a broker makes it easier for you then there’s no shame in that route.
Dan, thank you for taking to your time to post this very informative information.
What about gift cards bought from grocery stores with freedom during promo for general spending?
When using BA miles to fly via AA, will I get a free bag if paying the taxes with my AA card?
@Oleg:
De nada.
@Mo:
Any grocery purchases would fall under the grocery category.
@abraham:
Only United requires you to use their card to get free bags.
AA, Delta, and USAir do not.
Can someone please clarify “selling miles to brokers” for me. Didn’t the post mention that airlines will shut you down? Haven’t there been articles about airlines taking away customers accounts for this? Lastly, don’t customers agree knowingly / unknowingly when they sign up for miles accounts / credit cards that they are not to be sold on this “grey market”?
So all I have to do is show up and show them I am a cardholder and the bag will be free? Even though I didn’t book via AA?
@john:
Some airlines, like American, enforce those terms.
Others, like Delta, don’t.
Others might enforce it for people that do it often.
When you signup for an airline program you agree to those terms, so if they bust you you’ll be at their mercy.
@abraham:
As long as your AA, Delta, or US mileage number is added to the reservation (the same number you used to apply for the credit card) you will automatically get a free bag.
When using BA Avios for an AA ticket you can use Finnair.com to add your AA mileage number to the reservation.
@Dan – Great Post. Can you just explain one thing – why do you value the Chase points at 1.75 cents. Does anyone pay nearly that much anymore?
DAN you, my friend are good … loved the article.
How do i get 7% extra from saffire preferred?
If I am a card holder of Freedom ( under my wife’s account)and only I have a chase account. do we get the extra bonus ?
Any advise for utilities?
@Thank you:
Read what I wrote again about value and brokers.
@Moshe:
Thanks.
The 7% applies to people who had the card from July 2014 or earlier.
If you add your wife as a joint checking account holder you will get the 10% bonus. Otherwise you would not.
Utilities would be an everyday purchase.
BH
Is the market place in crown heights on part of the freedom Q bonus?
@Moshe:
http://www.dansdeals.com/archives/59110
Wow Dan thanks. And thanks so much for taking the time making this post. One last question, regarding the amex warranty policy, if your item breaks within the manufacturers warranty period, but you don’t get around to contacting them or they won’t refund you, will amex refund you? Additionally, will they refund you if there is physical damage?
Hi Dan!! this is just a great and informative post!!!
whats the best and actually easiest way too cash out a Gift Card??
How About a Dans Deals Forum to meet the Great ppl u meet on 1st class so we can enjoy as well?!?!…. 🙂
Dan: “That’s an ridiculously extreme way to look at things, but it shows how difficult this exorcize is.”
You do exorcisms?????? Does it earn miles?????
@Dan:
Hey Dan above (and many other places you wrote that freedom can’t transfer directly to miles wo the sapphire or ink but in a comment just a few moments ago you wrote they can transfer to miles VS discover which cannot. Which is it? And what should I do if I don’t have either of those but want the freedom to transfer into miles?
If you refer a friend to discover then you & the person that you refered gets $50 cash back after the new cardholders first purchase.
@abraham:
You have 30 days of time from the date of the incident to report it to AMEX.
Officially physical damage is excluded, but actual experience is that they will usually cover it.
@shauly:
Redcard, money orders.
@Steve:
#LessorKnownDanFacts
@Frummy:
Freedom can’t transfer directly into miles, but if you or your spouse has a Sapphire Preferred or Ink then you can.
Discover can never transfer into miles no matter what.
@Bamboo:
My wife got a $200 offer in the mail. Seems like they mail her offers every single day.
When they get up to $400 she might just sign up 😉
Dan- You’ve previously pretty much circumvented the whole selling miles issue. What brought about your change of attitude about selling miles? Since when is it permitted to do things that aren’t allowed but only sometimes enforced??
@everythingjay:
I’m not anyone’s rabbi or priest.
I personally don’t do it. I’m just laying it on the table and explaining the possible pitfalls.
There’s nothing illegal about it, but it is against the terms of most airlines which is why you may lose your miles but you won’t go to jail.
Dan,
If I just got the chase satphire preferred and already have the chase freedom, should I pay for groceries with the satphire to get the 40k bonus points or take that 5% with freedom? What’s worth more?
We have had the saphire since march 2014… how do i get the 7%?
The free bags for having (or for United, using) the CCs, are domestic only, right? You get one bag internationally, but that’s it via CCs, without other status, correct?
thanks dan, great post, i have a cheat sheet for my family in process, this is really helpful
Thanks Dan! You are awesome! I know you’ll think I’m crazy but I personally find the highest value in cashing out all of my chase points for statement credits as all of my travelling is usually covered by my miles from AMEX cards. If you put the money saved towards retirement or the stock market the value could be substantially higher than 8.56% or whatever. A penny saved is at least a penny earned as opposed to spending it on vacation etc. Just saying.
As an aside I am a casual DDF user and you recently facilitated a sale of item I was looking to get rid of. Very much appreciated!! All the best and continued success with your fabulous website!
I haven’t found any gas station gift cards at office supply stores except for Shell. Shell stations around here are high priced, making it basically not worth it. Has anybody found non-Shell cards at Staples or Officemax?
What about the Marriott card?
@Jordan:
Groceries on Freedom this quarter.
Find other ways to get the $4K spend for Sapphire.
@Moshe:
It will post on your February statement for your 2014 spend.
@HDS:
The United Explorer gives 1 free bag domestic only.
The United Club gives 2 free bags worldwide.
@chaim:
Great!
@everythingjay:
Cashing them out for 1% is a very poor use of the miles indeed.
@yy:
Did you factor in that gift cards can buy gas at the cash level?
You effectively get 5 points per dollar and you pay the lower cash price.
@hey:
Awful card for spending.
Thank you!
Wow Dan this is as detailed as it gets!
Does anyone know the Chase (Freedom MC) returns protection policy for final sale items? I bought something from Lacoste and they won’t take it back due to final sale. It was only $20, so I’m not sure it’s worth the hassle shipping it to Chase/MC for a refund?
Any advice would be greatly appreciated
@Jordan:
@JamesIV:
😀
@me:
Freedom does not offer return protection.
@Dan:for a aa reservation using avios, once usairways merges, how would I get my free bags with a usaor ways cards, do I just add my USairways # to the reservations? Can I just call?
Bottom line from the post…..is the Ink card the best overall card to use?
so what i understand is that for purchases that have no special bonus for any card , will the amex everyday preferred be the best to use ? because the premier rewards card you just earn 1 point on each dollar but with the everyday preferred you can get 1.5 points for each dollar if you make 30 transactions a month . right ?
@yy: Two other things to consider: If you use Stop & Shop/Giant gas points, you will buy gas at Shell. Also, reportedly, Shell gas gets better mileage. I don’t know if this is true; does anyone know if this is a fact or a hoax?
@Dan: You wrote that Amex ED Preferred offers return protection. What about the Everyday (not Preferred)? Thank you.
Dan, as always, your comprehensive knowledge is amazing!
Isn’t the US Airways card a 50K signup bonus?
For car rentals, shouldn’t it pay to factor in the rebate that you get from some rental car companies for using the INK card?
For Hotels your should add that you get an extra 5% back for SPG Biz card used at Hyatt
Dan, AMEX rep claims they wont give me a sign up bonus for ED card because I already have other AMEX cards… any advice?
@Eli: what rebates do you get from car rentals for using ink?
Dan,
I value Barclay approx..2.5% In addition to 2.2% if you book through say JetBlue they give you 6 true blue points per Dollar valued at 1.5 cents each-basically 9 cents per dollar. In addition you are getting 2.2 percent for paying by card for the trip. On a $2200 vacation that’s an additional $198 in trueblue and $48 in cash back for a total of $246 additional. On $100k spend you are getting nearly 2.5% back every time without playing games,transferring,availability, limited partners,devaluation etc…
Hi Dan,
1. You wrote that the ‘Chase United MileagePlus Explorer’ has an “Annual fee: Free then $95” which is what I also see on United’s website, I have a ‘Chase United MileagePlus Explorer’ MasterCard for a while already but I’m not paying anything yearly!? What’s different? Does it make a difference if it’s a Visa or MC? Or am I just Grandfathered in? (My card used to be something else [I think a different airline] before it became United)
2. In order to get the ‘Fidelity American Express’2% cash back I need to have a Fidelity account??
I hope I’m not bothering you (or anyone) if these questions were asked already on this post or if there is a dedicated blog/forum post for any of my questions and if there is can you just direct me there?
On the Visa 4% back for National/Alamo and on the MC (no longer available) I get 5% for Avis/Budget.
Thanks for all this detailed info which must have taken quite siome time to put together. You’re the best!
“My wife got a $200 offer in the mail. Seems like they mail her offers every single day.
When they get up to $400 she might just sign up ;)”
I have that issue as well. Within the past month I’ve received over 15 offers but not one had a signon bonus. Seriously stop wasting trees and make the hard pull worth my while.
Dan
Do u think it’s still worth to pay $175.00 for the premier gold card from American express, even with out the 15000 yearly bonus points?
Hi Dan – can you explain what you wrote about getting a free suitcase when booking AA flights using Avios – by adding your AA number on Finnair.com. How does that work?
Dan,
Capital one venture card give 2 miles per dollar what you can use to purchase Amazon gift cards. That means 2% Amazon credit back on every purchase
Dan, Fidelity actually gives you 2.04% cash back if you have a Fidelity brokerage account…you get a 2% bonus on the 2% for a total of 2.04% when you allow the cash to automatically flow into the brokerage account
one day I’m going to actually sit down and read this post. but from the looks of it, it seems you write a very informative post. thank you
@dan thanks so much ! Small question as you wrote that its going to be changes to the us airways dividend miles … Will it change the value of the pionts ? Thanks again for this post and for your time creating it !
Capitol one quicksilver card gives me 1.5% straight cash back for any and all purchases, in any form (ck, st credit, etc) at any time (no min to redeem).Nice card to carry.
@euphor:
Yes.
@steve:
Depends if you’re willing to mess around with gift cards.
@sam:
Yes.
@Anonymous:
Yes.
@Eli:
Yes and yes.
@DanR:
Only at some Hyatt brands and only in the US.
@Ari:
That’s false.
@David:
1. Hard to say what card that is, but it doesn’t exist for new apps.
2. You would need a fidelity account.
@Moish:
Thanks.
@Tmosk:
Depends on how often you buy tickets.
For most people it’s probably not worthwhile, though with 5 AUs and SBS it won’t cost much.
@HesderGuy:
Out of date article, but you’ll get the idea:
http://www.dansdeals.com/archives/29252
@Yitz:
Doesn’t seem like a good value to me at all.
@Dave:
It may.
@quicksilver cardholder:
How is 1.5% everywhere a good deal?
Sounds awful to me. And you need 3 hard pulls just to get a Capital One card.
Didn’t see anything for the OBC 🙂
Dan,
Do you think it make sense to use chase freedom card for everyday purchases and for the 5% Q bonus’s category and transfer over the reward point to British card for avios and get the best domestic miles value. Is that a fair a approach ?
To more value… right ?
Dan,
If I have the regular Chase Sapphire (not preferred, which is no longer offered) are the 1:1 point valuations the same as with a Sapphire Preferred? And can I transfer Chase Freedom points to it? Essentially, other than some of the travel protections and international abilities, what is the difference between the regular Sapphire and the Preferred.
i remember hearing that if you once got the bonus from an amex starwood card you cant get it again, is that true?
Dan, now that Citi Premier Thank You points can be transferred to partners, curious why you don’t include them in your analysis. 3X for dining/entertainment seems like a pretty good deal. Thanks.
What does this add to an article you made a few months ago advising where to use your cards?
Hi, is the Navy Federal credit Union nRewards card a decent card to get? Free, with 1% on everything, plus you can get a lot more, for example 10x points on Macys sometimes, they have tons of stores, with different bonuses etc.
Also, where is the best place to redeem United mileage points for domestic travel? Also, two one ways, one round trip?
Tbanks!
@Dan
What’s the best card to use in Erez Yisroel
Dan – can I get ink plus even if I don’t own a business?
which is the best card to buy tickets for Disney?
Hi dan thank you for all your time and advice. I am new to your site so forgive any “easy” questions. I got a 100k aa platinum offer i took. I dont think i am going to keep the card, since doesnt make sense for me but i have the 100k points. whats the best way to get as much as possible for it. also my everyday card is the capital one 1.5 cb card. saw you said not worth it. what is the best card, i dont fly too much and not last minute. Thank you very much in advance!
To those questioning the wisdom of selling miles:
1. Dan made it very clear that it is simply an option. Take it or leave it. Plenty of people sell their miles, and plenty don’t. Go take your outrage elsewhere.
2. Yes, there is risk (and with certain airlines, such as UA and AA, the risk is greater), buy it should be noted that there are 2 types of risk.
1. The person selling the miles might have his/her account shut down. But s/he will at least have the cash from the broker from selling the miles. The obvious ‘solution’ is to only sell from an account you can afford to lose, such as leaving it with no miles. 2. The person who then makes the tickets for the end consumer runs the risk of having the ticket cancelled. They will then need to make it up to the customer, at often great expense. This is why they charge the premiums they do.
3. As Dan pointed out, selling miles is NOT illegal. It is simply against the airlines’ policies and T&Cs. It is of the same legality as HCT. I personally have absolutely no qualms in violating every single T&C of pretty much any airline. They have little to no moral authority, and it is they who have engendered a very real us-vs-them dynamic in their customer relationships. May the grey market for miles continue to grow, stronger and stronger. Until airlines stop devaluing my miles, stop strangling availability, stop “enhancing” their programs, I will continue to make use of my miles as I see fit.
I signed up for amex offer and was not rewarded signup bonus. Rep told me it’s because I had this offer previously. Is there any way for me to get it honored?
Just wanted to stick in a Thank You!
@Dan: is a discover offer for 125 after spending 750 in three months worth it?
have to book a ticket to israel on delta..
what is my best cc (aMex 3x business points ? Ink ) and booking method(direct vs orbitz etc.)
Thank you
my credit score is around 670. i want to apply for all this credit card thats on your list. will it be a smart move to apply with in the hour to all of them? of i should use a 3rd party company who can approved me for this credit card.
@dan can someone advise me how to downgrade these cards after having them a few years to take advantage of reapplying for the sign up bonus? I currently have in my arsenal chase freedom, two CSP, and United mileage plus club card (which i just downgraded to united explorer) after a year. and amex platinum (for a really long time, like 25 years) my points are valuable to me as biz class to israel once a year. (miami) i have usually redeemed awards on United, AA(BA)
Question Which CC is better for points the Chase freedom or Amex sky?
Also is it better to get a card with a department store on it. Do you get more out of it?
Thanks
Dan,
Thank you so much for all this info.
This prob isn’t included in this article
but say I wanna get a AmEx Everyday preferred for the bonus then downgrade to standard AmEx everyday before paying the fee, is that possible? Will I be able to keep the Membership Reward points?
@Disagree: Dan, just so you know, I followed your link to the Staples $200 visa gift card, ordered 7 of them online plus whole foods cards. The order went through and then two days later, Staples cancelled it. I called them to find out why and the representative said we prefer you come into the store to make this purchase. Creeped me out. Thoughts?
@dan can you pls update this awesome post, especially now that AMEX removed foreign transaction fees and Ink changes?
I second NTSCCG’s request!
Hi all,
Q Time: I’m applying for a new CC. Which, if any, of the Chase Freedom and Blue Amex am I likely to get with a 720 Fico score?
Also: I owe about $200 on my other CC today. Should I pay it off right now before applying?
Thanks!
Forgot to mention: In addition to Chase Freedom and Blue Cash Amex, Im also considering the Fidelity Amex.
Thanks in advance!
For online shopping you need to consider the at&t citi card for x 3 TY points.
@dan Can you update this amazing post? Its been a year and things have changed…
http://www.dansdeals.com/archives/97094
What about the 300 visa card for 308.95 ? better option, no?