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Remember the days before reality television? I barely can. So many of our viewing choices these days fit squarely in this genre. I think reality TV is such a mainstay because humans have voyeuristic tendencies. We want to see what it’s like for others to find love – even in absurd situations. We want to watch people endure hardship in an attempt to survive in the wild. The gnarlier the experience the better. We even like to see the heat turned up in the kitchen as wannabe chefs compete for glory… all while a British guy screeches about their ineptitude.
I’m not immune to the desire to binge on reality TV. I’ll readily admit that Alone is one of my personal favorite TV shows. And I might or might not have a Gordon Ramsey tattoo on my bicep. Ok, I made that one up.
But in the spirit of putting it all out there, we’re going to open up the contents of our wallet to you, dear How To Money listener. Life is just more fun when you get a peek behind the curtain.
The Benefits of Having Credit Cards are Plentiful
It’s important to quickly mention that credit cards offer a lot of perks. We discussed that in an episode about crucial credit card benefits recently. Some would tell you to avoid credit cards altogether. But that’s a bad idea. We would tell you to use them consistently, but to do so wisely.
Don’t ever buy something on credit if you don’t have the cash in your bank account to pay it off.
We also believe that everyone should have a minimum of two credit cards in their possession. Is it smart to get more than that? Probably. And it’s crucial to apply for credit cards based on how you spend. This is a case where getting a recommendation from a friend isn’t good enough. The credit card they use might not be all that great for you.
So we’ll do our best to not just show you what is in our wallet, but why it’s there. Hopefully that can help you decide whether or not the cards we use the most, make sense for you or not.
Check Your Credit Score First
Having an above average credit score is important when it comes to getting some of the most rewarding cards out there. If your score sucks there’s a good chance you’ll get declined. Aim for a score that is at least above 680. If you raise your score above 740 you’re likely to qualify for most of the top cards out there.
You can check your credit score for free with most credit card issuers. Ironically, if you’re reading this, you might not have a credit card yet! If that’s the case, check out CreditScoreCard.com. Discover gives you access to your credit score for free whether you have a Discover credit card or not.
Also, if you credit score is extremely low, you can still get a credit card that has rewards. Check out our post on the best credit cards for unemployed people, which are cards that have forgiving application requirements. Also check out these best secured credit cards (they require no income verification or credit check)
Here are the Credit Cards in Joel’s Wallet
The card I’ve had the longest is the Fidelity Visa card. That gorgeous green piece of plastic has been in my life for a decade and a half. What I love about this card in particular is that you earn 2% back on every purchase you make. And that money can be used to fund a retirement account through Fidelity.
Haven’t opened up a Roth IRA yet? Let your credit card help you out! There’s only one other card that offers you a consistent 2% cashback bonus. Having a heavy hitter go-to card like this is a no-brainer for most folks.
Have I mentioned on the show how much I like Costco? Oh, good. I didn’t want that to go unsaid. But this is just one of the many Costco membership benefits I take advantage of, so the Costco credit card is an important part of my plastic collection. This card offers 2% back when shopping at Costco. Not bad. But it also gives you 4% back on gas purchases and 3% on restaurants & travel.
That makes this card an excellent choice when at the pump, eating out, and at your favorite warehouse club. This card provides other helpful perks too. I use this card when buying major appliances because of the extended warranty protection that it provides.
Neither of the cards I’ve mentioned so far come with an annual fee. But my next favorite card comes with a $95 annual fee, although it is waived for the first year. I’m talking about the American Express Blue Cash Preferred card. This gem of a card is another one that I get a lot of use from. The biggest perk is snagging 6% back on all of your purchases at the grocery store. A recently added benefit is that you score 6% back on your streaming service spending. Those benefits alone make this card worth considering for lots of folks, in particular for families with a lot of mouths to feed. Terms apply.
The coolest side benefit of this card is return protection. You are able to return purchases to American Express within 90 days if the retailer won’t take that item back. You’ll also score 20% off on all Amazon.com purchases for the first six months in addition to a $250 bonus for spending $3,000 in the first 3 months. What’s not to love!?
Here Are the Credit Cards in Matt’s Wallet
Now that Joel has passed me the mic, it’s time to share what credit cards I’m using the most these days. This has shifted over time as I used to take a super minimal straightforward approach, but these days I’ve decided to optimize fully based on my family’s spending. So I’ll approach it with those different categories in mind:
Groceries – First up in my wallet is the American Express Blue Cash Preferred card. There’s some bestie overlap on this one. And I actually avoided this card for a while because of the annual fee. But after running the numbers I realized that was shortsighted and could save a ton of money on groceries. When I earn 6% cashback on up to $6,000 in groceries every year, we’re talking about an extra $360! So let’s take it back to some 1st grade math: is $360 > $95? Duh. So if you’re spending big money at the grocery store every year, then the Blue Cash Preferred card makes a ton of sense for you. Terms apply.
Restaurants – After a review of our in-person spending, I quickly realized that aside from the money we spend at the grocery store (mostly Aldi), the next most expensive category in our budget is on eating out. And so naturally it made sense that I would need to find a card that prioritized restaurant spending which is how I found the U.S. Bank Altitude® Go Visa Signature® Card. This card offers 4% cash back on charges made at restaurants with no annual fee. If you have standing date nights on the calendar or you like to support your local pub, make sure you’re getting rewarded for it!
Gas – This is one that Joel turned me on to. After joining Costco in order to take advantage of their home refinance products, it made sense to also get the Costco Anywhere Visa card. And even though we’re infrequent Costco customers, the 4% cash back at gas stations makes this one worth keeping around in my wallet.
Everything Else – Now the last card I’m going to share with you isn’t technically one that I carry in my wallet, but it still deserves to be mentioned. I’m a big fan of the Citi Double Cash card because it offers a nearly unmatched 2% cashback on all purchases with no caps on the amount of cashback you earn. And did I mention that it doesn’t have an annual fee either? The simplicity and straightforward nature of this card definitely lends itself to financial minimalists who don’t want to have to think about credit card rewards more than they already do. (If only it came in all white or black).
But you might be wondering: “why don’t you carry this one in your wallet?” Well it’s because I only use this card for online purchases and any automatically recurring bills. Since the rest of my in-person purchases are already covered, I use this card for everything else online- you can’t beat a consistent guaranteed 2% with the Citi Double Cash card.
Also, having started many businesses and side hustles, I have tried out quite a few different business CCs over the years. Here’s a full list of the best credit cards for consultants, if that’s something you’re interested in!
Should You Get One of These Cards?
Getting a new credit card just because Matt or Joel use it would be a bad move. There are other great credit cards out there besides the ones that we use. So much of determining the right card for you is running the numbers to see how the rewards will stack up in your real-life scenario.
For instance, my sister has the American Express Platinum card that comes with an annual fee of $695. I, on the other hand, do not have this card. But my sister travels frequently. She uses the additional credits like the $200 hotel credit and the $200 airline credit. Using those two benefits alone pay for more than half of that pricey annual fee. This card offers a bevy of other valuable benefits that she derives value from.
Don’t let an annual fee, even a hefty one, turn you off. Run the numbers to see if that annual fee is worth it or not given the context of what that card offers and your spending habits. For big spenders, especially those who like to travel, those cards can be a no-brainer.
Factoring in other advantages like a strong sign-up bonus are important too. Remember, the Chase Sapphire Preferred card that Matt has in his wallet? It can net you $1,250 right now if you meet the minimum spend of $4,000 within three months. If you can hit that without spending more than you otherwise would, it’s a killer deal. So make sure to factor that into the equation also!
Don’t Overthink Your Credit Card Assortment
Having your budget on hand is helpful because it can inform the direction you go in. If an inordinate amount of your monthly spending happens at Target, for instance, you’ll probably want to get the Target Red Card since you’ll nab 5% off all the purchases you make there. Or if you find yourself spending quite a bit at the grocery store like Matt and I then you’ll probably find the American Express Blue Cash Preferred to be a winner for you as well. Terms apply.
Some people create spreadsheets and go after the credit card rewards game in an incredibly analytical way. If that’s how you roll, more power to you.
But most folks just want to be able to quickly determine which two or three cards offer the best rewards combo for them. That shouldn’t be too difficult to figure out. There’s no need to go overboard.
* Advertiser Disclosure: How to Money has partnered with CardRatings for our coverage of credit card products. How to Money and CardRatings may receive a commission from card issuers.
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