Credit Cards
I tried to follow Dave Ramsey for a while. It is the only way I could get my wife on the same page as me financially. But one piece that I think that Dave gets wrong is the no credit cards, whatsoever. I get it, there are some people that do not have the discipline or competency to pay off their balance every month. And I know that there are studies that prove that you spend more when using cards than cash, but for us naturally frugal folks it makes sense to take advantage of these tools that reward you for spending money that you were going to spend anyway.
There are also different methods out there of collecting and using points for travel, but I have always been a fan of cash back cards. Cash is more fungible than points, I can take it and invest it where I can't do that with points. So I have leveraged (pun intended) several different cards to build a card portfolio that delivers the highest cash back with the least effort. Here are the cards that I use:
- American Express - Blue Cash Preferred - This card is great for grocery shopping and streaming services, giving you 6% cash back for each of those categories (6% back on groceries is capped at $6k spend per year). It also gives you 3% back on gas and transit purchases and 1% for everything else. This card has a referral bonus, if you sign up through the link above, you receive $250 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive the $250 back in the form of a statement credit. Currently, they are also offering 0% intro APR on purchases for 12 months from the date of account opening, then a variable APR, 13.99% to 23.99%. There is also a $95 annual fee, I know this is a deal-breaker for some people, but to break-even on the fee you only need to spend ~$132 per month on groceries. Another strategy is to buy gift cards at the grocery store to max out on the $6k limit, but that is for another post. You can redeem the cash back as a statement credit after you accumulate at least $25 worth of rewards.
- American Express - Delta Skymiles Gold - I know I said that I prefer cash back to points, but I fly Delta almost exclusively, so this card is great for me. You get your first bag checked free, which saves $50 per trip and if you take two trips per year it pays for the $99 annual fee (the first year is free). And you get SkyMiles for each purchase. This card also has a referral bonus, if you sign up through the link above, you receive 35,000 Bonus Miles after spending $1,000 in purchases on your new Card in your first 3 months of Card Membership.
- Sam's Club Credit Card - I have a Sam's Club membership, so this card works for me. It offers 5% back on gas on the first $6k per year then 1% after that, this is the main use for me. Then 3% on restaurants and travel, I also use this a good bit as well. And 1% on everything else. There is no annual fee for this card other than maintaining your Sam's Club membership, but there is no additional charges for having the card. Sometimes they will offer special cashback incentives for using the card on Sam's Club purchases. The main drawback for me is that the cashback is only redeemable once per year, but it is usually a large amount.
- Chase Freedom/Citi Dividend - I use these two cards for their rotating 5% cash back categories. The categories vary by quarter and are wide ranging. I don't think the Citi Dividend card is available to new applicants (I picked it up back in college).
- Citi Double Cash - For things that don't fall in any of the categories above, I use this card. It offers 2% cash back on all purchases, so that is the minimum I receive for anything I buy.
*Any included links are my personal referral links and I may receive compensation for you using them to sign up for any of these cards.
