Featured Review: Best Rewards Credit Card Combos (before April 2014)
Updated March 22, 2014. For our updated review please see here.
Up till now, our Top List has been a collection of best individual rewards credit cards currently available. Theoretically you need way too many cards to maximize rewards - one for gas, one for groceries, one for dining, one for airfare, one for hotels, one for general spending, and so on. In real life, not every one of us can do this. Here we will recommend the best two-card combos that give you much bigger rewards than a single card while keeping things easy to manage. One thing to note before we get started is that since everyone's situation is different, it is very likely that you will find none of the combos we recommend gives you the best rewards - here we are just throwing out some ideas.
FIA Fidelity American Express + one category bonus cash back card
This combo is people who love cash back! FIA Fidelity Amex has always been our benchmark due to its unlimited 2% cash back without an annual fee. You may also consider two great alternatives - BofA BankAmericard Privileges (up to 2.2% travel rewards, $75 annual fee) and Barclays Priceline Visa (2~3% cash back, no annual fee). No doubt you will put most of your spending on one of these cards. However, adding a 5% category bonus card will certainly get you more cash. You need to do your math and figure out which category you spend the most and how much you can earn by carrying an extra card. Say if you spend $500 each month on a 5% category, every year you will earn $500 x 12 x 3% = $180 beyond your normal 2% cash back by carrying this extra card. Some people may say "$180 is awesome! I am in." but some may say "For the hassle of remembering which card to use, I will pass." So it is totally up to you. Now let's look into some bonus categories to give you some ideas:
American Express Starwood Preferred Guest + Chase Sapphire Preferred
Amex SPG (annual fee $65) returns exactly one Starpoint per dollar spent and Starpoints are probably the single most valuable currency in the miles/points world due to the fact that they not only worth a lot when redeemed for SPG hotel stays but also can be transferred into around 30 airlines including American, US Airways, Delta, Alaska, Hawaiian, British, and so on at 1:1 ratio (and 1:1.25 if transferred in bulks of 20K). Many travelers value Starpoints more than 2 cents a piece (we value them at 2.25) and that is how they prefer this card over those high earning cashback cards.
Chase Sapphire Preferred (annual fee $95) is another mighty player in the miles/points arena for similar reasons. Generally Sapphire Preferred returns 1.07 Ultimate Rewards (UR) point per dollar spent - we value a UR point at 1.8 cents thus this card returns 1.93% value, a little less than 2% cashback cards. However, Sapphire Preferred also offers powerful bonus categories - 3.21 points on airfare through Chase and 2.14 points on travel and dining. What is more important, UR's transfer partners include United, Southwest, Korean Air, British, Hyatt, etc, many of which are not partners of SPG and this is exactly why this combo is so great! Another thing to note is that Sapphire Preferred has some better protections regarding Travel Accident, Travel Delay, Baggage Delay, Lost or Damaged Luggage, and Price Protection.
Obviously, you want to put SPG purchases on Amex SPG and travel (including airfare) and dining purchases on Sapphire Preferred. As for general spending, you won't really go wrong with either card. Assuming you want to collect both currencies, Amex SPG offers a better value over Sapphire in our case - 2.25% vs. 1.93%. However, when purchasing items that may have price drop within 90 days such as electronics, we will go with Sapphire Preferred for its Price Protection.
Chase Sapphire Preferred + Chase Freedom
As mentioned in the previous section, Sapphire Preferred is pretty big by itself if you value miles/points high enough. Adding Chase Freedom will give you more boosts in points due to its 5x bonus categories. Even though Chase Freedom is always branded as a cashback card, it actually earn UR points. Normally you won't be able to transfer UR points earned through Freedom to frequent flyer miles/points since it is considered a lower tier UR product, limiting the value of a point at 1 cent. However, the secret here is that if you have a premium UR card such as Sapphire Preferred, you can transfer the UR points earned from Freedom to Sapphire Preferred account so all of sudden these points become transferable to miles/points. This hugely increases value of Chase Freedom. For example, we value a "premium" UR point at 1.8 cent so once combined with Sapphire Preferred, Freedom returns 9% value for its quarterly rotating bonus categories! To maximize rewards, you need to remember to sign up each quarter for Freedom's bonus categories and use Freedom only for those categories, since for everything else, Sapphire Preferred offers a slightly better value over Freedom - 1.07x points vs. 1x points. The last thing to bear in mind is that there is a quarterly cap for 5x bonus category earning on Freedom - $1,500. So if you do everything exactly right, you will be earning 30,000 valuable UR points a year from Freedom by adding this non-fee card to your wallet!
American Express Premier Rewards Gold + American Express Mercedes-Benz Credit Card
Besides SPG and UR, Amex Membership Rewards (MR) is another program that allows points to be transferred into frequent flyer miles/points. Amex's partners (they include Delta, Hawaiian, British, Air Canada, ANA, etc.) are probably not as desirable as either SPG or UR after its non-intentional devaluation in 2011. However, since Amex still runs good transfer promotions (20-50%) often, we think this program is still competitive. Currently we value one MR point at 1.6 cents. Amex PR Gold is still the best Amex card to earn MR points. With a relative high annual fee of $175 a year, it counters with 3x airfare and 2x gas and grocery as well as a booster of 15K MR points after you spend $30K each year. So in order to maximize rewards, you need to spend exactly $30K on this card. The relative unknown Amex Mercedes-Benz Card which carries a $95 annual fee and offers 3x gas and 2x dining, is a great card to pair with PR Gold, since they both earn MR points which will be pooled together automatically and together they cover four bonus categories.
The strategy here is to put gas and dining (and of course Mercedes) purchases on Mercedes-Benz Card and everything else on PR Gold. For example, your annual total spending is $45K with $6K going to airfare, $6K to grocery, $7K to gas, and $8K to dining. You will earn 30K + 15K + 12K + 6K = 63K points from PR Gold and 15K + 14K + 8K = 37K points from Mercedes-Benz Card, a total of 100K points. Based on our 1.6 cents per point value, your total rewards are 100K x $1.6% - $175 - $95 = $1,330. By comparison, if you use Fidelity Amex + Citi Forward combo, you will earn $1,140 in cash back.
Citi Prestige World Elite MasterCard + Citi Forward
Citi Prestige, with a $450 annual fee, is marketed as an elite travel credit card that rivals Amex Platinum. However, while not matching Amex for several key features, Prestige shines in different areas. For one thing, if you can effectively use the $200 airline incidentals as well as the annual companion ticket for international economy class, this card more than pays itself and you will find it has the potential to be the most rewarding credit card due to Citi's unique "flight point matching", "annual relationship bonus" (up to 50%), and the newly enhanced redemption option (1.6 cents per point on American/US Airways flights). Our analysis shows once perfectly matched with flight points, it returns a minimum 3.28% for general spending and 4.96% for dining. The maximum return rate is 4% for general spending and 6.4% for dining. You can pair this card with a bonus category rewards card such as PenFed Visa, Citi Forward, Amex Blue Cash Preferred, or US Bank Cash+ (see details in the first section of this review). We know that Citi Forward has a duplicate bonus category here; however, we want to show how this combo can be potentially huge. Citi Forward (now only to the existing customers) returns 5x on dining and entertainment - normally meaning 5% rewards. However, once paired with Citi Prestige, all ThankYou points can be pooled together and redeemed for the air travel option that gives 33% or even 60% (on American / US Air) bonus in value. In this way, Forward returns up to 8% on dining which is 3% higher than dining bonus through Prestige. The most important fact is that Forward also returns up to 8% on entertainment which includes Amazon purchases - this can be crazily lucrative. A combo that gives you 8% for dining and Amazon plus at least 3.28% for everywhere else is hard to beat!
It sounds all fantastic, but we want to remind readers that to achieve this, "flight point matching" is the key and can be very difficult for most people. For example, if you annual spending is $50,000 on Prestige, you need to fly 50,000 miles (e.g. five round trips between San Francisco and Tokyo) a year and charge your flights to this card to achieve maximum rewards. For one thing, most people simply don't fly that much (50,000 miles put you among the mid-tier elites in most major U.S. airlines). For the other, most frequent flyers that do fly this much are business travelers and can't have their business flights charged to their own personal cards. However, even if you don't have the perfect matching, this combo can still be powerful. For example, let's say your annual spending on Prestige is $50,000 (with all dining and Amazon charged to Forward) and you are a Citigold client, then your relationship bonus is 20%. If you only have 25,000 miles of flights that you can take and charge to your card, your return rate for general spending is still 2.72%, beating all cashback or cashback equivalent competitors. And of course, dining and Amazon still return 8%.
Up till now, our Top List has been a collection of best individual rewards credit cards currently available. Theoretically you need way too many cards to maximize rewards - one for gas, one for groceries, one for dining, one for airfare, one for hotels, one for general spending, and so on. In real life, not every one of us can do this. Here we will recommend the best two-card combos that give you much bigger rewards than a single card while keeping things easy to manage. One thing to note before we get started is that since everyone's situation is different, it is very likely that you will find none of the combos we recommend gives you the best rewards - here we are just throwing out some ideas.
FIA Fidelity American Express + one category bonus cash back card
This combo is people who love cash back! FIA Fidelity Amex has always been our benchmark due to its unlimited 2% cash back without an annual fee. You may also consider two great alternatives - BofA BankAmericard Privileges (up to 2.2% travel rewards, $75 annual fee) and Barclays Priceline Visa (2~3% cash back, no annual fee). No doubt you will put most of your spending on one of these cards. However, adding a 5% category bonus card will certainly get you more cash. You need to do your math and figure out which category you spend the most and how much you can earn by carrying an extra card. Say if you spend $500 each month on a 5% category, every year you will earn $500 x 12 x 3% = $180 beyond your normal 2% cash back by carrying this extra card. Some people may say "$180 is awesome! I am in." but some may say "For the hassle of remembering which card to use, I will pass." So it is totally up to you. Now let's look into some bonus categories to give you some ideas:
- Gas Stations: get PenFed Platinum Cashback Visa which gives you unlimited 5% cash back at gas stations.
- Groceries Stores: get Amex Blue Cash Preferred which carries a $75 annual fee but offers 6% on groceries, up to $6,000 in purchase a year, and unlimited 3% on gas and department stores. To maximize cashback, you will spend $6,000 a year on groceries and the extra cashback you earn beyond 2% is $6,000 x 4% - $75 = $165. We hate the annual spending cap but this is still the best grocery bonus cashback card out there.
- Dining and Entertainment (including Amazon): existing Citi Forward customers will continue to get unlimited 5x ThankYou points on dining and entertainment. Unfortunately the card has been discontinued for new applications.
- Airfare: get PenFed Travel Rewards Amex which offers 5x points on airfare.
- You may also consider Chase Freedom for quarterly rotating 5x categories (the quarterly spending cap for 5x categories is $1,500 thus the annual maximum extra cashback beyond 2% is $1,500 x 4 x 3% = $180) and US Bank Cash+ for two 5% categories you select from their list (the quarterly spending cap for 5% categories is $2,000 thus the annual maximum extra cashback beyond 2% is $2,000 x 4 x 3% = $240).
American Express Starwood Preferred Guest + Chase Sapphire Preferred
Amex SPG (annual fee $65) returns exactly one Starpoint per dollar spent and Starpoints are probably the single most valuable currency in the miles/points world due to the fact that they not only worth a lot when redeemed for SPG hotel stays but also can be transferred into around 30 airlines including American, US Airways, Delta, Alaska, Hawaiian, British, and so on at 1:1 ratio (and 1:1.25 if transferred in bulks of 20K). Many travelers value Starpoints more than 2 cents a piece (we value them at 2.25) and that is how they prefer this card over those high earning cashback cards.
Chase Sapphire Preferred (annual fee $95) is another mighty player in the miles/points arena for similar reasons. Generally Sapphire Preferred returns 1.07 Ultimate Rewards (UR) point per dollar spent - we value a UR point at 1.8 cents thus this card returns 1.93% value, a little less than 2% cashback cards. However, Sapphire Preferred also offers powerful bonus categories - 3.21 points on airfare through Chase and 2.14 points on travel and dining. What is more important, UR's transfer partners include United, Southwest, Korean Air, British, Hyatt, etc, many of which are not partners of SPG and this is exactly why this combo is so great! Another thing to note is that Sapphire Preferred has some better protections regarding Travel Accident, Travel Delay, Baggage Delay, Lost or Damaged Luggage, and Price Protection.
Obviously, you want to put SPG purchases on Amex SPG and travel (including airfare) and dining purchases on Sapphire Preferred. As for general spending, you won't really go wrong with either card. Assuming you want to collect both currencies, Amex SPG offers a better value over Sapphire in our case - 2.25% vs. 1.93%. However, when purchasing items that may have price drop within 90 days such as electronics, we will go with Sapphire Preferred for its Price Protection.
Chase Sapphire Preferred + Chase Freedom
As mentioned in the previous section, Sapphire Preferred is pretty big by itself if you value miles/points high enough. Adding Chase Freedom will give you more boosts in points due to its 5x bonus categories. Even though Chase Freedom is always branded as a cashback card, it actually earn UR points. Normally you won't be able to transfer UR points earned through Freedom to frequent flyer miles/points since it is considered a lower tier UR product, limiting the value of a point at 1 cent. However, the secret here is that if you have a premium UR card such as Sapphire Preferred, you can transfer the UR points earned from Freedom to Sapphire Preferred account so all of sudden these points become transferable to miles/points. This hugely increases value of Chase Freedom. For example, we value a "premium" UR point at 1.8 cent so once combined with Sapphire Preferred, Freedom returns 9% value for its quarterly rotating bonus categories! To maximize rewards, you need to remember to sign up each quarter for Freedom's bonus categories and use Freedom only for those categories, since for everything else, Sapphire Preferred offers a slightly better value over Freedom - 1.07x points vs. 1x points. The last thing to bear in mind is that there is a quarterly cap for 5x bonus category earning on Freedom - $1,500. So if you do everything exactly right, you will be earning 30,000 valuable UR points a year from Freedom by adding this non-fee card to your wallet!
American Express Premier Rewards Gold + American Express Mercedes-Benz Credit Card
Besides SPG and UR, Amex Membership Rewards (MR) is another program that allows points to be transferred into frequent flyer miles/points. Amex's partners (they include Delta, Hawaiian, British, Air Canada, ANA, etc.) are probably not as desirable as either SPG or UR after its non-intentional devaluation in 2011. However, since Amex still runs good transfer promotions (20-50%) often, we think this program is still competitive. Currently we value one MR point at 1.6 cents. Amex PR Gold is still the best Amex card to earn MR points. With a relative high annual fee of $175 a year, it counters with 3x airfare and 2x gas and grocery as well as a booster of 15K MR points after you spend $30K each year. So in order to maximize rewards, you need to spend exactly $30K on this card. The relative unknown Amex Mercedes-Benz Card which carries a $95 annual fee and offers 3x gas and 2x dining, is a great card to pair with PR Gold, since they both earn MR points which will be pooled together automatically and together they cover four bonus categories.
The strategy here is to put gas and dining (and of course Mercedes) purchases on Mercedes-Benz Card and everything else on PR Gold. For example, your annual total spending is $45K with $6K going to airfare, $6K to grocery, $7K to gas, and $8K to dining. You will earn 30K + 15K + 12K + 6K = 63K points from PR Gold and 15K + 14K + 8K = 37K points from Mercedes-Benz Card, a total of 100K points. Based on our 1.6 cents per point value, your total rewards are 100K x $1.6% - $175 - $95 = $1,330. By comparison, if you use Fidelity Amex + Citi Forward combo, you will earn $1,140 in cash back.
Citi Prestige World Elite MasterCard + Citi Forward
Citi Prestige, with a $450 annual fee, is marketed as an elite travel credit card that rivals Amex Platinum. However, while not matching Amex for several key features, Prestige shines in different areas. For one thing, if you can effectively use the $200 airline incidentals as well as the annual companion ticket for international economy class, this card more than pays itself and you will find it has the potential to be the most rewarding credit card due to Citi's unique "flight point matching", "annual relationship bonus" (up to 50%), and the newly enhanced redemption option (1.6 cents per point on American/US Airways flights). Our analysis shows once perfectly matched with flight points, it returns a minimum 3.28% for general spending and 4.96% for dining. The maximum return rate is 4% for general spending and 6.4% for dining. You can pair this card with a bonus category rewards card such as PenFed Visa, Citi Forward, Amex Blue Cash Preferred, or US Bank Cash+ (see details in the first section of this review). We know that Citi Forward has a duplicate bonus category here; however, we want to show how this combo can be potentially huge. Citi Forward (now only to the existing customers) returns 5x on dining and entertainment - normally meaning 5% rewards. However, once paired with Citi Prestige, all ThankYou points can be pooled together and redeemed for the air travel option that gives 33% or even 60% (on American / US Air) bonus in value. In this way, Forward returns up to 8% on dining which is 3% higher than dining bonus through Prestige. The most important fact is that Forward also returns up to 8% on entertainment which includes Amazon purchases - this can be crazily lucrative. A combo that gives you 8% for dining and Amazon plus at least 3.28% for everywhere else is hard to beat!
It sounds all fantastic, but we want to remind readers that to achieve this, "flight point matching" is the key and can be very difficult for most people. For example, if you annual spending is $50,000 on Prestige, you need to fly 50,000 miles (e.g. five round trips between San Francisco and Tokyo) a year and charge your flights to this card to achieve maximum rewards. For one thing, most people simply don't fly that much (50,000 miles put you among the mid-tier elites in most major U.S. airlines). For the other, most frequent flyers that do fly this much are business travelers and can't have their business flights charged to their own personal cards. However, even if you don't have the perfect matching, this combo can still be powerful. For example, let's say your annual spending on Prestige is $50,000 (with all dining and Amazon charged to Forward) and you are a Citigold client, then your relationship bonus is 20%. If you only have 25,000 miles of flights that you can take and charge to your card, your return rate for general spending is still 2.72%, beating all cashback or cashback equivalent competitors. And of course, dining and Amazon still return 8%.