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Reader Vishal asked the following question on the “Ask Lucky” page of the blog:
I am moving into a new place which accepts credit cards (no extra fee). Hence, I expect to put in as much as $50K on credit card annually. Which card would be the best to put it on? I hold predominantly most credit cards recommended by you. Would appreciate your views.
I’m jealous of a place that accepts rent payment via credit card without a fee. The place I used to live had a flat fee for paying by credit card, so I’d simply pay rent for a few months at a time. That made the numbers work out in my favor.
Since presumably rent doesn’t fall under some sort of other “bonus” category, you’ll want to pick a card that maximizes your rewards on non-bonused spend. The other big question here is whether they accept American Express cards or not. In my experience most places that accept credit cards for rent limit you to Visa/MasterCard.
With that in mind, assuming they don’t accept American Express, here are the two cards I would be considering:
Sign-up bonus: 40,000 miles after spending $3,000 within 90 days
Annual fee: $89, waived the first year
Earnings rates: Two miles per dollar spent, plus a 10% refund when you redeem miles. Each mile is worth one cent, meaning you’re basically earning 2.22% cash back towards the cost of travel
This is in my opinion the best cashback travel credit card out there, given that you’re essentially earning 2.22% cashback towards travel. You earn two miles per dollar (each mile being worth a cent), plus a 10% refund for your redemptions, for a total of 2.22% cashback.
You can redeem that cashback towards almost any travel purchase, including airlines, travel agencies & tour operators, hotels & resorts, cruise lines, trains, or car rentals.
This is especially valuable for someone mostly looking to redeem miles for domestic or international economy travel, since you can still earn miles and points for the purchases you get reimbursed with the card. Or even if you redeem your miles for premium cabin travel, it’s great for offsetting fuel surcharges.
Sign-up bonus: 50,000 points after the first purchase, 35,000 additional points after spending $2,500 within 90 days
Annual fee: $75
Earnings rates: Five Gold Points per dollar spent (Ten Gold Points per dollar spent at Club Carlson properties)
One of the unique features of this card is that you get 40,000 points on your account anniversary each year, which arguably more than offsets the $75 annual fee. So while the annual fee on the above card is waived for the first year, it’s a card where it can still make sense to pay the fee year after year.
Club Carlson did announce an award chart devaluation a few months back, but even so I find that Gold Points are still worth roughly 0.4 cents each. Given that you earn five points per dollar, that’s the equivalent of roughly a 2% return.
But the greatest benefit of this card which must be factored in is that the second night of every award redemption is free, basically meaning you get “buy one get one free” award redemptions, assuming you stay in two night increments. If you don’t mind staying in hotels in two night increments you’re basically getting a return of 4%, which is tough to beat.
Meanwhile if they do accept American Express, here are two more cards I would be considering:
Sign-up bonus: 10,000 Starpoints after the first purchase, 15,000 additional Starpoints after spending $5,000 within six months
Annual fee: $0 introductory annual fee for the first year, then $65
Earnings rates: One Starpoint per dollar spent (two Starpoints per dollar spent at Starwood properties)
Starpoints are one of the most versatile points currencies out there, and can efficiently be redeemed for both hotel stays and airline mileage transfers.
Starpoints can be converted into airline miles in over two dozen programs at a 1:1 ratio, with a 5,000 point bonus for every 20,000 Starpoints transferred. That basically means you’re earning 1.25 airline miles per dollar spent. As a result I value Starpoints at about 2.2 cents each, which seems fair given how many amazing uses there are of them.
Sign-up bonus: 15,000 Membership Rewards points after spending $1,000 within three months
Annual fee: $95
Earnings rates: 1.5 Membership Rewards points per dollar spent
Unintentionally the Amex EveryDay Preferred Card may have cannibalized the American Express Premier Rewards Gold Card as the best card for earning Membership Rewards points. If you make at least 30 transactions on the card per month you earn 1.5 Membership Rewards points per dollar spent. And that doesn’t even account for the triple points on groceries and double points on gas (not that this is relevant when paying rent).
The above are some of the cards that I consider to offer a return of over 2% on everyday spend. Some offer that pretty concretely, like the Barclaycard Arrival Plus™ World Elite MasterCard®, which offers you 2.22% towards travel. Others like the Club Carlson Premier Rewards Visa Signature® Card can offer a return of roughly 2%, or nearly double that if you maximize your redemptions.
Just my two cents…