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I have a lot of credit cards. A lot of them have annual fees, which I consider to be worthwhile given the perks they offer in return. However, there’s also a lot of value in holding onto some no annual fee cards long term. One big aspect of your credit score is your average age of accounts, and you can build that by holding onto some cards long term. Obviously it’s ideal to largely do that using cards that has no annual fee, since you can hold onto them for free.
At the moment I have three no annual fee credit cards, and they’re not just great to hold onto because they have no annual fee, but also because they offer incredible points earning potential.
Specifically, I have the following three no annual fee cards:
Here’s how I use each of them to maximize my points:
The Chase Freedom offers 5x points in rotating quarterly categories, on up to $1,500 worth of spend each quarter. For example, this quarter the card is offering 5x points on Ubers, which I am pretty close to maximizing. Next quarter they’re offering 5x points at grocery stores and drugstores, which I imagine many people won’t have any issue maximizing.
I know plenty of people earn 7,500 Ultimate Rewards points per quarter with this card, or up to 30,000 points per year. On top of that, we sometimes see even further bonuses.
This is an unbeatable card for everyday spend. The card offers 1.5x points on everyday spend, with no gimmicks. There’s no minimum number of purchases required in order to unlock that return, etc. I value Ultimate Rewards points at 1.7 cents each, so to me that’s a ~2.55% return on everyday spend. As a result, this is a card that offers the best return on non-bonused spend, along with The Amex EveryDay® Preferred Credit Card from American Express.
This card offers 5x points on the first $25,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services, plus 2x points on the first $25,000 spent annually at gas stations and restaurants.
This is the card I use for my cell phone bill and for office supply store purchases, where you can buy a surprising number of things. Earning a return of ~8.5% on those purchases is pretty tough to beat.
Unlocking these cards’ potential
On the surface the above cards are cash back cards, meaning that each point gets you a cent of value. However, in conjunction with a card accruing Ultimate Rewards points, those points can be converted at a 1:1 ratio.
Since I value Ultimate Rewards points at 1.7 cents each, that’s like getting 70% more value out of those cards just by having them in conjunction with another card. So you’ll want to have the above cards in conjunction with one of the following:
So 5% cashback converts into 5x Ultimate Rewards points per dollar with one of the above cards.
So you can potentially have the Freedom, Freedom Unlimited, and Ink Cash, and only pay an annual fee on a single one of the above cards. For example, the Sapphire Preferred and Ink Business Preferred have $95 annual fees, so you can unlock a lot of value out of four cards with a single $95 annual fee.
It really is tough to beat the value I get out of having the no annual fee Chase Freedom® Card, Chase Freedom® Unlimited, and Ink Business Cash℠ Credit Card. In conjunction with a card accruing Ultimate Rewards points, these are some of the best cards out there for maximizing everyday spend. If you’re considering applying for them, just keep in mind that they’re subjected to Chase’s “5/24 rule.”