This is part 2 of a multi-part series of “best credit card combos”. The goal is to find the combination of 2 or 3 credit cards that, together, offer the best rewards for day to day spend. The full series (not yet completed) will likely be as follows:
- Best credit card combos: Ultimate Rewards
- Best credit card combos: Membership Rewards
- Best credit card combos: ThankYou Rewards
- Best credit card combos: Mixed rewards
- Best credit card combos: Cash Back
I’ve written before about which one credit card is best for spend (found here). The options listed there are great for the person who wants to keep things simple. If you’re willing to juggle a few cards, though, you can do quite a bit better by using the right card for the right situation.
Note that it is always possible to earn more points through credit card signup offers. This post is not about that. This post is for those who prefer to get a few cards and stick with them over time.
I used my Credit Card Analysis Spreadsheet to estimate the number of points per dollar one could earn with various combinations of cards that earn Membership Rewards points. I also took into account the “cost per point” of using this combination of cards (and paying the annual fees, if any) by comparing to a no-fee 2% cash back card. In other words, annual fees plus the earnings you would have had with a 2% cash back card are accounted for as your “cost”.
I evaluated the following individual cards and card combinations:
- Amex EveryDay
- Amex Blue for Business
- Amex EveryDay Preferred
- Amex Premier Rewards Gold (PRG) based on new category bonuses and annual fees that take effect June 1 2015
- Amex Business Gold (with Gas selected as 3X category)
- Amex EveryDay Preferred + Amex PRG
- Amex PRG (as of June 1 2015) + Amex Blue for Business
In evaluating various combinations of cards, I made the following assumptions about spend:
- Total annual spend: $30,000
- Spend would be divided into the following categories:
- Travel: 15%
- Dining: 20%
- Gas: 15%
- Grocery: 25%
- Other bonus categories: 5%
- All other: 20%
- The cardholder would always use the card that earns the most at any given location.
- The cardholder would always maximize bonus earnings by making at least 20 purchases per billing cycle with the EveryDay card (20% bonus), or at least 30 purchases per billing cycle with the EveryDay Preferred card (50% bonus).
- While it is often possible to increase rewards by buying gift cards at a store that offers a category bonus, this analysis does not take that into account
|Card / Card Combo||Avg Points Per $||Annual Fee Total||Cost Per Point vs. 2% Card|
|Amex Blue for Business||1.3||$0||1.54|
|Amex EveryDay Preferred||2.33||$95||1.00|
|Amex Premier Rewards Gold, as of June 1 2015||1.75||Waived for the first year, then $195 (remember to consider the annual $100 airline baggage fee credit with your chosen airline. Terms apply.)||1.32|
|Amex Business Gold (with Gas selected as 3X category)||1.43||$175||1.81|
|Amex EveryDay Preferred + Amex PRG||2.56||First year is $95, ongoing annual fee is $290 (remember to consider the value of the annual $100 airline baggage fee credit with your chosen airline. Terms apply.)||1.03|
|Amex PRG (as of June 1 2015) + Amex Blue for Business||1.85||Waived for the first year, then $195 (remember to consider the value of the annual $100 airline baggage fee credit with your chosen airline. Terms apply.)||1.25|
As you can see in the table above, the combination that earns the most points per dollar (2.56), given my spend assumptions, is the EveryDay Preferred + Premier Rewards Gold (PRG). Even with annual fees taken into account, this combination does better on a cost per point basis (1.03 cents per point) than any other combo. That said, the EveryDay Preferred card does almost as well on its own with 2.33 points per dollar earnings and slightly better on a per point cost basis: 1 cent per point.
If you’re interested in doubling down on Membership Rewards cards, the first thing to do is to add your own spending assumptions to the Google Docs spreadsheet (make a copy first so that you can edit cells). If the results come out similar to those presented above, then I would recommend simplifying life with just the EveryDay Preferred card. Keep in mind, though, that to earn such high rewards with this card, you will need to make 30 or more purchases per statement cycle.
If you don’t mind juggling two cards and you highly value Membership Rewards points, then you’ll earn even more with the combination of the Premier Rewards Gold card for flights and restaurants, and the EveryDay Preferred for everything else.