Best credit card combos: Mixed rewards

Credit Card CombosThis is part 4 of a multi-part series of “best credit card combos”. The goal is to find the combination of 2, 3, or maybe 4 credit cards that, together, offer the best rewards for day to day spend. The series, so far, is as follows:

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.

Best so far

So far, I’ve looked at combinations of cards that all earn points within the same programs.  For review, here are the combinations that came out on top, based on spending assumptions found in my Credit Card Analysis Spreadsheet.  The “cost per point” is calculated by comparing to a no-fee 2% cash back card.  In other words, annual fees plus the earnings one would have had with a 2% cash back card are accounted for as the “cost”.

Rewards Program Card / Card Combo Avg Points Per $ Annual Fee Total Cost Per Point vs. 2% Card
Chase Ultimate Rewards Freedom + Ink Cash 2.01 $0 0.99
Chase Ultimate Rewards Freedom + Sapphire Preferred + Ink Cash 2.16 $95 1.07
Amex Membership Rewards EveryDay Preferred + Premier Rewards Gold 2.56 $190 ($290 minus $100 airline fee credit) 1.03
Amex Membership Rewards EveryDay Preferred 2.33 $95 1.00
Citi ThankYou ThankYou Premier 1.85 $95 1.25
Citi ThankYou AT&T Access More + ThankYou Preferred 1.90 $95 1.22
Citi ThankYou AT&T Access More + ThankYou Premier 2.23 $190 1.18

 

Analysis

For this analysis, I wanted to look at what would happen if we combined cards from different rewards programs.  Could we assemble a combination of cards, across programs, that significantly beats out the within-program options shown above?

To answer this question, I started with strongest individual point earning cards, which also allow transfers to loyalty programs:

  • EveryDay Preferred (With 30 purchases per billing cycle: 4.5X grocery – up to $6K spend; 3X gas; 1.5X everywhere else)
  • Ink Plus (5X office supplies, cellular, landline, cable; 2X gas and hotels)
  • ThankYou Premier (3X travel and gas; 2X dining and entertainment)

I looked at every combination of the above three cards.  I also took each combination that included the Ink Plus card and added in the Chase Freedom card to see if it significantly boosted point earnings.  The reason I only did this for combinations that include the Ink Plus card is that the Freedom card, on its own, is unable to transfer points to airline and hotel programs.  I’ll look at the Freedom card on its own in a future installment where I look at combinations of cash back cards.

There are several strong point earning cards that I did not model here because their earning structure overlaps with other cards that are already accounted for. These include:

  • Amex Premier Rewards Gold: Other than this card’s 2X grocery bonus, the Citi ThankYou Premier card has equal or better bonus earnings.
  • Chase Sapphire Preferred: The Citi ThankYou Premier card has better travel and dining earnings.
  • Chase Ink Cash: This card has almost identical point earning options to the Ink Plus card, but it does not on its own allow transfers to loyalty programs.
  • Citi Prestige: The Citi ThankYou Premier card has broader 3X categories and identical 2X categories.
  • Citi AT&T Access More: This one may have been worth modeling except that a big part of its strength comes from the 10,000 bonus points earned with $10K annual spend. When looking at combinations of cards in which the cardholder always uses the card with the best category bonus for any given situation, my models didn’t result in this card earning the 10,000 point bonus.

Assumptions

In evaluating various combinations of cards, I made the following assumptions about spend:

  1. Total annual spend: $30,000
  2. Spend would be divided into the following categories:
    • Travel: 15%
    • Dining: 20%
    • Gas: 15%
    • Grocery: 25%
    • Other bonus categories: 5%
    • All other: 20%
  3. The cardholder would always use the card that earns the most at any given location.
  4. The cardholder would always maximize bonus earnings by making at least 30 purchases per billing cycle with the EveryDay Preferred card (50% bonus).
  5. Chase Freedom 5X bonus categories are based on the 2015 Freedom 5X calendar
  6. 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.

For this analysis, I’m also assuming that the cardholder values Membership Rewards, Ultimate Rewards, and ThankYou Rewards equally.  In reality, each program has different strengths and weaknesses.  See: Membership Rewards vs. Ultimate Rewards vs. ThankYou Rewards. Which is best?

Results

Here are the point earning profiles of each of the individual cards used in this analysis, based on assumptions found in my Credit Card Analysis Spreadsheet:

Rewards Program Card / Card Combo Avg Points Per $ Annual Fee Total Cost Per Point vs. 2% Card
Amex Membership Rewards EveryDay Preferred 2.33 $95 1.00
Citi ThankYou ThankYou Premier 1.85 $95 1.25
Chase Ultimate Rewards Ink Plus 1.39 $95 1.67
Chase Ultimate Rewards Freedom 1.60 $0 1.25

And, here are the profiles of the combinations of cards (not including the Freedom card):

Card / Card Combo Avg Points Per $ Annual Fee Total Cost Per Point vs. 2% Card
EveryDay Preferred + ThankYou Premier 2.65 $190 0.99
EveryDay Preferred + Ink Plus 2.51 $190 1.05
ThankYou Premier + Ink Plus 2.00 $190 1.32
EveryDay Preferred + ThankYou Premier + Ink Plus 2.83 $285 1.04

And, here are the combinations with the Chase Freedom card included. Note that I did not add the Freedom card to any combination that did not already include the Ink Plus card since the Freedom card, on its own, does not have the ability to transfer points to loyalty programs.

Card / Card Combo Avg Points Per $ Annual Fee Total Cost Per Point vs. 2% Card
EveryDay Preferred + Ink Plus + Freedom 2.94 $190 0.90
ThankYou Premier + Ink Plus + Freedom 2.43 $190 1.09
EveryDay Preferred + ThankYou Premier + Ink Plus + Freedom 3.23 $285 0.91

From the tables above, we can identify the best combinations (based on assumptions given above):

# Cards Card / Card Combo Avg Points Per $ Annual Fee Total Cost Per Point vs. 2% Card Which to use, where
1 EveryDay Preferred 2.33 $95 1.00 Use EveryDay Preferred for all spend
2 Amex EveryDay Preferred + Citi ThankYou Premier 2.65 $190 0.99 Use ThankYou Premier for travel, dining, and entertainment.
Use EveryDay Preferred everywhere else.
3 EveryDay Preferred + Ink Plus + Freedom 2.94 $190 0.90 Use Freedom for its rotating 5X categories.
Use Ink Plus for 5X office supplies, cellular, landline, cable; and 2X hotels.
Use EveryDay Preferred everywhere else.
4 EveryDay Preferred + ThankYou Premier + Ink Plus + Freedom 3.23 $285 0.91 Use Freedom for its rotating 5X categories;
Use Ink Plus for 5X office supplies, cellular, landline, cable.
Use ThankYou Premier for travel, dining, and entertainment.
Use EveryDay Preferred everywhere else.

As you can see in the table above, the more cards you are willing to juggle, the more points per dollar you can earn.  The 4 card combination, in this scenario, averages a whopping 3.23 points per dollar!. Even with annual fees taken into account, this combination does about the same on a cost per point basis as the best 3 card combo (.91 vs. .90 cents per point).  That said, its important to identify your comfort level with juggling cards and annual fees.  I expect that many would be happier to settle for the best single car or the best card duo.

Substitutions

Prestige instead of Premier: I’ve written often about my fondness for the Citi Prestige card, but it’s not shown here. The reason is simply that the Premier card has a lower annual fee and broader 3X category bonuses.  The Prestige’s category bonuses are very similar to the Premier’s with one minor difference and one major difference.  The minor difference is that the Premier card offers 3X for all travel whereas the Prestige limits 3X to airlines, hotels, and travel agencies.  I consider this a minor difference since, in my experience, the vast majority of my travel spend is within those three categories.  The major difference between the two is that the Premier card offers 3X at gas stations whereas the Prestige offers only 1X.  Despite that, you can substitute the Prestige card for the Premier card into any combination shown above that includes the EveryDay Preferred card.  The EveryDay Preferred card also earns 3X at gas stations once you calculate the card’s 50% per billing cycle bonus.  And, despite the Prestige card’s high annual fee ($350 or $450 depending upon a couple of factors), I believe the Prestige card is a better value for most people thanks to its great benefits ($250 airline credit; AA and Priority Pass lounge access; 1.6 cents value towards AA flights; 4th Night Free hotel benefit; etc.).

Ink Cash instead of Ink Plus: The no fee Ink Cash card offers almost the exact same category bonuses as the Ink Plus. The one difference is that the Ink Plus offers 2X at hotels, whereas the Ink Cash offers 2X at restaurants.  Also, the Ink Cash is limited to $25K annual spend within 5X categories, and the Ink Plus allows up to $50K of 5X spend.  The primary downside of swapping in the Ink Cash is that you would lose the ability to transfer points to loyalty programs and you would lose the ability to pay for travel with points at a rate of 1.25 cents per point.  If you have a spouse or significant other, though, with a premium Ultimate Rewards card (such as the Ink Plus or Sapphire Preferred), you can transfer points to that account and then transfer them to loyalty programs or use them to purchase travel.

Forward for dining, bookstores, etc.: If you are lucky enough to have the no-longer-available Citi Forward card which offers 5X at restaurants, bookstores, and a few other miscellaneous categories (record stores, movies, etc.), then you should definitely use that card for its 5X categories.  As long as you also have the Citi Premier or Prestige card, your ThankYou points will pool together and can be used for greater value.

Recommendations

If your goal is to maximize points & miles earnings, then your best bet is to regularly signup for the best credit card offers.  If you’d rather stick with a few cards long-term, then it makes sense to look for the cards that offer the most bang for your buck.  In this series, so far, I’ve looked only at transferable points programs (points that can be transferred to airline and hotel programs).  If you’re like me and you prefer transferable points over cash back, then the results presented above and in previous installments should interest you.  First, though, you should 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 the next step would be to decide how many cards you’re willing to juggle.  Use the table above to pick out the ideal combination of cards for your needs.

Also consider your approach to collecting points and miles.  Is your strategy opportunistic hoarding or earning and burning? One problem with collecting mixed rewards is that you may end up not having enough points within one program for the redemptions you want.  For example, of the programs considered here, only Ultimate Rewards transfers to United and only Membership Rewards transfers to Delta (to give just two examples).  If you collect points from multiple programs, you might not be able to book an ideal trip for your whole family because you’ve spread your point earnings too thin.  On the other hand, earning points in multiple programs gives you more flexibility.  Assuming you’ve earned enough points in all 3 programs, you’ll have the flexibility to pick the best available reward for almost any given situation.

If your strategy is to earn and burn, then pick a program and stick with that (and use the earlier posts in this series to find the right combination of cards for you).  If you’re an opportunistic hoarder (like me), then mix rewards as shown above.

See also: Membership Rewards vs. Ultimate Rewards vs. ThankYou Rewards. Which is best?

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. Because more and more of us are moving to flexible points as US-based carriers move to rev-based earn and in the case of DL, ticket-priced based awards, I’m more concerned than ever about programs that transfer to airlines that are likely to continue to offer traditional mileage based int’l premium cabin awards and reasonable availability.

    I think most of us expect even AA to eventually align their award charts with DL/UA, which are clearly headed toward pricing awards based on ticket cost. I have no interest in accumulating SkyMiles moving forward and I have similar concerns about UA and AA in 2016 or 2017.

    The landscape is evolving so quickly that it’s hard to develop a strategy that isn’t in continual need of revision.

    But I do think if you’re not manufacturing a lot of spend or issuing reams of new cards, even with 100K of annual credit card spend, focusing on more than one program seems ill-advised as the returns are just too paltry year to year.

  2. You make a lot of assumptions above, and I love your analysis. However, I’m curious as to which card you recommend for non-bonus spend. Based on nearly every blogger’s “valuations” of various points currencies, I’ve been putting all of my non-bonus spend on my SPG card. Which card was used for all 1x spend doesn’t change any of your calculations, right?

    • That’s not right. The EveryDay Preferred card offers 1.5 points per dollar for non-bonus spend, so that’s a factor in all combos that include that card. That said, 1X SPG is pretty darn good (thanks to the 1 to 1.25 transfer ratio to miles) so I think its a reasonable way to go if you prefer SPG points and/or SPG transfer partners not available from Membership Rewards

  3. Great analysis if you are simply looking at maximizing points for the sake of points. However you fail to point out that MR transfer partners are few and pitiful. A card combo based on the Everday Preferred Card will not serve one well. Until Amex can retrieve many of its former MR transfer partners, much better to stick with the UR ecosystem possibly in combo with SPG Amex. The new Freedom card offering should be viewed in that light.

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