For the past four or five years, the best credit cards to rack up rewards quickly have not exactly been conducive to current calls for social distancing. The best cards have been those that earn the best category bonuses: cards like the Chase Ink Cash (5x office supply stores), the Chase Freedom or Discover IT card (rotating 5x / 5% categories), the US Bank Altitude Reserve (3x mobile payments like Apple Pay or Google Pay) or the Chase Sapphire Reserve (3x travel & dining) have been some of the best cards to carry for day-to-day spend. But those category bonuses generally assume that you’re spending money in person. Given a desire for distance, which cards should be near the top of your wallet today?
Credit cards that bonus online purchases
While online shopping had long ago become part of the fabric of our lives, there is no doubt that it is also becoming the glue that keeps everything together right now. With all non-essential businesses in my home state of New York now closed for the foreseeable future to encourage social distancing, online shopping has become a go-to option for many.
The “best” card for online shopping is debatable, but these are cards worth consideration if you’re spending a lot of money online:
Bank of America Cash Rewards
The Bank of America Cash Rewards card earns 3% back on your choice of the following: gas, online shopping, dining, travel, drugstores, home improvement & furnishings (you can choose a new category monthly). The card also earns 2% back at grocery stores and wholesale clubs, but you won’t want to bring it out grocery shopping: you only earn the increased rates on the first $2500 in cumulative spending per quarter — counting spend in both 2% and 3% categories. You can do better than 2% at the grocery store, so don’t bother using up your $2500/mo bandwidth there.
This card really shines if you have Platinum Honors with Bank of America. That requires putting $100K on deposit with Bank of America (in cash or investments, including retirement accounts). If you’re able to do that, you get a 75% bonus on earnings on the Bank Of America (non co-brand) credit cards. Therefore, instead of 3% back, you’d earn 5.25% back on up to $2500 in purchases per quarter (as shown above). That’s $131.25 back per quarter if you max it out — not a bad return on a no-fee card. On top of the current welcome offer, that could make for a nice return for online spend.
We more or less called the Rakuten Visa dead to us a month ago when it stopped paying out the additional 3x for online gift card purchases, but if you have the card in your wallet already it may be ready for a resurgence.
They key benefit on this card is that it earns 3x on purchases made when clicking through the Rakuten shopping portal — which can be taken as Membership Rewards points instead of cash back. As we’ve pointed out in previous posts and podcasts, this isn’t quite as exciting as it sounds on the surface — that’s only 1x more than you could earn with the Blue Business Plus (which earns 2x on the first $50K in purchases per year, then 1x), and the Blue Business Plus earns that return whether or not you shop through Rakuten.
Still, with Rakuten occasionally offering the best payouts (and with increased payouts on “essentials” through at least the end of the month and maybe longer), you may already be shopping through Rakuten. In that case, 1x more adds up over time.
Also keep in mind that the Rakuten Visa is one of the relatively few cards that still offers price protection (up to $500 per claim, up to $2500 in claims per year). That could come in handy.
Affinity Cash Rewards
Last but not least, the king of Amazon might be the Affinity Cash Rewards card. This card offers 5% back at all bookstores, including Amazon.com. While the Amazon Prime Visa also offers 5% back at Amazon, it is issued by Chase and therefore subject to the 5/24 rule. The Affinity card does not require Prime membership and it also offers rotating bonus categories.
An interesting thing about the rotating categories on the Affinity Cash Rewards card is that they offer 5% on top of the normal card earning for the quarterly bonus categories. Since restaurants ordinarily earn 2% on this card and they are the 5% rotating category bonus through the end of March, that means this card has been earning 7% at restaurants. Q2 is gas (already a 2% category, so it will be 7% total) and Q4 will be bookstores (already a 5% category, so they should become 10% for Q4).
Credit cards with rotating categories
During certain quarters, cards with rotating 5x categories may offer bonuses for online shopping (or something like PayPal, which can be used to pay for online purchases in many cases). In other quarters, they may bonus grocery stores or gas stations. If you’ll already be visiting a grocery store or gas station, you may be able to load up on gift cards for websites where you shop. Additionally, some grocery store chains sell gift cards online without needing to visit the store at all.
Likely your best choices for rotating categories are the Chase Freedom and Discover IT.
Credit cards that bonus office supply stores (good for buying gift cards)
Similar to grocery stores and gas stations, office supply stores like Staples and Office Depot sell gift cards to many stores, so you may be able to eke out 5x / 5% on many of your current shopping needs via gift card purchases from office supply stores. While an unnecessary in-person stop at an office supply store might be inadvisable for you at the moment, keep in mind that Staples and Office Depot do sell third-party gift cards on their websites.
For office supply purchases, you’d want the Chase Ink Cash.
Chase Ink Cash
Credit cards that bonus groceries
With fewer meals out / business lunches / evening events, kids not eating lunch in school, and the difficulty of social distancing from the refrigerator when you’re working from home, I imagine that the bulk of spending for most of us has shifted to groceries.
If you’re looking to apply for a new card for grocery purchases, our Best Category Bonuses page shows that you should consider the Wells Fargo Rewards Visa or the Wells Fargo Visa Signature as either of those cards offer 5x on up to $12,500 in combined purchases for gas, grocery, and drugstore purchases for the first 6 months. That could equal up to 7.5% back on groceries depending on how you use the points.
However, if you’re looking for a long-term keeper, my top pick right now would be between two Amex cards.
Amex Blue Cash Preferred
This card has a $95 annual fee but offers 6% back on up to $6K in purchases per year at US Supermarkets (then 1%). Spending $115.39 per week every week (times 52 weeks per year) would max out the 6% category at $360 cash back. After accounting for the $95 annual fee, that’s still a net 4.42% back if you don’t spend in any other categories.
However, the card also offers 6% back on streaming services. In an era of social distancing, that could help mitigate the annual fee. The reason that I included this card over the Everyday Preferred card is because the Everyday Preferred requires 30 transactions per month to earn the best return, whereas the Blue Cash Everyday does not include that hoop through which to jump.
Amex Gold Card
The Amex Gold card offers a pretty compelling 4x at US Supermarkets on up to $25K in purchases per year (then 1x). That’s a great return if you do enough supermarket spend to exceed the caps on the Blue Cash Preferred or Everyday Preferred. The kicker is the higher annual fee.
However, I imagine that many people are now making use of the $10 monthly credit that can be used at Boxed.com or Seamless / GrubHub. While Boxed.com has been out of stock of some of the higher-demand home essentials recently, they still stock enough to potentially be useful (particularly if you can stack with an Amex Offer and/or good portal rate).
Depending on how highly you value those credits and how much you spend in the 4x categories, it may be your best bet even if you don’t make use of the $100 annual airline incidental credit.
Credit cards that offer useful credits
Noted above, the Amex Gold card offers both an airline incidental credit and a monthly $10 credit that can be used for food delivery from Seamless / GrubHub or for orders from Boxed.com. While airline incidental credits aren’t particularly useful for most of us at the time being, several other cards also offer other types of credits that could be useful to many at the moment.
Platinum Card from American Express
The Amex Platinum (various personal / consumer versions) offers a monthly Uber credit. That credit can be used toward UberEATs for those ordering delivery.
Chase Sapphire Reserve
While I wouldn’t recommend applying for the Chase Sapphire Reserve just for its DoorDash credit, it’s worth keeping in mind that the CSR is offering a $60 credit on DoorDash purchases this year and another $60 next year.
The Uber Visa offers a $50 subscriptions credit when you spend $5,000 in a year. This credit works on stuff like Netflix, Hulu, Amazon Prime, etc — but it only kicks in in year 2. Those who spent $5K on the card last year are likely happy with a $50 credit on subscriptions right now.
Credit cards good for everywhere else
Finally, there’s the “everywhere else” card. Your best bet for an everywhere else card is to see our Best Everywhere Else Rewards Card resource page. Still, my top two recommendations wouldn’t necessarily be the top two on that page. I’d go with either:
Bank of America Premium Rewards (with Platinum Honors)
If you have Platinum Honors with Bank of America, I think the Premium Rewards card is a strong contender despite not being at the top of the list on our everywhere else page. That’s because at 2.625% back everywhere without a cap or time limitation (assuming you have Platinum Honors), it makes the opportunity cost of collecting points on the other everywhere else cards feel high. If you choose to earn 2 Membership Rewards points per dollar or 2 Thank You points per dollar instead of 2.625% back, you’re giving up 1.3125 pennies for every point you earn. Are you a buyer of those points at that price? If you have a specific use in mind or are collecting for a high-value reward, you might be. But with future travel a bit up int he air, cash may be king for you.
However, if you’re confident that this too shall pass and life will return to normal, I think it becomes a tough call. The Discover IT Miles card essentially earns 3% back for the first year when used toward travel. Alternatively, the Blue Business Plus and Citi Double Cash each offer opportunities to earn points that can be even more valuable.
If I had to pick one everywhere else card and wanted flexibility, I’d probably go with the Double Cash.
Citi Double Cash
The reasons why I’d go with the Double Cash above the rest of the options are:
- The floor redemption is 2% cash back (1% when you buy and 1% when you pay the bill). That’s a good rate and it’s straight cash back that requires no other cards in your portfolio, no large amount on deposit with the bank, and no annual fees.
- If travel does resume to normal, this card can easily be paired with a Citi Premier or Prestige card to transfer to partners. With the Turkish Miles & Smiles sweet spots for flights on United and for travel to/from Europe, the Middle East, and parts of Africa, I think the ability to earn an uncapped 2x everywhere is strong (and of course there are other good transfer partners as well)
- It’s a Mastercard, which makes for wider acceptance (and means it can be used for more types of Plastiq payments and to earn points in places where Amex won’t).
Of course, there are a number of other cards on the Best Everywhere Else Rewards Card page that are also worth consideration.
My ideal quarantine wallet credit cards
Based on the above recommendations, this is my ideal wallet during this time:
- Bank of America Cash Rewards with Platinum Honors (5.25% online purchases on up to $2500 per quarter)(no annual fee)
- Amex Gold (4x US Supermarkets up to $25K per year, then 1x + useful $10 monthly credit that I’d use via Boxed right now. While I’m not currently ordering any takeout, I know many other folks are and 4x from restaurants is also compelling)($250 annual fee)
- Chase Ink Cash (5x office supply stores, to be used for buying gift cards for things like gas stations and streaming services at 5x if I run out of bandwidth on the Cash Rewards card)(no annual fee)
- Citi Double Cash (everywhere else)(no annual fee)
That 4-card solution would ensure that I’d earn 4x or better on most purchases from home and 2x on those that don’t fit the big categories. The single $250 annual fee should be mitigated by the earnings and benefits, but if that were a big put-off, the Blue Cash Preferred could be substituted for 6% back on up to $6K at US Supermarkets (then 1x) for a $95 annual fee.
If I wasn’t going to get Platinum Honors with Bank of America, I’d probably take a shot at the Affinity Credit Union Cash Rewards in place of the BOA Cash Rewards card for 5% back at Amazon (and maybe 10% back later this year along with 7% back at gas stations from April through June).
Whether you’re looking to rotate the best cards into your starting lineup while stuck at home for a while or you are looking to draft a new lineup altogether, you’ll likely need to make some adjustments over tried-and-true strategy to accommodate what I imagine is a significant shift in spend. The good news is that there are a lot of no-fee cards that could be strong components of a wallet balanced for social isolation — several of which don’t rely on this ending in a specific quarter for you to continue to earn well on spend. Since many of the options above carry no annual fee, they may be even more appealing given the current economic uncertainty. The good news is that you can still earn significant rewards from your couch while cutting back on costs as best you can.