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Today’s post comes from PDX Deals Guy who has previously written about using the Amex Fine Hotels & Resorts program in Las Vegas and Ticket Reselling. You can follow him on Twitter and look for the latest deals on his website.
Best Everyday Card Debate
The battle rages on all over the miles and points blogosphere regarding the “best one card” to have, either in a non-enthusiast’s wallet or for everyday non-bonus-category spending. While some argue for the Chase Sapphire Preferred (and others call it far overrated or worse!), the nearly undisputed king over the past few years has been the Barclay’s Arrival Plus.
Given the recent bad news from Barclay’s, however, it seems like now is as good of a time as any to re-open the debate. Now the Arrival Plus is still a solid contender, with effectively a 2.11% award earning rate to cover travel expenses. The standard offer of $422 worth of points for signing up for the card is very generous as well. But with a high annual fee of $89 (that most have found difficult to get waived or otherwise compensated for) and the new minimum threshold of $100 for redeeming travel reward benefits, a bit of luster has fallen off this former star.
Other 2% Options
Three of the other strongest contenders in the 2% back-on-everything space, are the Capital One Venture, the Citi Double Cash and the Fidelity® Investment Rewards® American Express® cards.
Capital One Venture
I have a soft spot for the Capital One Venture Rewards card. Besides being smitten with Jennifer Garner since her Alias days (!!!), this was also my first foray into the miles & points space, a few years before I got fully sucked in! Who could pass up on an over $1000 sign-up bonus?! The card pays 2% back on all purchases, in the form of erasing travel purchases, but carries a $59 annual fee after the first fee-free year (and comes with a $400 sign-up bonus).
I have found that Capital One will always waive the annual fee with a phone call request, but if they stop doing so in the future (as I use the card less), there’s always a downgrade option to the no-annual-fee VentureOne card.
Note: For those considering applying for this card, know that it is common for Capital One to pull credit from all three major credit bureaus.
Citi Double Cash & Fidelity® Investment Rewards® American Express® Card
Both the Citi Double Cash and the Fidelity® Investment Rewards® American Express® cards have NO annual fee and pay 2% back on all purchases. (Citi requires the balance be paid off on the Double Cash to get the 2nd 1%.) The one minor downside of these cards is a lack of a decent sign-up bonus. The Double Cash doesn’t have a bonus and the best you can do on the Fidelity card is $50. They are definitely still strong candidates as no-fee 2% cards, but you might be able to do better …
It is also timely and worth mentioning that the Discover it credit card is also effectively a no-fee 2% everyday spend for the first 12 months, if you sign up by September 30, 2015. This is because of Discover’s extremely generous ”Deal-Of-The-Year” Double Cashback promotion (also discussed on my humble little blog.) If you value the Discover Deals shopping portal (and you should!), then this is a really good deal you should strongly consider. You might also want to check out the full Miles to Memories review of the Discover It card.
While there’s a few moving parts and hurdles to get there, how does 2.625% back on everyday non-category spend sound? Even better, no annual fee and a nice little sign-up bonus! That’s what I’ve found in the BankAmericard Travel Rewards® credit card. But, again, unfortunately this won’t be an option for everyone.
I must give credit where credit is due for first coming across this option in a Doctor of Credit post back in January of this year. In that post, the good Doctor walked through a number of BofA credit card options, but the clear winner that stood out to me was the Travel Rewards card.
BofA Preferred Rewards Program
But to unlock the full value of the Travel Rewards card, one must first attain Platinum Honors status in the BofA Preferred Rewards program. While I encourage you to read more details about the program on BofA’s website, I’ll make two quick points:
1) To make the Travel Rewards card really worthwhile, you must qualify for the highest “Platinum Honors” level of status. To do that, the most likely route for most people will be to have $100,000 deposited in either a BofA bank account or Merrill Edge brokerage account. I would suggest for most people, the potentially easiest way to make this happen would be via an IRA (or rollover IRA from a 401k plan) account with Merrill Edge.
2) I agree with Doctor of Credit in his post that it is generally unwise to mix investment decisions and credit card decisions. That said, I find the Merrill Edge product offering to be compelling, especially when combined with the Platinum Honors status in the Preferred Rewards program. As the saying goes, consult your own investment advisor before making any decisions you’re not comfortable making on your own! The Platinum Honors status also brings with it some nice BofA checking account benefits, such as elimination of most standard fees (such as non-network ATM fees).
I also encourage you to check out Doctor of Credit’s website for the best available sign-up offers at any given point in time for opening new bank accounts with BofA and/or Merrill Edge.
All Hail the New King?
Okay, that might be going a bit far. But if you can qualify for the Platinum Honors status with BofA, it’s tough to beat the BankAmericard Travel Rewards card for non-category everyday spend. Why? Let us count the ways (benefits)!
- With the 75% earning bonus from the Platinum Honors status, the card earns 2.625% (1.5% x 1.75) on all purchases! And the amount of reward earnings is uncapped! (I’ll let you do your own math on what the extra 0.625% equates to over the 2% earned on the 2% cards previously mentioned.
- No annual fee. Ever. (Okay, ever is a long time. But at least for now.)
- A $200 sign-up bonus, after $500 in spending within the first 3 months of having the card open. Not huge, but many no-annual-fee cards do not have any sign-up bonus.
- No foreign transaction fees.
- Low $25 minimum threshold for applying reward earnings towards travel expenses (compared to the new $100 threshold on the Arrival Plus).
- No “hoops” to jump through, such as having to wait for half of the 2% upon payment of the card balance (Citi Double Cash) or waiting for a rebate (like the 5% rebate on the Arrival that takes its reward from 2% to 2.11%).
Be aware of the fact that it takes at least 3 full months to get Platinum Honors status with BofA. There’s really no way to speed it up (I tried!). Thus, you may want to wait to apply for the Travel Rewards card until you achieve the status (and, per the SlickDeals thread linked above, waiting may be beneficial). That way, the $500 initial minimum spending towards the sign-up bonus will earn 2.625% instead of just 1.5%.
Also, given that this is a no-annual-fee card that will undoubtedly be useful at 2.625%, it can be a great way to expand your relationship with BofA. And BofA has other nice credit card offerings, such as the Alaska Airlines Visa, so having a strong relationship with the bank cannot hurt.
While the BofA Travel Rewards card might not work as an option for everyone, it’s tough to argue that 2.625% isn’t great for a “one card in the wallet” or non-category/everyday spending. It is surprising to me that this card gets so little attention. I have been very happy with the card and it sits in the top slot of my wallet for non-category spending.
Does anyone else have similar or different experiences with the BofA Travel Rewards card?
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