I currently have the Citibank Cash Returns credit card that I am using for any purchase where I am able to use a credit card. The reason for this? The card offers a 5% cash back rebate on all charges for the first 3 months of card membership. I have another month and a half before the cash back rebate returns to the measly 1% cash rebate. Once the bonus cash back period is over, I am considering switching to another cash back credit card to use as my primary credit card. I currently have 3 other cards that offer a cash back feature. Unfortunately, they all only offer 1%.

How do I decide which one I will use as my primary rewards credit card? I made an informal list on paper and finally decided on which one I will use.

The three cards I considered and the highlights of each:

Citi Dividend Card. This card has a credit limit of $15,100 and offers a 1% cash back bonus. The card has a cash back bonus limit of $300 per year. You can only request a check once you have reached $50 in rewards which is the equivalent of spending $5000.

Bank of America Cash Returns Card. This card has a limit of $10,000 and also offers a 1% cash bonus. There is no limit to the amount of cash rewards but like the Citi Dividend card, you must reach $50 in rewards before you can request a check.

American Express One. This card has no preset limit and offers a 1% cash back bonus. The difference between this card and the other two is that whatever bonus you earn, the amount is automatically credit to a savings account with American Express Bank. The card does carry a $50 annual fee. This card was my choice until I remembered the annual fee. I like that the amount is credited to a savings account each month and I don't have to wait until the balance is $50 to redeem the rewards. The only thing about this card that I don't like is the annual fee. Due to the annual fee, I will actually cancel this credit card. To make up the difference for the monthly fee, I would need to spend at least $5000 annually before I break even (not including the savings account interest). I do not spend nearly this much on my credit cards and I do not plan to spend more just to get a few extra dollars in rewards.

After looking at all the above, I think I will actually make the Citi Cash Rewards card my primary credit card for my everyday purchases. The limit is only $5400 so I will need to consolidate the credit limit from my 2 other Citibank credit cards. For any business related purchases for my rental property, I will continue to use my Discover Business Card. My Discover Business Card offers a 5% cashback bonus on office supplies, 2% bonus on gas and 1% on all other purchases.

What card do you use for your everyday purchases?

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  1. Noel Larson // February 12, 2008 at 8:13 PM  

    Goes without saying, but for most it is a dangerous game. One missed payment and you eat the return!

    The other piece that I would recommend is calland see if they will extend the bonus time, or tell them you will consider closing the account :)

  2. Anonymous // February 12, 2008 at 8:19 PM  

    I have the Citi Professional which gives me 3 points for each dollar I spend on gas, resturants, office supplies and car rentals. One point for all other eligible purchases. I like this card because it's tied to the ThankYou points which I can redeem for cash towards my student loans, beginning at 5K points=$50.00

    I also have the Chase Rewards Plus Visa, which gives me 5 points for each dollar I spend on gas, grocery and drugs. One point for all other eligible purchses. I think my yearly max is $7500. This program I understand has been canceled for new applicants but until they convert me, I still receive the 5 points per 1 dollar in the g/g/d categories. Points can be redeemed for cash also, beginning at 6K points=$25. However, I prefer to redeem these points for GCs.

    These are my favorite rewards cards and the ones I use the most.

  3. Anonymous // February 12, 2008 at 11:23 PM  

    I use the Chase Freedom Rewards Visa...3% on your top three areas & 1% everything else. Save $200 in rewards & they pay you $250 (that's a $50 bonus).

    Here is a link that provides a $100 bonus for using the card.


  4. Anonymous // February 13, 2008 at 12:16 AM  

    Blimey! It's amazing how many people buy-into "reward" cards.

    Study after study after study shows that people who use credit cards spend an average minimum of 18% more on their purchases. I guess you're still getting that "sweet" reward rate, but you're buying into their game, literally. You think you're winning, but you're not, which is why their building is bigger than your house. They know consumer spending habits, which is why your sweet "deal" just results in you spending more money and acquiring more debt. You pay it off at the end of the month? That's good, but you still spend more just by using it. Don't believe me? Google the studies. Ditch the cards and pay cash or use a debit card. If you REALLY need a card to use at the gas pump or some other reason, get a debit card that gives you rebates for using it.

  5. Anonymous // February 14, 2008 at 3:53 PM  

    I use the Amex SkyMiles card. I travel a lot so using FF miles (vs paying cash) is more cost-effective than getting cash back.

  6. Anonymous // February 25, 2008 at 11:37 PM  

    I'm not interested in suggesting that anyone follow my path, but I cut up my credit cards and paid them all off. I've never had more financial peace. I'm also within 3 years of paying off my mortgage. So, three years from now, I will be completely debt free (as long as nothing unexpected happens, like job loss, etc.). I'm having a great time pushing the envelope and eliminating expenses. I even cancelled my cell phone and got a 15 cent-per-minute pre-paid phone. I'm almost always either at work or home, so I didn't use the cell phone much anyway. This is saving me about $70/month that I can now use to help pay off my mortgage. I'm also building a sizable cash reserve (emergency fund). It's great fun.
    Again, this may not be for everyone, but I'm enjoying life more than ever now that I don't focus on having the latest and greatest gadgets and other JUNK.