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If you’ve been involved with credit card points and miles, then you know that most people gravitate toward Chase and American Express. It makes sense too! These programs offer a lot of flexibility and value, especially for travelers who aren’t locked into a specific travel brand. That means that the same cards often get featured in many posts/videos, including on our site and channel, though that doesn’t mean that there aren’t other cards that deserve to be in your wallet. So in this post/video, I’m going to review my top underrated credit cards for 2020.
Not everyone needs to build a flexible points program
I love Chase Ultimate Rewards points, so it’s no surprise that our content is often geared toward Chase credit cards. For me, Chase’s points have been extremely useful and lucrative. That’s why I prefer them over other valuable point currencies like American Express’s Membership Rewards. Everyone’s lifestyle and spending patterns are different, so there’s no single perfect card set-up. Though there are cards that often get overlooked due to our focus on flexible points programs. These are cards that often come up during my card consultations too, so I thought I would share what I consider my top five underrated credit cards at the moment.
My top 5 underrated credit cards for 2020
1. American Express Blue Cash Preferred:
If you’re into Chase points, then you know that Chase does not have a card with a strong bonus category in groceries. They have the Chase Freedom that usually has one quarter with a grocery bonus. But otherwise, there isn’t a card in their lineup that offers a consistent grocery spend bonus.
This is where a card like the American Express Blue Cash Preferred comes in handy. I’ve had this card in the past, and I’m considering product changing one of my American Express cards back to it. I know many in this hobby aren’t interested in cashback, but if you spend a significant amount on groceries every month, you should consider this card. The card earns 6% on US supermarkets and streaming services, and 3% on US gas stations and transit services like taxis, rideshare, parking, tolls, trains, and buses. You also get several benefits associated with American Express like their lucrative shopping offers and Shoprunner membership. I think American Express has the best offers program when compared to its competitors, and I love how you can combine them with other shopping portals.
Beware of grocery spending limits
The only catch with this card is that the grocery bonus is capped at $6,000 of spending per year. If you’re someone who spends more than $6,000 a year in groceries, then you’re probably better off going with the American Express Gold Card. Though if you’re someone who had a Gold card but canceled it after the first year, the Blue Cash Preferred might be a great primary card for grocery purchases.
Deciding between the Amex Blue Cash Everyday and Blue Cash Preferred
The Blue Cash Preferred does have an annual fee of $95. There is a no-annual-fee version called the Blue Cash Everyday, which earns 3% on US supermarkets and 2% on US gas stations and department stores.
If you’re wondering what the breakeven point is for these two cards, I did some quick calculations. Basing it solely on grocery spend, the breakeven point is $264 per month or $3,167 per year. If you spend more than that in the grocery category, then you’re negating the annual fee by opting for the Blue Cash Preferred over the Everyday card. If you spend less than that, then you’re better off going with the no-annual-fee Everyday card. And if you’re a little over $6,000 a year, you could also supplement your spending with a rotating bonus cashback card like the Chase Freedom.
If you spend way more than $6,000 per year on groceries, i.e., $500+ per month, then you should consider the American Express Gold. It has a yearly award cap of $25,000 in spending. And, if you’re dead set on earning points over cashback but don’t feel like the American Express Gold card is a good fit, then there are two versions of this card that earn points called the American Express Everyday and Everyday Preferred.
2. Capital One® Venture® Rewards:
I often encounter folks who want to earn rewards toward travel but don’t want to have to deal with the complexity of a flexible points program. While many of us love to geek out on searching for the best rewards, some of us just want a simpler approach. This is where a card like the Capital One® Venture® Rewards comes in handy.
A simple approach to earning travel rewards
The Capital One® Venture® Rewards is a card that earns a flat rate of 2% on all purchases. You can then apply your earned reward toward your travel purchases using their purchase eraser tool. They also have travel partners where you can transfer points similar to the flexible points programs like those from Chase, American Express, and Citi. The card has no foreign transaction fees, so you can use it abroad without paying extra fees. It even includes a $100 credit for Global Entry or TSA PreCheck. The card has a $95 annual fee, which is waived the first year. It also has a 50,000 points welcome offer, which is worth $500.
This is a great card for those looking for a more simple set-up. It can also be a great card to complement a flexible points program, especially when it comes to offsetting the cost of other travel expenses like Airbnbs, independent hotels, and tours.
Why pick the Capital One® Venture® Rewards over other 2% cashback cards?
Some of you might be asking, “Why not just get a Citi Double Cash card instead since it doesn’t have an annual fee?” It’s a valid question, and the Citi Double Cash or other 2% cashback card might be a better fit for some people. However, keep in mind that you’re getting a better welcome offer with the Capital One® Venture® Rewards card, as well as some of the travel perks like the Global Entry credit and no foreign transaction fees.
What if I don’t want to keep the card past the first year?
You can product change the card after the first year to their no-annual-fee Capital One® VentureOne® Rewards card if you want to retain your points without paying the annual fee. It makes it a very compelling card to consider since you’re getting so much value in the first year of card membership, especially when you consider that you don’t pay an annual fee the first year.
3. US Bank Cash+:
I cover the US Bank Cash+ card every quarter during our rotating bonus category post/video. It’s similar to the Chase Freedom with its rotating bonus categories. The big difference is that you get to pick your 5% and 2% categories every quarter, and you’ll earn the 5% bonus on up to $2,000 of your spending per quarter on the combined selected bonus categories. The Chase Freedom, for example, only earns 5% on up to $1,500 of spending per quarter. And the US Bank Cash+ has some unique bonus categories like fitness centers and home utilities. The card has no annual fee and comes with a $150 welcome offer (as of January 2020).
I think this card can easily generate value for most people. For example, I use the card to earn a bonus on my gym membership and utility bills. These are reoccurring expenses, so it’s easy for me to earn over $100 every year by using this card without even thinking about it.
Getting approval with US Bank
The only catch with this card is that US Bank is picky when it comes to getting an approval. There are many reports online that US Bank is a relationship bank, so they prefer to give approvals to those who have done business with them in the past. This includes those who have a banking relationship with them. I personally don’t have a checking or savings account with them, but I did have a previous card with them, so that must have helped me when I got this card. It’s just something to keep in mind if you are looking to get this card and perhaps have a short credit history.
4. Citi Costco Anywhere:
This is a card that I’ve considered getting and may still get since I am spending more at Costco. The Costco Anywhere card does require a Costco membership but doesn’t have an annual fee. The card earns 4% cashback on gas purchases, including at Costco Gas, for the first $7,000 per year. It also earns 3% on restaurant and travel purchases and 2% on in-store and online purchases at Costco. Everything else earns 1%.
Travel purchases on this card include airfare, hotels, car rentals, travel agencies, cruise lines, and Costco Travel. Citi says that timeshares, campgrounds, bed and breakfasts, and train and commuter travel do not earn the 3%. However, the card does not have any foreign transaction fees, so you can use it overseas without paying extra.
I think this is a great card to have, especially if you spend a lot on Costco purchases and gas. My only gripe with this card is that the cashback bonus is awarded once per year on your February billing statement, and you need to redeem it at Costco. You can also get it in cash, but it still requires you to go to Costco in order to redeem it. Most cashback cards allow you to redeem throughout the year, so it’s something to keep in mind if you’re considering this card.
5. Chase Ink Business Cash:
This is a business card, so not everyone will be able to get it. However, whether you are someone who collects Chase Ultimate Rewards points or not, this card is a powerhouse. This card easily earns me 1,000 points every month with my normal spending. That’s because it earns 5%/5X on office supplies, internet, cable, and phone services. It also earns 2%/2X for fuel and dining out charges.
5%/5X at office supply stores is extremely useful
The 5%/5X on office supplies is more useful than it might seem. That’s because office supply stores have a lot of useful items and valuable services. For example, you can buy stamps and gift cards or even ship packages there, which all qualify for the 5%/5X bonus. Also, you could combine the card with a shopping portal to earn additional cashback and points on top of the bonus category.
Combining the card with a premium Chase
The card has no annual fee and is marketed as a business cashback card. However, like the Chase Freedom card, you’ll earn points that can be redeemed for cashback at one cent per point but is even more valuable if you combine with a premium Chase card since you’ll get a higher redemption rate on the Chase Ultimate Rewards portal. Premium cards like the Chase Sapphire Preferred, Sapphire Reserve, or Ink Business Preferred also allow you to transfer your points to travel partners, which is often more valuable.
This card often gets overlooked because most people are drawn to the Chase Ink Business Preferred since it has a higher welcome offer. However, for long-term use, I think the Ink Business Cash is a more valuable card. The welcome offer included with the card is also very competitive.
What do you think of these cards? Are there other underrated cards that you would add to the list? Let me know in the comment section below.
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