What’s in My Wallet? (And Tips for Finding the Right Card for Yours)
This post contains some referral links. They are noted where included!
It can be incredibly intimidating to determine which credit card is right for you with the astounding number of rewards cards on the market. If I were to try to fit them all into 3 main categories, I’d bucket them accordingly - cash back rewards, travel rewards, and store specific rewards. The “right” answer will be different for everyone, because what’s valuable to one person may be totally useless for another. Since I don’t know what gets you up in the morning, this article is meant to be a peek inside my own wallet to give you the skinny on what I have, what I actually use, and why I opened them all.
Important: Before we dive into the glitz and glamour of credit card rewards, I want to caveat everything I’m about to say with - if you are not 100% confident in your ability to spend responsibly with a credit card, then get to steppin’. Travel rewards points will be of no use to you if you wind up up-to-your-eyeballs in debt with no funds to spend on vacation. This article may be a better place to start.
Okay - let’s dive in! We’re going in reverse order - least favorite to favorite, but they all have their merits for the right card holder.
#6 Citi Rewards+ (formerly ThankYou Preferred)
Annual Fee: $0
Ideal Holder: Students or 1st time credit card holders
2022 Opening Bonus: Earn 20,000 points after spending $1,500 in the first 3 months
Credit Score Recommended for Approval: 670 or higher
Top Benefits:
Points can be redeemed for gift cards, statement credits, or travel rewards, and you can shop with your points on Amazon.com and Best Buy.com
Automatically rounds up to the nearest 10 points on every purchase - i.e., a $2 coffee earns 10 points instead of just 2 points
Earn 2 points per $1 on groceries and gas
Get 10% points back when you redeem (100,000 point limit)
Earn 5 Points per $1 spent on air travel and hotel purchases ($6,000 limit) - rotating category
My two cents: This was the first credit card I ever opened when I was 18. At the time, it was labeled a “student” card, and my dad was a co-signer which helped increase my chances of getting approved. While points earned on this card can be redeemed in a variety of ways, they’re most valuable if you redeem them for statement credits or gift cards. If your main goal is to accrue points for travel or Amazon purchases - you’d be better off using different cards. Travel enthusiasts will accrue more points and redeem them at a higher value using a card like the Chase Sapphire Reserve (discussed below). Amazon loyalists, you’d be better off opening the Amazon Visa that gets you 5% back on Amazon purchases. I present these specific examples to show you different ways to compare cards so that you can find the one that benefits you most.
It’s been 12 years since I opened this card, and now I hardly ever use it, but I’m going to keep it open. Why? This is my oldest card, so it helps raise my credit age which contributes to a higher credit score. Plus, this card’s credit limit contributes to my overall credit limit to help keep my credit utilization percentage low, and since it doesn’t have an annual fee, there’s no downside to me keeping it open and stored safely in a drawer somewhere.
Because my parents taught me to treat credit cards like debit cards and the rewards offered were so minimal, this card served its purpose to help me responsibly build credit. I’m glad I started with this one, but I wouldn’t gravitate toward it today if I didn’t already have it open.
#5 Citi Double Cash
Annual Fee: $0
Ideal Holder: Students or 1st time credit card holders
2022 Opening Bonus: None
Credit Score Recommended for Approval: 740 or higher
Top Benefits:
Earn 2% cash back on every purchase — 1% when you buy, 1% when you pay.
(Note: Starting 3/28/22, instead of earning 2% back in the form of cash, you’ll now earn 2 ThankYou points per dollar spent and paid on all of your purchases. These points are valued at $0.008 each, but can be redeemed at a value of $0.01 each for gift cards or travel booked through Citi.)
Choose to receive your cash back as a statement credit, direct deposit, check; or convert to points that can be redeemed for gift cards, travel rewards, or Amazon purchases.
The card has no category limitations - everything earns 2% cash back.
My two cents: This was the second credit card I ever opened, and the 2% cash back on every purchase appealed to me because I had just started a full time job, I didn’t want to take on a card with an annual fee, and I liked that earnings could be redeemed in the form of cash. Unlike the previous card, you earn 2% back on all purchases, instead of just 1 point per dollar (with the exception of those categories like groceries and gas that were earning 2 points per dollar.)
I used this card exclusively when I was younger and was able to pay for several full credit card statements with the earnings! It’s not super exciting (no sign up bonus and the change in the benefit is a bit annoying), but it’s a good “starter” card if you’re looking for a way to slowly earn cash back on purchases that you routinely make. If I have to decide between this one and the Citi Rewards+ - I’m choosing the Double Cash every time.
#4 Target RedCard
Annual Fee: $0
Ideal Holder: Frequent Target Shoppers
2022 Opening Bonus: None
Credit Score Recommended for Approval: 640 or higher
Top Benefits:
Save 5% on all Target purchases (both in-store and online, including gift cards and any in-store Starbucks purchases)
Free 2-day shipping on most Target.com orders
An additional 30 days for returns and exchanges
My two cents: Bryan and I used to live within walking distance of a Target and went weekly, but even after we moved we still shop there frequently for household staples, the occasional last minute groceries, and the entirety of their home decor department. If you’re a frequent Target shopper like me, then this card may appeal to you. If you’re not, skip this card because it is of no value to you outside of Target - see the note below.
The app only shows me data for the last three years, but over that time period I’ve saved between $80 and $95 annually using this card. The free 2-day shipping is huge, because with the 5% off, Target can beat Amazon prices and get you the products in the same amount of time. I don’t return things to Target often, but if you’re forgetful when it comes to returns, the extra 30 day return window could be wildly helpful. With the exception of maybe the Amazon credit card, this is the only store specific credit card that I, personally, would ever consider opening because I’m confident in the recurring annual value.
Note: There are 3 types of Target cards - Target debit card, Target RedCard Credit Card (what I have), and Target RedCard Mastercard. The first two can only be used in Target stores, and while the Mastercard can be used elsewhere, I wouldn’t recommend it. You will realize so much more value using a general rewards card outside of Target than you would the RedCard.
#3 Southwest Premier (Recently closed — I can explain.)
Annual Fee: $99
Ideal Holder: Frequent traveler with access to Southwest flights
Recommended Credit Score for Approval: 690 or higher
2022 Opening Bonus: Earn Companion Pass through 2/28/2023 and 30,000 points after you spend $5,000 on purchases in the first 3 months
This. Is. HUGE! Companion Pass allows a named friend or family member to travel with you for free for a year. (You only have to pay taxes, ~$11 per flight.) I had to hack my way to a Companion Pass many years ago, which I’ll explain in a minute, but if you were thinking about opening a Southwest card - NOW is the time!
Top 5 Benefits:
Receive 6,000 points on your account anniversary
Earn 3x points on every $1 spent on Southwest purchases (2x points on money spent with Rapid Rewards partners, and 1x points on everything else)
2 Free Early Bird Check Ins each year (great for Southwest which has no assigned seating!)
Earn 1,500 points for every $10,000 you spend — no limitations
Earn 2 points per $1 spent on internet, cable, phone services, and select streaming services
My two cents: I strategically opened this card and the Southwest Plus card simultaneously. Each card came with a 50,000 point sign up bonus which allowed me to earn 100,000 points after spending $6,000 in purchases within the first 3 months. Why would I do that? Opening both cards at the same time allowed me to get the Companion Pass quickly without having to take 100 qualifying flights and without having to organically earn 110,000 points! Huzzah! Since we live in Dallas (the Southwest hub in the US), this perk was insanely valuable to us.
(At the time I opened both cards, you could earn a Companion Pass with 110,000 points vs. the 125,000 points required today.)
The Priority card didn’t exist at the time I opened the Plus and Premier cards. When it hit the market, Southwest offered all existing cardholders bonus points if they upgraded one of their existing cards to the Priority, so I opted to upgrade my Plus card.
The Premier card was the best of the Southwest cards offered when I was on my Companion Pass pursuit; however, I recently closed this card because it carried a $99 annual fee, and the Priority card offered all of the same benefits PLUS SOME. There was no sense in me paying for two almost identical cards.
I wanted to call this out, because I just told you that I’m keeping the Citi Rewards+ card open even though I never use it. The difference here is that I was losing $99 each year on this card since I never maximized the card’s benefits, and the Rewards+ card has no annual fee. Closing the Premier card also didn’t hurt my credit age, because I opened the Plus at the same time, remember? When I upgraded the Plus card, the open date didn’t change - only the tier of the card changed. While there was no impact to my average credit age, I did see a slight decline in my overall credit limit. (…which wasn’t a big deal, since I never spend more than 10% of my overall credit limit at any given time.)
#2 Southwest Priority
Annual Fee: $149
Ideal Holder: Frequent traveler with access to Southwest flights
2022 Opening Bonus: Earn Companion Pass through 2/28/2023 plus 30,000 points after you spend $5,000 in the first 3 months
Recommended Credit Score for Approval: 690 or higher
Top 5 Benefits:
$75 Southwest Annual Travel Credit
Receive 7,500 points on your account anniversary
Get 4 Upgraded Boardings every year when available
Earn 25% back on all in-flight purchases
PLUS: All of the same benefits of the Southwest Premier card
My two cents: If you’re contemplating opening a Southwest card at all, odds are you typically fly Southwest at least one time annually. Since it’s pretty hard to find round trip flights for less than $75, you’re basically guaranteed to earn that travel credit if you book 1 round trip flight per year. By subtracting the $75 travel credit from the $149 annual fee, it takes the cost of this card down from $149 to $74 — just $5 more than the Premier card. You also receive an additional 1,500 points per year just for being a cardholder, so opening the Priority card over any other Southwest card is a no brainer. I can’t recommend this card enough if you’re a Southwest loyalist!
If you live in a city where another airline is prominent, look into their card offerings instead of Southwest’s. If you live in Seattle, an Alaska Airlines card may make more sense. Atlanta? Check out what Delta has to offer. Chicago? United Airlines may be the play. Dallas? You could also consider American Airlines! The point is - credit cards aren’t one size fits all, so you have to choose cards that will add the most value to your lifestyle.
Sign Up Notes: If you’re interested in applying for this credit card, you can do so through my referral link. There is no additional cost to you—you earn 30,000 points plus Companion Pass, and I get 20,000 points for spreading the word about the card. Every card holder has the ability to earn these points! This post isn’t sponsored or anything - just wanted to throw it out there if I’m the first person to tell you about this card.
#1 Chase Sapphire Reserve
We’ve made it to my #1! I wrote an entire love letter to the Chase Sapphire Reserve in this article, so I recommend diving into that for an extensive outline of the card’s benefits and to learn how I’ve earned thousands of dollars on this card each year since opening it. (Like last year when we saved $2,800 on a single vacation!)
Annual Fee: $550
Ideal Holder: Avid domestic and international travelers OR one-luxe-trip-per-year travelers
2022 Opening Bonus: Earn 50,000 points after you spend $4,000 within the first 3 months
Recommended Credit Score for Approval: 750 or higher
Top 5 Benefits - read here for all benefits:
$300 travel credit
Luxury Hotel Collection Benefits (think free breakfast, resort credits, upgrades, etc.)
5x points on travel booked through Chase
3x points on other travel and all dining
Free 1:1 point transfers to travel partners
My two cents: The value I receive from this card each year is worth well over the annual fee. If you can afford the initial outlay of $550 and take at least one luxurious trip per year (or many “regular” trips per year), this may be a card to consider. Beyond the insane point earning potential, you also get a free Priority Pass Membership for airport lounge access, reimbursement for TSA PreCheck or Global Entry, no foreign transaction fees, and so much more.
BUT, there’s been a lot of chatter lately about this card’s little brother - The Chase Sapphire Preferred. It has a much lower annual fee ($95 vs. $550), but it provides fewer benefits and point redemption value compared to the Reserve. From the research I’ve done, the Reserve out performs the Preferred in all categories except for Annual Fee, points earned on online grocery purchases, and points earned on select streaming services. (Right now, the Preferred is offering a 60,000 point sign up bonus compared to the Reserve’s 50,000, but the value of those points is identical, since the value of Reserve points is higher ($0.015) than the Preferred ($0.0125.) Article to come soon on making sense of these point valuations!
I’ve been really happy with the Reserve, but depending on your existing spending habits and interests, the American Express Platinum card (the Reserve’s biggest competitor) could be more beneficial. There are a few benefits that the AMEX provides that aren’t available on the Reserve and vice versa, but most of the benefits are similar, and the annual fee on the Reserve is lower - $550 for the Reserve vs. $695 for the AMEX Platinum. You’d need to crunch some numbers to ensure you’d get at least the cost of the annual fee back in utilized benefits on either card before you apply. (Spoiler alert: The value that these cards provide will easily cover the annual fees, but it’s way easier to maximize your earnings on one of these souped up cards at a time, so we’re sticking with the Reserve for now.)
I think it’s also worth noting that the Chase Sapphire Reserve card is a Visa, which is more widely accepted than AMEX across the board. While AMEX is gradually being accepted most everywhere, Costco isn’t one of those places. Since we usually spend a fair amount there annually, we’d be forfeiting the earning potential on those purchases if we switched to the AMEX. (I realize this is kind of minor, and a Costco specific card is available, but I just wanted to throw it out there!)
Quick Tip: Bryan has the Preferred card, which was strategic on our part since I was already a Reserve cardholder. If you’re married and plan to jointly benefit from your rewards cards, think strategically and only pay annual fees as necessary!
WAIT! Before you apply for one of these cards - let’s go over a few things:
There are a LOT of things to consider when opening a credit card - your current credit score, your earnings goals, your discretionary income, and your timing.
Credit Score: Research the cards that interest you and the necessary credit scores required to be approved. If your credit score is fair or good, go for the cards with no (or low) annual fees that provide moderate rewards. A cash back card with no annual fee is a great way to build credit and earn money on purchases you regularly make. Plus, opening a new account will increase your overall account quantity AND your overall credit limit, and paying off your card in full each month will help build a healthy payment history. For those with good or excellent credit scores, look for a card with benefits that will outweigh hefty annual fees.
Earnings Goals: If the benefits of the Reserve card sound amazing but you rarely ever travel, switch your focus to cash rewards or brand specific cards. If you apply for and are approved for a card with killer benefits that you’ll never fully utilize, the card could end up costing you more than benefiting you.
Discretionary Income: If you apply for a card with an attractive sign-up bonus and can’t feasibly spend what’s required to earn the rewards, it may not be the right fit for you right now. Look for cards with no annual fees or minimum spending requirements if your discretionary income is low and you need to start building credit. It’s important to never spend more than you would normally just to earn rewards points. It will not be worth it, I promise! Wait until you can do so responsibly — these cards aren’t going anywhere.
Timing: Because applying for a credit card requires hard inquiries, you want to limit the number of cards you apply for at one time. Hard inquiries could cause your score to dip a few points in the short term, which isn’t a huge deal for most people unless you’re relying on your score to secure you a home loan within the same week or something. Some companies, like Chase, even have specific rules in place to limit the number of cards you’re eligible to open within a specific timeframe. All this to say - be strategic!
You deserve some credit for making it to the end - kudos!