Best Credit Card with Cash Back Rewards

Oblio

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Citi launched a new card called the Custom Cash and it's...surprisingly good.

5% on your top spending category, up to $500/mo, 1% back on all others, $200 SUB, no AF.

Basically kills the BCE and BCP if you use it for grocery, and it also puts some pressure on the US Bank Cash+ by having categories that are broader and less finicky. Other possible categories for 5% are Restaurants, Gas Stations, Select Travel, Select Transit, Select Streaming Services, Drugstores, Home Improvement Stores, Fitness Clubs and Live Entertainment.
Sounds like a better version of their Costco Card.
 

swayze22

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Sounds like a better version of their Costco Card.
If I'm reading it correctly, it's up to the first $500 spent in the top category per statement.... so $25 in cash back max at 5%. Everything else is 1%. If you spend $1,000 in your top category then it's $30 in rewards ($25+$5) per $1,000 or only 3%, not that great. It get's worse if you spend more consistently which pending on your earning there are much better choices. Why would I get that over the BCP?

I would imagine if you have any sort of budget you can maximize that more than ~3%, and probably get a higher ROR for all of the other categories making that even weaker.

I am younger-ish and have a family so I have the Capital One Savor - dining,entertainment,streaming all at 4%, and groceries at 3%. I do also have the chase freedom unlimited which I gave to my wife for general stuff at 1.5% for everything.
 
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sleevedraw

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If I'm reading it correctly, it's up to the first $500 spent in the top category per statement.... so $25 in cash back max at 5%. Everything else is 1%. If you spend $1,000 in your top category then it's $30 in rewards ($25+$5) per $1,000 or only 3%, not that great. It get's worse if you spend more consistently which pending on your earning there are much better choices. Why would I get that over the BCP?

I would imagine if you have any sort of budget you can maximize that more than ~3%, and probably get a higher ROR for all of the other categories making that even weaker.

I am younger-ish and have a family so I have the Capital One Savor - dining,entertainment,streaming all at 4%, and groceries at 3%. I do also have the chase freedom unlimited which I gave to my wife for general stuff at 1.5% for everything.

The purpose of the card is not as a One Card To Rule Them All, it's to optimize on one category of spending. As always, if you are looking for a One Card to Rule Them All, get a high-yield flat cash card like the Alliant Signature and don't look back. This card is for intermediate to advanced players who are heavily into categorizing purchases based on location. For me, I use BofA Red for online purchases, Ink Cash for cell phone/internet/office store purchases, Chase Freedom and Discover for overflow if the 5% categories are useful, BCP for supermarkets and gas, and BofA Silver for flat cash if I can't get bonused spend anywhere else. Effectively I get 5%+ back on pretty much every purchase I make outside of the things that are effectively impossible to get bonused spend on like insurance and medical bills (I get 2.62% on those.)

As for "Why would you get it over the BCP?", very simple: (1) the BCP's AF eats up a significant amount of the cashback savings (if you perfectly optimize it and spend exactly $6000, your effective cashback rate is something like 4.5%; any amount over/under this lowers the effective rate), (2) the BCP is capped just like the Custom Cash ($500/mo equates to the $6000/year in 6% supermarket spending that you would get on the BCP), and (3) Amex is incredibly finicky on their definition of "supermarkets" to get the enhanced cash back, while Citi is more permissive ("groceries" includes meat stores, dairies, bakeries, etc.)

You can very easily see that the Custom Cash stays ahead of the BCP for all amounts of spend under $6000 by plotting y=0.05x against y=0.06x - 95 on a graphing calculator.

Screenshot 2021-12-14 142647 - Copy.png
 
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Oblio

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If I'm reading it correctly, it's up to the first $500 spent in the top category per statement.... so $25 in cash back max at 5%. Everything else is 1%. If you spend $1,000 in your top category then it's $30 in rewards ($25+$5) per $1,000 or only 3%, not that great. It get's worse if you spend more consistently which pending on your earning there are much better choices. Why would I get that over the BCP?

I would imagine if you have any sort of budget you can maximize that more than ~3%, and probably get a higher ROR for all of the other categories making that even weaker.

I am younger-ish and have a family so I have the Capital One Savor - dining,entertainment,streaming all at 4%, and groceries at 3%. I do also have the chase freedom unlimited which I gave to my wife for general stuff at 1.5% for everything.
I guess my first glance was wrong. I use my Costco card for everything. Between my Citi Costco and my My Executive Costco Membership I get thousands back every year. I would guess the Capitol One Card is slightly better $dollar for dollar, however, I cannot use it at Costco so it really isn't.
 

Haus

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Don't know if I posted this one but...

My primary card to use credit wise is an Amazon Visa from Chase.
Lowest interest rate of any card my wife or I have.
5% cash back on all Amazon purchases - Unlimited cap (for us this is a healthy bit)
2% cash back on gas
1% on everything else

No caps on any of it.
 
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Oblio

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Don't know if I posted this one but...

My primary card to use credit wise is an Amazon Visa from Chase.
Lowest interest rate of any card my wife or I have.
5% cash back on all Amazon purchases - Unlimited cap (for us this is a healthy bit)
2% cash back on gas
1% on everything else

No caps on any of it.
Shit maybe I should get one of those for all my amazon purchases.
 

Haus

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Shit maybe I should get one of those for all my amazon purchases.
Yeah, my wife's book habit has made us long term O.G. Amazon Prime members anyways, and it's our go to for impulse buying. So this is easily a choice set up for us.
1639526424592.png

The only thing they could do to amp it up in my opinion would be make it also cover our yearly Amazon Prime.
 
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Sanrith Descartes

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Don't know if I posted this one but...

My primary card to use credit wise is an Amazon Visa from Chase.
Lowest interest rate of any card my wife or I have.
5% cash back on all Amazon purchases - Unlimited cap (for us this is a healthy bit)
2% cash back on gas
1% on everything else

No caps on any of it.
Lowest Interest rate? Why is this a thing? Do you carry a balance?
 
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Haus

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Lowest Interest rate? Why is this a thing? Do you carry a balance?
Only rarely, but on those times when I have to, it costs a little less.

At one point in the past we had some exceptional medical expenses and such pile up, which resulted in carrying debt for a bit. That was when I learned the ancient art of juggling card balances to pay off higher rates first and lower rates last.... So in my budget spreadsheet there's still a column for the interest rate on each.
 
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Sanrith Descartes

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Only rarely, but on those times when I have to, it costs a little less.

At one point in the past we had some exceptional medical expenses and such pile up, which resulted in carrying debt for a bit. That was when I learned the ancient art of juggling card balances to pay off higher rates first and lower rates last.... So in my budget spreadsheet there's still a column for the interest rate on each.
I'm lazy as shit. I have my Amex blue cash 1.5% cash back that I use for everything. I'm just not into juggling cards for a specific purpose (dining, travel etc).
 

Haus

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I'm lazy as shit. I have my Amex blue cash 1.5% cash back that I use for everything. I'm just not into juggling cards for a specific purpose (dining, travel etc).
Oh, I don't juggle cards for purchases to try to game the cash back system... Amazon prime card has lowest rate for when I need to carry a balance, 2% back on gas, 5% back on amazon, etc. I use it for day to day use, and pay it off each month.

The others sit there, until around once every year or two I get mail saying "We're cancelling this account if you don't use it". At which point I go charge something on it, pay it off, then forget about it until the next mail. I'd just close them, but there are advantages apparently to always having a lot of open credit limit, and NONE of them have any yearly fees.
 

Sanrith Descartes

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Oh, I don't juggle cards for purchases to try to game the cash back system... Amazon prime card has lowest rate for when I need to carry a balance, 2% back on gas, 5% back on amazon, etc. I use it for day to day use, and pay it off each month.

The others sit there, until around once every year or two I get mail saying "We're cancelling this account if you don't use it". At which point I go charge something on it, pay it off, then forget about it until the next mail. I'd just close them, but there are advantages apparently to always having a lot of open credit limit, and NONE of them have any yearly fees.
I have never gotten one of those emails. I have cards I haven't used in 10+ years sitting in the safe.
 
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Haus

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I have never gotten one of those emails. I have cards I haven't used in 10+ years sitting in the safe.
Last one I got one of those on was a very basic Capital One card Mrs. Haus Mrs. Haus has had forever....

Charged a tank of gas, then paid it off the next day. Got another mail (actual paper mail) saying "thanks for charging something.. all good"
 

Falstaff

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I have had a Capital One card since college with a $500 credit limit that I haven't used in over 15 years and I've never got one of those letters.
 

Keystone

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I'm lazy as shit. I have my Amex blue cash 1.5% cash back that I use for everything. I'm just not into juggling cards for a specific purpose (dining, travel etc).
Same- I used to juggle cards and do all the signon bonus stuff but got lazy and have just been using fidelity card lately. Straight 2% back on everything as long as you dump it into a fidelity account.

though I admit I’ve been flirting with the idea of cycling through all the chase card sign bonuses again since it’s been a while, think I can cancel mine so them all for wife then next year redo them for myself, should be like 5k or more and essentially a freee trip.
 
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swayze22

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The purpose of the card is not as a One Card To Rule Them All, it's to optimize on one category of spending. As always, if you are looking for a One Card to Rule Them All, get a high-yield flat cash card like the Alliant Signature and don't look back. This card is for intermediate to advanced players who are heavily into categorizing purchases based on location. For me, I use BofA Red for online purchases, Ink Cash for cell phone/internet/office store purchases, Chase Freedom and Discover for overflow if the 5% categories are useful, BCP for supermarkets and gas, and BofA Silver for flat cash if I can't get bonused spend anywhere else. Effectively I get 5%+ back on pretty much every purchase I make outside of the things that are effectively impossible to get bonused spend on like insurance and medical bills (I get 2.62% on those.)

As for "Why would you get it over the BCP?", very simple: (1) the BCP's AF eats up a significant amount of the cashback savings (if you perfectly optimize it and spend exactly $6000, your effective cashback rate is something like 4.5%; any amount over/under this lowers the effective rate), (2) the BCP is capped just like the Custom Cash ($500/mo equates to the $6000/year in 6% supermarket spending that you would get on the BCP), and (3) Amex is incredibly finicky on their definition of "supermarkets" to get the enhanced cash back, while Citi is more permissive ("groceries" includes meat stores, dairies, bakeries, etc.)

You can very easily see that the Custom Cash stays ahead of the BCP for all amounts of spend under $6000 by plotting y=0.05x against y=0.06x - 95 on a graphing calculator.

View attachment 387790
Yes I'm not quite at the level of specific cards for every silo yet. For me it has been what hits the "bulk" of my expenses which the Savor does with almost 4% for 75%+ of my expenses and that's nice because its easy with one card and i'm lazy. I outspend the caps so I need to double up.

I was looking at the cash blue ink and the savor gives me 4% (compared to 5%) for phone/internet/cable and we have two cells unlimited data + gigabit fiber + tv so missing 1% (or +25%) there on a few hundred bucks a month. May be worth looking at and using only for that, and the +$750 initial spending bonus would be nice.

We are at ~$1,500 grocery/food/dining a month. So that's either 3% or 4%. I guess I need another card to use when I hit cap?

Maybe I'll get the Amex BCP and use it up to the cap at $6,000 @6% for the groceries and then the Savor. I would also get 6% on streaming (currently *3%), and 3% on gas (currently 1%), so those would be bonuses also. The initial spend bonus of +$300 is solid also.

I do want to look into the Amazon card to use for those purchases at 5% because that's a pretty hefty expense of ours as well, and we only get 1% or 1.5% currently.

That's either 1,2, or 3 new cards though, yikes!
 
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sleevedraw

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Yes I'm not quite at the level of specific cards for every silo yet. For me it has been what hits the "bulk" of my expenses which the Savor does with almost 4% for 75%+ of my expenses and that's nice because its easy with one card and i'm lazy. I outspend the caps so I need to double up.

I was looking at the cash blue ink and the savor gives me 4% (compared to 5%) for phone/internet/cable and we have two cells unlimited data + gigabit fiber + tv so missing 1% (or +25%) there on a few hundred bucks a month. May be worth looking at and using only for that, and the +$750 initial spending bonus would be nice.

We are at ~$1,500 grocery/food/dining a month. So that's either 3% or 4%. I guess I need another card to use when I hit cap?

Maybe I'll get the Amex BCP and use it up to the cap at $6,000 @6% for the groceries and then the Savor. I would also get 6% on streaming (currently *3%), and 3% on gas (currently 1%), so those would be bonuses also. The initial spend bonus of +$300 is solid also.

I do want to look into the Amazon card to use for those purchases at 5% because that's a pretty hefty expense of ours as well, and we only get 1% or 1.5% currently.

That's either 1,2, or 3 new cards though, yikes!

Old Blue Cash (1% on first $6500 of purchases, then 5% on groceries and gas up to $50k) would have been great for you, but unfortunately it's closed to new applications. Savor sounds like it's a good fit for you because it has no cap unlike the BCP or Custom Cash; I probably wouldn't open up a BCP just to get an extra effective 0.5% cash back over the Savor, although if you want to open it up to mine the sign-up bonus and then shut it down/downgrade it after a year, that's an option. Amex Gold could also be a good choice because it's also uncapped (4x on groceries), but you have to be interested in travel, because Amex points are a pain in the ass unless you like to micromanage.

Gas is a category that I don't really feel the need to get a dedicated card for because (a) a lot of people think they spend more on it than they actually do, although you know your exact situation better than me, and (b) a lot of gas stations like Shell have programs like S Pay that let you direct debit for 10 cents/gal, which is about as good as a 3% CB card at current market value. That said, if you do commute a lot:
  • the Costco Visa and Sam's Club Mastercard get 4% / 5% on gas respectively, if you happen to be a warehouse club member
  • the Custom Cash also lets you pick Gas Stations instead of Grocery as your 5% category if you want, so it can also act as a dedicated gas card. This would mean you have to only open up one new card, and then you have a setup that gets 4% on groceries/dining (minus the annual fee) and 5% on gas.
    • Another option with Citi would be the Citi Premier, which only gets 3x on grocery/gas/dining, but comes with a juicy $800 sign up bonus. You could then do a strategic downgrade to a Custom Cash after one year if your goal is just to have long-term cards to hold onto instead of actively playing the churning game like I do.
  • Penfed Platinum Rewards gets 5x points on gas and 3x on groceries, although the points are only valued at about .85 cents per point, so the effective yield on gas is more like 4.25%.
Streaming is similar to gas; most people don't spend enough on it to justify having a dedicated card set up just for streaming spend. Even for people that do spend a lot on it, there are ways (buying Spotify or Apple gift cards at grocery stores/gas stations/warehouse clubs) to get around not having a dedicated card for it. Again, though, you know your habits better than I do.
 
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Fadaar

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Yeah, my wife's book habit has made us long term O.G. Amazon Prime members anyways, and it's our go to for impulse buying. So this is easily a choice set up for us.
View attachment 387823
The only thing they could do to amp it up in my opinion would be make it also cover our yearly Amazon Prime.

Had that card for years now. Usually end up with a few hundred bucks in credit each year which I save for a rainy day/emergency purchase.
 

joz123

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I have the Amex blue cash everyday and the Citi double cash. 3% back from grocery stores with Amex otherwise Citi for 2% back on anything. I hardly ever use them since I use my debit for mortgage/bills and I don't spend a ton on eating out or buying things. I end up just using my points/credit toward CC statement.
 

swayze22

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I have the Amex blue cash everyday and the Citi double cash. 3% back from grocery stores with Amex otherwise Citi for 2% back on anything. I hardly ever use them since I use my debit for mortgage/bills and I don't spend a ton on eating out or buying things. I end up just using my points/credit toward CC statement.
Unless it's spending/earning for travel or you are churning for the rewards/sign ups for different cards then yeah the goal is to just save (make) a few extra % every year.