Best Cash Back Cards and How to Earn up to 20% Back on Everything

Summary

Podcast Summary: All the Hacks with Chris Hutchins
Episode: Best Cash Back Cards and How to Earn up to 20% Back on Everything
Release Date: February 12, 2025

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Introduction to Maximizing Cash Back

[00:02] Host Chris Hutchins opens the episode by highlighting the abundance of credit cards available for maximizing rewards across various spending categories. He teases that the discussion will focus on top single cash back cards that surpass the standard 2% return, including some offering up to 4% back on all spending. Hutchins also hints at an innovative strategy to earn up to 13% or more back, setting the stage for a comprehensive dive into cash back optimization.

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Top Cash Back Cards Reviewed

1. U.S. Bank Smartly Visa Signature Card

[02:30] The U.S. Bank Smartly Visa Signature card stands out as a versatile option, offering up to 4.4% cash back based on the amount you maintain in your U.S. Bank accounts. Hutchins is particularly impressed, stating, “If you transfer $100,000, you get 4.4% back on everything,” emphasizing the card’s exceptional return rate.

Pros:

• High Cash Back Rates: Up to 4.4% on all purchases with higher account balances.
• No Annual Fee: Makes it accessible without ongoing costs.

Cons:

• Limited Premium Benefits: Lacks features like travel insurance and rental car coverage.
• Foreign Transaction Fees: Incurs a 3% fee on overseas purchases.
• Credit Limit Cap: Typically capped at $15,000, which might not suffice for high spenders.

Hutchins notes the sustainability of such high cash back rates, saying, “I have no idea how long this will last,” but reports positive user experiences with consistent rewards without transaction declines.

2. U.S. Bank Altitude Reserve Card

[11:45] Although not a pure cash back card, the Altitude Reserve offers 3x points on travel and mobile wallet spending. Hutchins explains, “This card is effectively a 4.5% cash back card on all mobile wallet and travel purchases,” due to the “Real Time Rewards” feature.

Pros:

• Flexible Points Redemption: Earns more on travel and mobile wallet transactions.
• Comprehensive Travel Benefits: Includes airport lounge access, travel insurance, and Global Entry credit.

Cons:

• High Annual Fee: $400, which might offset the benefits for some users.

Hutchins concludes that while the card offers impressive rewards in specific categories, the U.S. Bank Smartly card remains the more straightforward choice for overall cash back.

3. Robinhood Gold Card

[18:05] The Robinhood Gold card offers a flat 3% cash back on all purchases, appealing to those who prefer simplicity without the need to transfer large funds.

Pros:

• Competitive Cash Back Rate: 3% on every purchase.
• No Foreign Transaction Fees: Beneficial for international spending.

Cons:

• Annual Fee Dependency: The 3% rate is contingent upon having a Robinhood Gold account, which costs $60 annually.
• Restricted Eligible Purchases: Certain transactions like precious metals and business-related spending are excluded, potentially limiting rewards for some users.

Hutchins advises that the Robinhood Gold card is a solid alternative for individuals who can’t meet the U.S. Bank Smartly card’s high balance requirements.

4. Discover IT Miles Card

[22:14] An unexpected contender, the Discover IT Miles card initially offers 2x miles on all purchases for the first year, effectively providing a 3% cash back rate.

Pros:

• No Annual Fee: Accessible without additional costs.
• No Foreign Transaction Fees: Makes it suitable for international use.
• Easy Approval: Users report being able to obtain multiple cards over time.

Cons:

• Limited High Earnings Duration: The enhanced 2x miles rate is only for the first year.
• Potential Spending Restrictions: Certain high-value purchases may not qualify for rewards.

Hutchins highlights the card’s temporary boost, noting, “it might not actually be worth it from that perspective,” but acknowledges its value as a supplementary option.

5. Bank of America Preferred Rewards Cards

[25:39] Bank of America offers a suite of cards that become more rewarding as you ascend their Preferred Rewards tiers, which are based on your total balance across accounts.

Pros:

• Tiered Rewards Multipliers: Up to 50% boost on points, translating to higher cash back rates.
• Diverse Card Options: Includes Unlimited Cash, Travel Rewards, and business versions.
• Sign-Up Bonuses: Attractive bonuses like $200 or 20,000 points.

Cons:

• Complex Qualification: Requires maintaining significant balances to achieve higher tiers.
• Higher Annual Fees: Premium cards like the Premium Rewards Elite carry fees that might offset benefits for some users.

Hutchins recommends Bank of America cards mainly for those needing high credit limits or business-focused rewards, stating, “if you're spending more than $15,000 a month, then that US bank smartly card can't keep up.”

6. Alliant Credit Union Visa Signature Card

[35:13] The Alliant Credit Union Visa Signature card offers a straightforward 2.5% cash back on all purchases, though it requires meeting specific banking criteria.

Pros:

• Consistent Cash Back Rate: 2.5% on all spending up to $10,000 per billing cycle.
• No Annual or Foreign Transaction Fees: Keeps costs low for users.

Cons:

• Spending Cap: Cash back rate drops after $10,000 in spending.
• Account Requirements: Must maintain a high balance and perform regular deposits.

Hutchins presents this card as a viable option for those who meet the account requirements and seek a no-frills cash back solution.

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Supplementary Cash Back Strategies

Verizon Visa Card

[37:48] For Verizon customers, this card offers unlimited 4% cash back on dining, groceries, and gas, along with discounts on Verizon bills.

Pros:

• High Cash Back on Key Categories: 4% on unlimited dining, groceries, and gas.
• Additional Discounts: $10 per line discount on Verizon bills.

Cons:

• Eligibility Restriction: Only available to Verizon customers.
• Unclear Reward Redemption: Uncertainty around handling excess rewards beyond bill payments.

Hutchins suggests this card as a supplementary option for those who already have significant spending in its bonus categories and are Verizon customers.

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Maximizing Cash Back through Welcome Bonuses

In the latter part of the episode, Hutchins shifts focus to leveraging welcome bonuses to significantly boost cash back earnings.

Key Insights:

• Welcome Bonuses as High Returns: Spending thresholds tied to sign-up bonuses can yield effective cash back rates upwards of 20%.
• Strategic Card Openings: By thoughtfully opening multiple cards and meeting their spending requirements, users can amplify their overall cash back returns.
• Effective Cash Back Rates: Analyzing 59 offers, the median welcome bonus equated to an effective 15-16% cash back rate based on required spending.
• Potential Returns: Accumulating bonuses from numerous cards could theoretically achieve up to 13-23% effective cash back on total spending.

Quote: [35:13] Hutchins emphasizes the power of welcome bonuses: “If you're listening to this show, there's a decent chance that you do something in your life that would qualify you for a business card as a sole proprietor at minimum.”

Strategies Discussed:

1. Assess Card Opening Comfort: Determine how many new cards you’re willing to open annually to maximize bonuses.
2. Evaluate Bonus Offers: Prioritize cards with the highest bonus-to-spend ratios.
3. Pair Cards Strategically: Combine high cash back rate cards with those offering substantial welcome bonuses for optimal returns.
4. Monitor Spending Categories: Align card usage with spending habits to ensure maximum reward earnings.

Hutchins concludes that while high cash back rates on single cards are valuable, the true potential lies in strategically utilizing multiple welcome bonuses to exponentially increase overall rewards.

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Conclusion and Final Thoughts

In wrapping up, Chris Hutchins challenges listeners to rethink their approach to credit card rewards. By prioritizing welcome bonuses and strategically opening multiple cards, users can achieve significantly higher effective cash back rates than relying on single-card rewards alone.

Final Quote: [37:48] “If you're listening to this show, there's a decent chance that you do something in your life that would qualify you for a business card as a sole proprietor at minimum.”

He encourages listeners to join the All the Hacks membership for deeper insights and personalized advice, concluding with an invitation to explore further resources on the show’s website.

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Key Takeaways

• Single High-Reward Cards: U.S. Bank Smartly and similar cards offer impressive flat-rate cash back but come with limitations like high balance requirements and capped credit limits.
• Supplementary Strategies: Utilizing multiple cards with robust welcome bonuses can significantly enhance overall cash back earnings.
• Strategic Card Management: Balancing the number of cards opened with personal financial management is crucial to maximally leverage rewards without harming credit scores.
• Welcome Bonuses are Gold: Prioritizing cards with high-value bonuses can provide substantial short-term returns, which, when combined with ongoing rewards, offer a path to earning up to 20% back on spending.

Listeners are encouraged to analyze their spending patterns, explore multiple high-reward credit card options, and strategically utilize welcome bonuses to optimize their cash back earnings effectively.

Transcript

[Chris Hutchins]

There are so many different credit cards that can help you maximize your rewards across dozens of spending categories. But what if a single card could not only simplify your wallet, but also maximize your earnings? Today, I'm diving into the best single cash back cards that go way beyond earning just 2%. There's so many new options, including cards that earn up to 4% back on all your spending. So I'll break down the top contenders, their pros and cons, and how to choose the right one for you. And then I'll throw a little bit of a wrench in it all and tell you about an even better way to be earning 13% or more back on all your spending. I'm Chris Hutchins. If you enjoy this episode, please share it with a friend or leave a comment or review. And if you want to keep upgrading your life, money and travel, click follow or subscribe. Now. Let's get into it right after this. This episode is brought to you by Vuori. Now, there are only a few brands I use almost every single day, and Vori is definitely one of them. They make performance apparel that's incredibly versatile, yet so comfortable. Everything is designed to work out in, but doesn't look or feel like it at all. My personal favorites are the Sunday Performance Joggers and the Strato Tech Tees and Polos. But you also have to check out their dream knit collection. It's so amazing. Super soft, lightweight and moisture wicking. You can wear Vuori for just about any activity, whether it's running, training, yoga, but it's also great for lounging, running around town. And seriously, I wear their Meta pants and Stratotech Polos out for a nice dinner all the time. But Vuori isn't just for men. My wife is as obsessed with them as I am, and we both would agree that Vuori is definitely an investment in your happiness. And for our listeners, they're offering 20% off your first purchase, plus free shipping on US orders over $75 and free returns. So get yourself some of the most comfortable and versatile clothing on the [e-mail] Vuori that's V U O R I Again, that's all the hacks.com/vuori v u o R I To discover the versatility of Vuori clothing exclusions apply. Visit the website for full terms and conditions.

[Co-host or Guest]

First, I want to talk about the best cashback cards, because a lot of things have changed. In episode 170 I had an episode.

[Chris Hutchins]

Called Cashback vs Points and I made a case for cash back then.

[Co-host or Guest]

But this felt like it needed an update since there's been a lot of changes, most specifically the US Bank Smartly card, which has really forced a lot.

[Chris Hutchins]

Of people, myself included, to decide how much we really value our points.

[Co-host or Guest]

Today I want to talk about the best single cashback card we can have in our wallets. If there is just going to be one card, we can have to handle the everything category. Anything you want to spend money on, what that card would be, and there's a few options and then what that means for the points game.

[Chris Hutchins]

That said, I'm not going to cover.

[Co-host or Guest]

Everything I did in that episode. So if you want to go deeper.

[Chris Hutchins]

And listen to the best cashback cards.

[Co-host or Guest]

For every spending category and how I.

[Chris Hutchins]

Think about points versus cash back, go back to episode 170.

[Co-host or Guest]

Okay, so you know how we're going to handle this? We are not going to look at anything 2% or below because there are so many cashback cards out there for 2% that I think now because of the cards that earn more than that, a 2% card is actually leaving money on the table. So today I'm really only going to focus on the cards that earn more than 2% on all of your spending. And fortunately there's nine different cards that I found that do that. But just to do a quick recap, I am not sharing all of this because I don't think points are valuable and I think we should all just switch everything to cash back. I just want to share this because if you're using a 11 1/2 or even a 2x points card for all your spending or just your everyday spending, that doesn't fit into a bonus when you could be earning 4% cash back, that means you're valuing your points at 2 to 2.6 cents per point. And while I've gotten that much value and even more sometimes from my points, if you look at the points guys valuations or frequent milers reasonable redemption values, you'll notice that there isn't a single airline or hotel point that gets valued above 2 cents on either one of those lists. Now, the points guy does say that some transferable credit card points are worth more than 2 cents, but it caps at 2.05 cents. And that's not because those points are necessarily transferable to places worth way more. It's just that they get a premium because they have so many different ways you can redeem them. So given that, I want to start talking about the best cashback cards for everything. And so I'm going to start with the new kid on the street. The US bank smartly Visa Signature card because it earns up to 4% cash back on every single purchase. So I'm looking at the website, it's stated as a unlimited 2% cashback card because in order to get to 4% you need to have some money stored at U.S. bank. Now that money doesn't have to be in a checking account. It could also be in a brokerage account. And so you could transfer over an IRA or some stocks. And if you transfer 5,000 or more dollars over or you hold $5,000 or more in your accounts, you get 2.5% on everything. If you go over 50,000 you get 3% back on your card. And if you go over $100,000 you get 4.4% back on everything. Now that is incredible. I don't honestly even understand how this is possible because as someone who now runs an e commerce website, I'm not paying 4% to run credit card transactions. So how they can afford to give you 4% I have no idea how long this will last, I don't know. But I have multiple friends with this card and they have gotten their 4% back. They have not had transactions getting declined and they've been very happy with their experience with US Bank. So a couple of the basics here, $0 annual fee, which is amazing, no sign up bonus. So if you think a lot of credit cards are giving away a lot of value in a signup bonus, that's not happening here. So that's some of the way that they're able to justify giving 4% back. At least that's my assumption. A couple other things about this card. One, it's missing a lot of the common things you find from premium travel credit cards and I guess at a $0 annual fee that's because it's not a premium card. But when you look at the return it is. So there are no waived foreign transaction fees. So if you use this card overseas you're going to be paying 3% for all foreign transaction purchases. There's also no rental car coverage, travel insurance, TSA or pre check. So a lot of those things are missing a couple little small nuance things that I've read when I'm doing my research here. There's no support for Google voice phone numbers. So if you are someone who doesn't like using your regular phone number there that's a problem. On the flip side, a good friend of mine has this card and he's really enjoyed the experience of using U.S. bank as a bank and the card together. One example was he had hit his limit on the card and he was able to log into the app immediately, pay off part of the card from his checking account and be able to use that credit card for a purchase right away. Now, one of the things that I will point out is that he also had a pretty low limit. So this is someone that I know who regularly has high limits on other cards. And the highest limit he was able to get on this card was only $15,000. And so one of the drawbacks on this card is I have not heard a lot of stories of people getting really, really high limits. And from my experience doing a ton of research, US bank isn't too keen on you getting a $15,000 limit. Spending $15,000 paying it down, spending another 15 paying it down, which is called credit cycling. They don't love that. Now does that mean that if you do it one time it's going to be a problem? Probably not, but I think if you're consistently doing that and spending 50, 60,000 doll paying your card down frequently. Obviously I don't know any of the underwriting criteria here, but there's a decent chance you could get your card canceled, shut down, your limit lowered, etc, so those are some of the drawbacks. That said, if you have $100,000 that you can park somewhere at U.S. bank and because you can do that with brokerage assets, it doesn't cost you anything. It's not like you have to put it in a checking account that earns 0% when you could be earning 4%. So in my mind, this card seems like a no brainer, awesome card to be in your back pocket for that everything else category, with the exception of a few things I'll bring up a little bit later. So that is the U.S. bank smartly card. Now there is another U.S. bank card and funny enough, the day the Smartly card came out, they stopped taking applications for it. However, I have seen that you can product change into it and that's the US Bank Altitude Reserve card. Now, because you can product change into it, I'm still going to touch on it, but I'm only going to do that briefly because it's kind of interesting. It is not an everything card in that there are plenty of purchases that will only earn 1x or 11 1/2x points, which is not that exciting. But the categories where it does earn are so broad that I feel like it's worth including here. And that's because it earns 3x points on travel and all mobile wallet spending. So that's anywhere that you can pay with Apple Pay and whether that's Apple Pay on your phone using Tap to pay or if you've noticed there are a lot of web websites now when you're using mobile or if you have a Mac using Safari, you can use Apple Pay on the web. And that's not just Apple Pay, it's Google Wallet and Samsung Pay as well that makes it effectively a 3x points card. However, there's this thing that US bank has for these cards and I'll put a link in the show notes for more detail called Real time Rewards. And anytime you make a purchase in the travel category, they give you a text that says hey, if you want you can use your points to pay off this purchase and you can get one and a half cents per point. Now if you just go to redeem your points for statement credits and that kind of stuff, they're worth one cent. So if you're earning 3x points and you're able to redeem them at one and a half cents, then that makes it an effective 4.5% cash back card on all mobile wallet and travel purchases. Now I don't know about you guys and how you spend your money, but the vast majority of things I spend my money on that are not in bonus categories elsewhere. I can pay with mobile wallet, I can pay with Apple Pay online and that kind of stuff. So I felt like it was worth mentioning this card. I know you can't sign up for it now, but if you do have another US bank card, I have been told that some people are able to product change over to it. One of the examples was the Altitude Go card, so I just want to mention it. It's also a much more kind of premium like travel card, so it does have a $400 annual fee, but it comes with $325 of travel and dining credits that are so easy to use that I didn't even try to use them and they just on the card and it has all the standard benefits that a high end travel card has. You get airport lounge access, travel coverage, primary rental car coverage, some statuses on different rental car companies, a credit for global entry, no foreign transaction fees and all that kind of stuff. So I've been really happy having the US Bank Altitude Reserve card. Will I product change it to a smartly card or get a smartly card? For right now? No, because most of where I'm spending money that is not earning more than an effective 4% is where I can use Apple Pay. So this card is effectively a four and a half percent on almost everything card. For me. Costco is a great example of a place where we spend money and I can pay with Apple pay. Next card is the Robinhood Gold card. Now when this first got announced it was unheard of.3% on everything. That's wild. And that was obviously short lived with the US bank smartly card. But here you get a 3% on everything card with no foreign transaction fees. It technically doesn't have an annual fee, but you can only get it if you have Robinhood gold, which is $60 a year. And there are a lot of other benefits of Robinhood Gold that I won't talk about, but it's up to you to determine whether that is an annual fee or not, depending on whether you already have Robinhood Gold or the other benefits make up for it. So pretty great option if you for whatever reason don't want a US bank card or if you don't have the a hundred thousand dollars you need to meet their minimum. The US bank card isn't a 4% card and so Robin Hood Gold card is interesting. The only hesitation I have, and one of the reasons I didn't get it out the gate was that there was some mixed messages online about what kinds of purchases were qualifying. And there were people who had bought gold at Costco and gotten that declined or made really large tax purchases and gotten that declined. And having gone deep in Reddit and reading about this, I don't think that those claims were as widely experienced as they felt in the beginning. I think it was a few people were complaining. But if you do go read the terms of the card on rewards, they do say that purchases of precious metals, including gold, are not eligible for rewards. Same goes for purchasing reloads of balances on gift cards or prepay cards or cash equivalents, business type transactions, including reselling. So if you wanted to buy a bunch of stuff at Best Buy to be able to resell, that was something that the terms explicitly say would not be eligible for rewards. There might be something like this in other card terms of services. I went and looked and didn't find it. But they say Robin Hood in its sole discretion determines whether a transaction constitutes an eligible purchase and has the right to deny points or remove points if they were already granted on a transaction that is ultimately deemed ineligible. So if you're using this for regular spending, I don't think you're gonna have a problem. But if you're using this to try to do lots of things at scale. I think you might find out that their uncapped unlimited rewards could come into issues, especially if you're doing a lot of business spending or reselling spending or things like that. So I think it's a good option, especially if you don't have the capital to be able to earn the higher rates with the Smartly card. Now, another card that I think is one that people probably weren't expecting to hear about is the Discover IT card. And Discover is so interesting because I'm looking at their website right now and they just say travel credit card. So I'm like, which card is this? But when I click on it, it says it's the Discover IT Miles card. And what's interesting here is technically this card only earns 1 1/2 miles for every dollar spent. So it's a 1 1/2x card, but for the first year you get 2x miles, which makes it a 3% back card. No annual fee. Also no signup bonus, but surprisingly no foreign transaction fees. In fact, I didn't know this, but Discover has no foreign transaction fees on all credit cards. So that's kind of interesting. Another cool thing, this card seems to be very easy to get multiple times. I saw a lot of people on Reddit post that someone had it four or five times and so getting it once, maybe your partner getting it the next year, maybe you getting it again the next year seems to be very possible. I do know that Discover is not known for really, really high credit limits, so that may be a challenge if you need to spend lots of money. But a no annual fee, no need to get Robinhood Gold. Like kind of straightforward, easy way to get 3X for the first year is the Discover it Miles card. And potentially to be able to do it over and over again. Added bonus, the card right now on their website says that it has 0% APR for the first 15 months. And so in addition to getting this card, you also could potentially benefit from not having to completely pay it off right away and be able to invest the money and earn a return there, which is an interesting thing that were the limit of the card to be high enough, that'd be interesting if you have this card and you can earn 3% back on everything for a year, carrying a balance actually limits how much you can spend over the year. And so it might not actually be worth it from that perspective. But interesting card. There are a few cards that I've never had. I've never had a Citi. Thank you Point card or a Discover Card. They're things that a part of me wants solely just to have the experience, but then another part of me doesn't think it's worth a new slot given all the other options there are.

[Chris Hutchins]

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[Co-host or Guest]

Next on the list is bank of America. And I actually have a lot of recent experience because we've opened a handful of bank of America cards recently. And bank of America's lineup is pretty interesting. And it was incredibly interesting before the launch of the US Bank Smartly card and the Robinhood card. And I'll say for a couple reasons, it's maybe still interesting. And if you look at any bank of America card on face value, it's probably not going to be that exciting. And it becomes exciting with their preferred rewards program. And I'm pulling up right now, they have a Gold Tier, a Platinum tier, a Platinum Honors tier, and a Diamond tier. And the reason that gets interesting is because whatever you earn on your credit card gets multiplied based on the tier you have. And so if you have $20,000 of combined balance across your accounts at bank of America, which includes any accounts you have at Merrill, their partner brokerage firm, you get a increase of 25% of the points. If you have over $50,000, then you qualify for the Platinum tier and you get a 50% boost. And then at platinum honors, you get a 75% boost. And then at the diamond tier, you actually get no extra benefits on your credit card. I'm not actually sure what other extra benefits you do get, so I don't know why that tier would be interesting to anyone. I've never heard of anyone in the points world talk about it. Now, as for which cards make this interesting, there are actually quite a large number of them. The main ones are the Unlimited Cash Travel Rewards, Premium Rewards and Premium Rewards Elite. And the Unlimited Cash and the Travel Rewards also come in a business version. And so one of the reasons that I think this is interesting is it is really tough to get really great cash back on business cards. There aren't a lot of business cards offering more than 2% cash back, but the Unlimited Cash and the Travel Rewards business cards do, assuming you qualify for those higher tiers. And so how this works is the Unlimited Cash and the Travel Rewards both earn 1.5x or 1.5%. And if you multiply that 1.5% times 1.75, because you get that boost if you're in the Platinum honors camp, you go to 2.625%. Now on the consumer side, you might say 2.625% is nothing compared to 4% on the US Bank Smartly card. And you would be right. And so it's actually potentially pretty interesting to consider this. Only if you need a business card. For some reason you can't qualify for the US bank card or if you spend so much money that the limits you can get on your US bank card just aren't enough. And that's because I've had a lot of people I know at bank of America be successful in getting incredibly large limits with bank of America that I have not seen with US Bank. I mentioned the unlimited cash and the Travel Rewards. One other bonus they do offer signup bonuses on Both those cards, $200 or 20,000 points, they both actually offer 0% APR for 15 months. The only real difference between the two that I could find is the Travel Rewards has no foreign transaction fees. The unlimited cash has a 3% foreign transaction fee. And the Travel Rewards card seems to earn miles, but it seems very easy to turn those miles into statement credits worth a penny. So it's effectively seems like the same thing. So I'm not really sure the difference between those two cards practically, but they are separate. And it has not been hard for me on the business side to be able to get the card limit to be up north of $50,000, which has been super on the business side. The one thing I will say on the personal and business side, obviously you have to open up an account. One cool thing is that once you open that account, you can fund it and you qualify for their status for a full year once you have that balance. So if you put $100,000 in your account, you can quickly qualify. They have a kind of accelerated way to earn your preferred reward status. And it lasts for a year. So you don't need to have that hundred thousand dollars all the time. I believe it's on a rolling three month average to qualify again for a year. So probably months, 10, 11, 12, you might need to have that $100,000 balance. But because you can open up a brokerage account and transfer over securities or IRAs, it makes it pretty easy to not worry about the fact that their checking account or their savings account isn't going to earn a lot of interest. I will say opening up the Merrill brokerage account for the business is not the easiest thing to do. And so for us, we're able to move some business assets into the checking account and qualify for a year. And now we have like six more months to figure out how to open up this business brokerage account. I know how to do it, but it requires a physical paper form that I believe needs to be faxed or brought into a branch. And so I just haven't gotten around to it. The other two cards that they have that are not the travel and unlimited cash are the premium rewards cards and the base one. The premium rewards card practically has the same spending return except that you also get 2x points on travel. So instead of 1 1/2x on everything, you get 1 1/2x on everything and 2x on travel and dining. So I did briefly mention the premium rewards and the premium rewards elite card and they also get 1 1/2 x on everything. With your platinum honor status would go to 2.625%. However, the bonus is that they get 2x on travel and dining. And with your platinum honor status, that brings it up to 3 and a half x on travel and dining. And so depending on how you spend and what the blended average of your travel dining versus non travel dining, this could pretty easily find its way to be close to or even north of a 3% on everything card. And these cards both have pretty good sign up bonuses, at least relative to the US bank card which doesn't have one at all. And the premium rewards elite card has a 75,000 point signup bonus points are ending up being worth $0.01. So a 600 and a $750 sign up bonus. Now interesting. If you assume that maybe you can average 3% on everything. So I was trying to compare this to the US bank card. So 3% on everything here because you're getting three and a half on travel and dining and 2.625 on everything else. And you want to compare that to the US Bank Smartly card. Well, you're earning 1% there, but you're getting a 75,000 point signup bonus which is $750. So effectively, because you're getting that $750 signup bonus on the premium rewards elite card, it's kind of like getting a 4% return on the first $75,000 you spend on the card in a way. So you could view it like that. In a way it's actually better because you get it all up front. Front. So I would say given the fact that this has a signup bonus, it could be a better card for however long it takes you to spend $75,000. And if you had a heavier weighting towards travel and dining spend, then it would actually go up and take you even further because you'd be only earning an incremental half a percent, getting 4% versus 3.5 than you would getting 4% versus 3 or 2.625 if you were to use one of the other bank of America cards. So both those cards do have an annual fee 95 for the regular 550 for the elite. But to make up for that, they have a bunch of credits. And so the $95 version gives you a global entry credit every four years. It gives you $100 airline incidental credit, which we found to be really easy to use without even trying. And with the Elite card, you get four Priority Pass memberships. Now that's not four authorized user cards. With one Premium Rewards Elite card, you get four individual Priority Pass memberships that include restaurant access, which is something that almost every other issuer has lost. And then on the cards you get rental status, travel coverage, purchase protection, that kind of stuff. There's also no foreign transaction fees. And then finally on the Elite card, yes, it has a much higher annual fee at 550, but you're getting a $300 airline credit and $150 lifestyle credit, which total 450. So effectively you're paying $100 for that card. But depending on how you value four Priority Pass memberships and the signup bonus, it could break even that. That's the card we went with, and so far it's been great. There also is one perk of the Premium Rewards Elite card that actually might make it very competitive with the US Bank Smartly card. And that is that if you want to book travel using bank of America's travel portal, on domestic or international airfare in any class, you get a 20% discount using your points. So what that means is if you had a hundred thousand points that would normally be redeemable for a thousand dollar statement credit or a thousand dollars of travel, you actually could go use those points and get a discount. So that thousand dollars of travel that you want to book would actually be 80,000 points, or that a hundred thousand points would actually get you $1,250 worth of travel because you take 20% off 1250. So if you add 25% to earning 2.6 to 5% on everything, you get 3.28% on everything. Or if you add that 25% boost to earning 3.5x on travel and dining, you end up with 4.375% back. So obviously the requirement here is you book your travel in the bank of America portal. I have not gone through that experience yet. I don't know how hard or easy it is. I don't know how frustrating it is. I've talked in the past about how I prefer not to book in the travel portal, but if I'm able to get an extra 25% of value from all my points, I don't know, it might be worth it, especially for certain trips. But given how easy it is to have a simple straight 4% on everything card with the US bank smartly, is this even worth it? I would say probably not. Unless maybe you're already a Bank of America customer and you love it. Or if you really value having a much higher limit. Right? If you're spending 30, 40, $50,000 a month, then that US bank smartly card can't keep up. And so that card might feel like a 4% card, but if it can only cover half your spending, then what's the backup card and what is your effective rate? And so I would say that for someone who spends more than 15, $20,000, which seems to be about the limit people have been getting for the Smartly card, if you're spending more than that, looking to bank of America, especially the Premium Rewards Elite, might be a good option. The last card I'm going to mention is the Alliant Credit Union Visa Signature card. And I don't know anyone that has this card. I've never had this card. I've never had an account at Alliant. But the one interesting thing is it is a 2.5% cash back on everything card. It does have a few hoops that you have to jump through, but no annual fee, no foreign transaction fees, does have some travel protections, it does not have a sign up bonus. And so if for whatever reason none of the other options make sense for you, I said at the outset I'm going to talk about cards that earn more than 2% on everything. I think this qualifies because it's 2 1/2%. The only catch is it's only on up to $10,000 per billing cycle. So $120,000 of spend. I know that's plenty for most people, so I thought it was worth including. After that it rolls over to one and a half percent. The requirements you need to jump through to make this work is you do need to enroll in E statements. I imagine everyone list prefers getting electronic statements to paper ones. And then you do need to open up Their high rate checking account, which is not very high rate, it's 0.25%. And you need to have one deposit a month and that could be a direct deposit, an ATM deposit, a mobile check deposit, or even a transfer from another bank. And you need to maintain a balance of $1,000 or more. Now if you compare that thousand dollars what you would earn earning 4% somewhere else relative to a quarter of a percent here, it's going to cost you $37.50 a year. So not too high. But I would effectively assume that, okay, this is kind of a $37.50 annual fee card if I have to open up that account. That said, I think all of the other options are pretty great. But if I go through how this looks in my head and I compare them really quickly, if you have a hundred thousand dollars that you can move in brokerage or dollars, US bank smartly seems like the easiest unless you need a really high limit and bank of America seems to make that a little bit easier. Or if you need a business card, that seems to be easier. If a lot of your spending is mobile wallet and travel and you can open up a US bank card and you're able or eligible to product change over the altitude reserve could be interesting if you're willing to use Robinhood. I know there are a lot of people that have strong feelings about it. 3% seems to make sense and be the best option if you don't have $100,000 to transfer over. The Discover card seems to be a good backup to that though it's only effective for a year, so you'd have to keep reapplying for it or opening it with your partner. But if all of those don't make sense, the Alliant as a backup earning 2 1/2% is interesting, but at the point we're talking about 2 1/2% back on everything you spend money on. I start to think about whether I would actually rather just have 2x points with something like the Capital One Venture X or the Venture Card. So that's the summary here. Now I said that was the single best card, but I couldn't help myself from doing a really quick look at the card optimizer tool I built and looking for the best cards that might complement that. Let's say you decide, you know what, this is the year for cash back. Let's forget about points. What do I do? Are there any other cards that you could pair with a card earning 3,4% cash back that even makes sense if we Start first. Assuming you have the Smartly card, it's a really easy filter. You're looking for any card where you can earn more than 4%. And there aren't a lot of cards even on categories that earn that much more. The most common cards that I would say can beat 4% are there's a handful of cards that do these rotating categories or categories that you pick, like bank of America Customized Cash, the Citi Custom Cash, US Bank Cash plus, where you earn 5, sometimes 6% on some amount of money that when you annualize, it ends up being around six to $10,000 a year. But if you go all the way to the top and say, okay, let's look at a 5% card that's going to earn that on $10,000 a year relative to getting 4%, you're really just getting an extra 1% on $10,000, which is just 100. Now, if I saw a hundred dollars on the side of the road, I'm definitely going to pick it up, but I'm not sure that I would open up a new credit card, add it to my wallet, think about which card I'm using, think about when I've spent too much so that I don't use it anymore to earn an extra hundred dollars. So if you've got the Smartly card and you're earning 4%, I can't really make a case for any other card unless you're focused on a welcome bonus or you want to earn points. And on that welcome bonus point, we're going to get to that. Now, if for some reason you don't have the Smartly card and you're really only at 3%, then there are a few more options. Those category cards now are going to earn you an extra 2 to 3%, which could be worth $200 a year, maybe $300 a year. Still probably not worth it relative to what you could get from another card in your arsenal. But where I think it could be worth it is not the rotating cards that have a limit, but there are some cashback cards out there where you can earn 4 points or 4% back on a handful of categories. And when those cards come into play, I think if you're sitting with the Robin hood card earning 3%, it could be worth putting some of your spend on them. And the first one I'm going to mention might really surprise you because I don't think I've ever really considered it. But that is the Verizon Visa card. Now, the obvious challenge here is you can only get this card if you're a Verizon customer, which means you're probably already spending way more money on your phone bill than you would need to somewhere else. At least based on my experience as a former Verizon customer. But if you are eligible for this card as a Verizon customer, not only do you get $10 per line discount on your Verizon bill, but you get unlimited uncapped forex on dining, grocery and gas. So it's effectively just 4% cash back you're earning these Verizon rewards. But the one caveat I'd say is those Verizon rewards seem to only be able to be used to offset your bill. And I couldn't find anyone that could explain what would happen if you earned more Verizon rewards in a year than your bill. Like, what do you do with that money? How do you get it out? Can you pay a negative balance in your bill and get reimbursed? That was a little bit unclear. But if you're looking for a supplement card for the Robinhood Gold card and you spend a ton of money on dining, groceries and gas and you have Verizon, that could be a pretty rewarding experience. There's also a gold card out there from a very popular bank that has 4x on dining and groceries and capped at, I believe, 25 and $50,000. And so if you're spending a lot a year in those categories, that could be worth it because it's not just capped at 6,000 or 10,000. So if you have a 3x card, that could make sense. If you spend a ton of money on hotels or flights, there's the autograph journey, there's a platinum card. Those could make sense, but otherwise that's kind of it. Like if you have a 3 or 4% cash back card, I don't know if you really need a compliment, unless maybe you have the 3% and you spend a ridiculous amount of money in a couple categories that you could earn a little bit more. But you know, we're talking probably for most people, hundreds of dollars, not thousands or more.

[Chris Hutchins]

This episode is brought to you by Gilt. When it comes to building wealth, taxes are such a big part of the strategy. And as tax time gets closer, getting prepared is so important. And now that I'm working with G, I finally feel like I have a partner I can trust to handle everything for my personal and business taxes. Think of Galt as the ultimate modern cpa. Of course they have an in house team of expert CPAs to work with who help you determine the most effective tax strategies to minimize your risk and grow your wealth. But they also have an amazing tech platform that gives you personalized guidance to maximize deductions, tax credits and savings. There's also an amazing document vault where you can upload all your files, tag them with relevant years, and even see when your tax team has reviewed each file. Beyond that, the tax library you get access to has dozens of in depth guides on things like choosing retirement plans, taxes for new parents, qualified business income or qbi, and so much more. So if you're ready for a more premium proactive tax strategy to optimize and file your taxes, you have to check out Gilt. And as an all the Hacks listener, you can skip the wait list. Just head to allthehacks.com GELT G E L T Again, that's allthehacks.com G E L T to stop overpaying on taxes this episode is brought to you by Bilt Rewards. When the kids are out of school this summer, we're going to try to take an epic vacation entirely made possible by points. And when it comes to my favorite transferable points, you need to be checking out bilt, especially if you're a renter, because it's an incredible way to earn points on rent and redeem them towards flights, hotels and a lot more. There's no cost to join bilt and as a member you'll earn valuable points on rent and on your everyday spending. Built points can be transferred to your favorite hotels and airlines and even the ones you haven't heard of. There are over 500 airlines and 700,000 hotels and properties around the world you can redeem your built points toward. Points can also be redeemed towards a future rent payment and unique experiences that only Built members can access. So if you're not earning points on rent, my question is why not start earning points on rent you're already paying by going to allthehacks.com biltine b I l t that's all the hacks.com built. B I L T Make sure to use our URL so they know we sent you all the hacks.com built to start earning points on your rent payments today. I just want to thank you Quick for listening to and supporting the show. Your support is what keeps this show going. To get all of the URLs, codes, deals and discounts from our partners, you can go to allthehacks.com deals. So please consider supporting those who support.

[Co-host or Guest]

Us to go back to all Those point valuations, there are plenty of options where points are worth more than $0.01, right? You can look at almost every airline point and Hyatt points mostly, not the other hotel points. Points are worth more than $0.01. So doing this analysis that I did, comparing one to one might not always make sense, right? If you're looking at a card that earns 4x points on groceries, is it fair to compare that equally to 4% cash back? Really depends on you, but probably not. If you have a 3% cashback card and you're comparing it to earning three transferable points on dining, I don't know, I'd probably take the points over three cents almost every day. So earning points might change some of this calculus. But when you go back to looking at your everyday spend, if you're buying something online from a random retailer and the best points card you have is going to earn 2x points, I really think for all those transactions, you should consider whether cash back is a better option. In that episode that I talked about earlier, number 170, I talked a lot about how buying points kind of changes this because it doesn't mean you can't benefit from the value of points. You can use that cash back to go buy points. Sure, it doesn't feel as free because you have these points and you can't really convert them to cash and you get to take these vacations. But practically, I think it might be a better ROI for a lot of those purchases if you're only earning 11 and a half or 2x points. But I mentioned welcome bonuses earlier and I really need to come back there because I think it makes a case for throwing out everything we just talked about. And I brought this up before, even in episode 170, but I went a lot deeper this time and I think it's worth diving into. So I went to our site, all the hacks.com cards, and I looked at some of the top bonuses. So for example, the Capital One Spark Cash plus, it's a $2,000 signup bonus on $30,000 of spend and you're getting 2% back on all that spend makes it effectively an 8.7% cash back card on the first $30,000. Until you hit that bonus, the Capital One venture X is 75,000 points, or $750 at least on $4,000 of spend, which makes it effectively a 20.75% cashback card, but again, only on that first $4,000. There's another offer for 60,000 points on $4,000 spend makes it 16% back. There's a hotel card that earns 175,000 hotel points that I'd probably value at around $875. And you get those after spending 6,000, so that's 15 and a half percent. And I can go on and on and on. There are so many cards that earn meaningful percentage of cash back. If you look at the effective cash back from the welcome bonus. In fact, I went through all 59 welcome offers I have listed on the page and which is normally sorted by best offer. And there isn't a single offer where the earnings you'd get from spending your way to that offer is less than 7% effective cash back. And that's valuing every single point in mile at $0.01 and all the hotel points except Hyatt at half a cent. And it doesn't factor in the fact that many of those cards are going to earn more points when you're spending your way towards that welcome bonus in different categories, whether they earn in travel categories, dining categories, etc. So I want to share some of the analysis that I did because it really changes my mind on how I think about spending. So from the analysis I learned a lot of things. But first off, there are actually way more than 59 cards out there. That's how many I had listed on the site with a welcome bonus. So as I was going through the list first, I decided to add another 30 to the site. So hopefully by the time you're here, there's 89 or more cards on the site and there will always be some cards I don't include. But I am trying to include everything I find that's worth adding. If you look at the long tail of random cruise cards, cards just for people that have poor credit and are unsecured cards and have no bonuses or even earning, I'm not including all of them. Now, I think you all know that some of the links on the website are partners of the show and we earn an affiliate commission when you use those links. So first off, thank you to everyone who does use those. They're a big way to support the show and it means a ton to me, Amy and all of us. But there are many cards where we don't have a partnership and I'm still going to add them to the site. I'm still going to try to link to the best offer and what we're going to do is I'm going to ask all the members from the all the Hacks membership if they have any referral links and I'll use those links and if they don't, I'm just going to find the best offer I can on the issuer's website. In fact, most credit card referral offers are worth anywhere from a hundred to five hundred. So if your link gets used even just once or twice a year, you'd earn way more from that credit card referral than you even pay for the membership. And it would be such an obvious decision for people to join. And in fact we do that currently with some referral links. And I know one member that told me she's made back over 10x the cost to join just in a few months. So obviously if you have credit cards with referral links and you're interested in joining the membership and participating, you can go to allthehacks.com join now keep in mind that offers do change all the time, so it's not possible that the site will be perfect. If you ever find a better offer out there, please email us podcastallthehacks.com, but also I want you to get the most points. So by all means, if you ever find a better link, use that link. But for everything where we do have the best offers, thank you so much in advance for supporting us and using the links on the [e-mail] cards okay, sorry for that detour back to my analysis of what I found digging into all these welcome bonuses. The median welcome bonus was $600 and the medium spend needed to hit that bonus was $4,000, which is an effective 15% cash back or 16% cash back when you account for the points earned from spending to get that bonus. And I'm just assuming that card earns at least 1% back on its spend. Now the biggest bonus on the list was the Spark Cash plus card, with a $2,000 bonus on $30,000 of spend. But accounting for the 2% back you'd get on that $30,000 of spend, it's really a $2,600 bonus that you'd end up earning from that spend. 8.67%. Pretty interesting, but 8.67% is not actually that high given that 21 of the cards on this site, which is over a third of them, had an average cashback rate or effective cashback rate on the welcome bonus spend of over 20%, with the top card earning 61 back in the form of a 300 bonus after only 500 of spend. So obviously that's a small bonus in the absolute terms, but in terms of the percent back 61% is pretty amazing, though. Part of what I realized when I said that was there were a couple cards I forgot. So the Barclays Hawaiian card, which hopefully is on the site by the time you look at this, is 70,000 points after your first purchase. So let's assume that first purchase is $1. That means that if you get the card, put $1 on it, you'd earn what I'll call at least $700 of value on $1 of spend, which is actually a 70,000% effective cash back rate, which is just wild. Finally, if you were to somehow be able to sign up for all 59 cards on the site today, you would need to spend $307,000 to get all 59 bonuses, which would be worth 41, 925, which is a 13.66% return on all your spend effective cash back. Now, obviously that doesn't include the 30 cards I mentioned. I'm going to try to add, and if you have a partner or a player too, you can double all those numbers. So my guess is by the time I add all these cards and all these bonuses, and if you and your partner got them all, you'd probably be able to earn at least 13 back on a million dollars of spend. Could you practically get approved for that many cards in a year? Probably not. But I do know there are tons of people who open five to ten cards a year and their partner does the same thing. And as they do it, their credit score continues to go up. So I think that number seems totally reasonable. So I just looked at 10 offers that you could get to hit $30,000 of spend. And if you really want to maximize things, you'd get $6,800 back, which is effectively a 23% cashback rate. And if you wanted to do that same $30,000 of spend on just five cards, you'd lower the bonus to $4,125. But it's still 13.75% back, at least as an effective cashback rate. Obviously, some of these points can be worth a lot more if you use them the right way. But even if we're just valuing them at $0.01 a point, that is an incredible amount of cash back compared to the first half of this episode. We were just talking about earning a max of 4%, so I could obviously keep going. This is a lot of fun for me, but I think this is a good place to stop. And the big takeaway here is I think that you should be thinking about earning the most Back by first deciding how many cards you're comfortable opening up each year to hit bonuses, then look at the best cards at the time you're opening them and the best bonuses on them. And if you can account for all of your spending in a year. Right. If you only spend $30,000 a year, I would make a case that you shouldn't open up any of these cash back cards and you should instead open somewhere between five and ten cards a year. And if you're with your partner, that's two to five cards per person and that would get you 13 to 23% back on all of your spending and more if you value points more than one cent. And so I think that's the right strategy. Now, if you're someone who spends $1 million a year, I don't think you can do this strategy. I think you're going to run out pretty quickly because by the time you open your 30th credit card in a year, I think you're going to get a lot of declines from banks and issuers. That said, if you're someone who's spending a much smaller amount of money, which is probably more like all of us, I think there are a lot of options that give us way more cash back, way more points than any of these other things. So I just push you all to think about whether welcome bonuses is actually the best way to manage your spend. And you can go look at all the cards to decide what the effective earning is and also how much you have to spend. Because if you're someone who spends a lot of money, yes, you might get the best absolute value from that Hawaiian card, but you only have to spend $1 on it. And so it doesn't last very long. Whereas that Spark Cash plus card, sure, the earning rate was lower at sub 10%, but you could use it for $30,000 of spend. And so obviously also that's a business card, so those kind of things come into play as well. But I'd say if you're listening to this show, there's a decent chance that you do something in your life that would qualify you for a business card as a sole proprietor at a minimum. So I'll put a link in the show notes to an article about that. But there are a lot of ways that you might be eligible that you weren't even thinking of. After you figure out how much you're comfortable opening up cards for welcome bonuses, whatever spending you have left, then look at whether it makes sense to go get a cash back card like the Smartly card or one of the others we talked about. I know for me this is an area where I struggle. I just went through this analysis to tell you that you shouldn't be spending money on a 4% card, a 3% card, or really any card because I can't think of any card that earns better than welcome bonus spend. But I can tell you that I'm not going to go open 10 cards a year and I don't know why because I know that it's not going to really affect my score. I kind of actually understand the mechanics of it and the different approval rules, but for some reason it just feels like a lot of hassle. And that's something I'm going to work on this year because it's not actually that much hassle. And in fact it's January 30th as I record this. And I think between Amy and I, we've probably opened at least two cards so far in January. So I am trying to live by this new thing. But I get why it feels like a lot because I've been there. It feels like, ah, do I really want to open another card? Another card? But then I meet people who opened 30 cards last year and had zero issues and because they were earning an average of 10 to 20% back throughout the year, they just got so much more out of their spend. And so I challenge you all to think about this and push yourself to look up some of the different rules for issuers. There are rules that limit how many cards you can open in a window. There are some issuers that are more sensitive to recent card openings. I believe back in an episode I did with Sebastian Fung from Ask Sebi, we talked about some of the sequencing here, so go back and look for that episode. But I hope this was helpful. If you want to go deeper on some of these questions or even ask me or our community, I invite you to join the all the Hacks membership where I try to answer everyone else's questions and I even put out some mini episodes in the last few months that go deeper and into areas that I just can't share too publicly about. So you can find more of that on allthehacks.com join I really hope hearing me dive into all of these thoughts on cash back and welcome bonuses and how to think about earning and maximizing is helpful. If you have questions like I mentioned, you can join the membership. You can always email podcastallthehacks.com thank you so much for listening. I will see you next week.