When I work with students looking to get a new or first credit card, many of them focus on being rewarded for aspirational spending. That is, spending they would like to be doing, travel being chief among them.
The problem with focusing on aspirational spending is that it may not be maximizing our cash back potential. Yes, we all like to travel, but it may not make up the majority of our everyday spending. This is especially true of families with children. Instead of focusing on spending you’d like to do, it’s more efficient to concentrate on spending you are already doing.
There are plenty of cards that reward generously for common household expenditures like grocery and gas purchases. The AMEX Blue Cash Everyday card, for instance, offers 3% back on groceries and 2% back on gas and department stores. This is pretty good for a card with no annual fee. Similarly, the Capital One Savor card, which is fairly new, gives users 3% on restaurant and 2% on grocery spending. Both cards have a baseline 1% cashback on all other spending.
Unless you’re building loyalty with a specific hotel or airline, I assume the purpose of getting a travel-related credit card is to take advantage of a lucrative sign-on bonus. However, once the required spend is met for said bonus, most travel cards lose their efficiency. This is why, even if you are an avid churn and burner, it is good to have an everyday card to maximize your rewards. It’ll be beneficial to have a card to hold you over between travel cards. You’ll also have the opportunity to earn increased cash back with flexible redemption options. Any cash or points you acquire can then be used for aspirational purchases. You know, things like airfare and hotels.