Two Credit Cards Stand Apart With Outstanding Reward Rates Across All Personal Spend

Over the last several years, all major credit card companies have gotten into the business of promoting spend in certain categories by issuing cards that provide extra points (or cash back) in certain spend categories. It started when most airline cards and hotel cards incentivized spend in the attached brand through bonus points. Now many credit issuers offer cards with bonuses across entire categories – for example, Chase’s Sapphire Reserve card offers 3x Chase Ultimate Rewards points for all travel and dining and Chase’s Ink Cash card offers 5x cash back (or UR points) for spend at office supply stores.

The whole game of getting the most bonus points for your spend has become a sport for many, and now borders on an addiction for some. BestCashCow helps you determine which card or cards will maximize your rewards or your cash back with the handy tool on this page (https://www.bestcashcow.com/credit-cards).

It is clear that there are some people who do not want to play the game of seeking the best bonuses in each category and who just want to carry the single card that rewards them the most across all of their spend.

There are others who play the game, but find that a lot of their credit card spending is in categories for which no credit card offers a bonus. Taxes, for example, is never a category for bonuses is taxes and service fees for paying them online are close to 2% for federal taxes on sites like pay1040.com and as high as 2.50% for some state and local taxes (usually through their websites). While taxes could easily be the largest spend category for many high earners, it is hard to justify paying them online with a credit card (instead of by check in the mail) when you pay these service fees to get back only 1 airline or hotel point per dollar or 1% cash back.

There are now two cards that stand out by offering an outstanding return on all spend, and that can be (and should be used) used for tax spend as well. One offers travel rewards (https://www.bestcashcow.com/credit-cards/cards-for-spend) and the other offers cash back (https://www.bestcashcow.com/credit-cards/cash-back).

The first is the Capital One Venture X card. This card is a new offering that gives 100,000 Capital One points after spending $10,000 in the first 6 months. It has a $395 annual fee, but also has a $300 travel credit for travel booked on the Capital One travel portal. The card gives 2x Capital One Venture points for all spend, regardless of category. The points can now be converted to Singapore Krisflyer, British Airways or Air France at 1 point to 1 point where more than a penny and half per point of value can be achieved when redeeming for Business class long haul travel.

Many people, however, are wondering whether they will be traveling as much in the Coronavirus and climate crisis era (and whether that travel will be international on partners like Capital One’s). At some point, there also becomes an issue relating the viability of some of these airlines and/or whether their points will continue to be significantly devalued. The second card by Bank America may be more suited to these folks.

The Bank of America Premium Rewards Visa Credit Card is a cash back credit card offering 2.625% cash back to cardholders holding at least $100,000 in an account at either Merrill Lynch or Bank of America. The card carries a $95 annual fee and usually offers some sort of bonus. It also offers a $100 incidental air travel fee (for checked bags) that you may or may not be able to use. (After your first year, you can also “downgrade” the card to another card that will give you 2.625% back with no fee, but also no travel credits).

Both of these cards have drawbacks – Capital One and Bank of America have inconsistent customer service that routinely falls below the level that customers of Chase or American Express have grown to expect. I suspect that many will wind up getting these cards and using them just for taxes and maybe other occasional and large purchases for which they cannot get bonuses, but will continue to keep Chase and Amex cards as their primary go-to cards in their wallets.