Between the two of us, at any given time we're carrying between four and six credit cards. Different cards earn points at different rates in different categories at different times. Right now, the Chase Freedom earns 5x points at gas stations and local transit, so those expenses will go on that card. In April, the Freedom switches to 5x at grocery stores, so our transit will be switched to a different card (the Chase Freedom Unlimited), and grocery stores will go on the Freedom.
This is super annoying. It is annoying to track, and it is more annoying to realize when you've messed up and left points on the table because you were checking twitter in line rather than remembering which card to use. While we find it worth the annoyance, you might not. You might prefer to carry just one card for the rest of your life and use the points for Disney travel. So which card should you pick?
It will always be a somewhat individualized question
Picking the single right card based on your spending is going to be an individualized task at the end of the day. A simple way to see this is to compare the Chase Sapphire Reserve and the Citi DoubleCash. The Citi DoubleCash is a no-fee 2% cash back card. The Chase Sapphire Reserve has effectively a $150 annual fee ($450 minus $300 travel credit) and earns 3x Ultimate Rewards points on dining and travel and 1x Ultimate Rewards points on everything else. Those points have a minimum value of 1 cent each as a statement credit (this would be a horrible redemption, though), so effectively it is like getting 3% back on dining and travel and 1% back on everything else. Choosing between those two cards, then, will largely come down to how much you spend on each category of dining, travel, and everything else.
For kicks, let's make up some spending and compare three cards
Three easy contenders for the single card are the Citi DoubleCash, the Chase Sapphire Preferred, and the Chase Sapphire Reserve. To facilitate this comparison, I threw together a Google Sheet to compare those cards. To compare "cash back" amounts, I'm assuming you'll purchase travel through the Chase travel portal if you have one of those cards, thus your points will be worth 1.25 cents each (if you have the Preferred) or 1.5 cents each (Reserve). I subtract out the effective annual fees, and we have an estimate of what one might expect back from each of these three cards. I was a little surprised by the results.
It turns out that 2% back is hard to beat, even with high earning on travel and dining and the Chase travel portal's 1.5x boost for the Sapphire Reserve.
So why don't we hear much about 2% cash back cards?
Four reasons. Four very important reasons.
- They don't tend to have generous signup bonuses. Signup bonuses are the single best way to earn points because you're earning around 11x your spending, way better than 2%.
- A return of 2% is pretty easy to beat with the right combination of cards. This post is about owning a single card.
- Points have value beyond cash redemption. Because they can be transferred to airline and hotel partners, a point can often be worth more than one cent. For example, a flight from Chicago to Orlando, that might usually cost me $150 one way, can be gotten for 7,500 Chase Ultimate Rewards points by transferring them to British Airways. Those same 7,500 points would only count for $112.50 of "cash back" value in our above calculations for the Chase Sapphire Reserve, however.
- Finally, cash back cards often don't have as generous perks as some other cards. You won't get as good trip insurance, special event invitations, or concierge services.
What about the Disney cards?
We're written about the Disney cards a few times. They have some good perks, and you should review those perks as part of your analysis of the card. But they don't have a great rate of return (2% on some categories, 1% on most spending). And their return is in the form of Disney reward dollars and sometimes a travel credit. If you can make up that 1% using the perks, then the Disney cards might be good to consider.
The Almost Bottom Line
If you only want to have one card and you're not interested in perks, signup bonuses, or redeeming points for anything other than a statement credit, then a 2% cash back card, like the Citi DoubleCash, is probably the right choice for you. If you have any interest in international Disney destinations or in Aulani, you need to strongly consider the Chase Sapphire cards. Domestic travel is often not a good use of Ultimate Rewards points, but you can save greatly redeeming points for international travel and travel to Hawaii.
Walt Disney World Travelers Can Do Even Better
If you're a die hard Walt Disney World fan, you'll need to consider the American Express SPG card. Although we usually talk about this card for its signup bonus, the SPG Amex is widely considered one of the best cards for a travel hacker's wallet, mostly because of how powerful Starpoints are. For Disney travelers, the major perk is that the Starpoints you earn can be used to redeem stays at the Swan and Dolphin hotels, starting at 10,000 per night.
For four night during Disney's Fun & Sun deal, for example, you'd have to spend at least the following amounts on a 2% cash back card for four free nights at the corresponding hotels: Pop Century, $27,540; Caribbean Beach, $46,460; Beach Club, $102,701. Conversely, putting $40,000 on your SPG Amex will get you four free nights at the Dolphin. Of course, you can only redeem your Starpoints for the Swan and Dolphin, so you're sacrificing flexibility for a better rate of return.
The Bottom Line
What we're left with is a mixed bag of results. If you are a frequenter of Disneyland, you'll likely be best served by a 2% cash back card. The Citi DoubleCash and Fidelity Visa are worth considering. If you're more into Walt Disney World, you'll want to consider the SPG Amex as an alternative if you're willing to be locked into staying at the Swan and Dolphin. If you're at all interested in international destinations or Aulani, the Chase Sapphire Preferred or Reserve is probably the way to go.