Credit cards for families
It is important to make the best use of benefits of credit cards as a family. I want to share in this post how Joseph and I managed credit cards for different living expenses.
Our Grocery card is American Express Blue Cash Preferred. The annual fee is $95 after the first year. Amex also has a Blue Cash card which does not require annual fee. Then why do we choose Preferred with $95 over the regular blue cash? Let me explain it.
Preferred offers a 6% cash back at supermarkets up to $6,000 per year in purchases, while regular blue cash offers a 3% cash back at supermarkets (also up to $6,000). In our example, our monthly grocery shopping expense is around $600-800, so it is a total of at least $7200 a year, which is over $6,000. For $6,000 spent on grocery, with preferred card, we can receive 6% cash back which is $360, minus the annual fee we still get a total of 275 cash back; while with blue cash, we can only receive 3% which is $180 even though there is no annual fee. So what is the threshold when preferred card is better than regular blue cash? In math, then it is at which point 6%*(your annual grocery expense)-95>3%*(your annual grocery expense)?
The number is $3,166.67. If your household grocery expenses per year is larger than this number, then applying for the Blue Cash preferred card is more worthwhile; vice versa.
Travel and dining card
Our travel and dining card is Chase Sapphire Preferred. I talked about how I used this card to book our trip to Cancun in another post: Budget Travel to Cancun. Again this is a card with annual fee, but it definitely worth the money.
For every dollar you spend on dining and travel, you would earn 2X points. We use it together with Chase Freedom card. So I have a Sapphire preferred and Joseph has a Chase freedom. The benefits of owning both cards is that you can transfer your points between these two cards as long as you are in the same household. Sometimes Chase Freedom has better cash back rewards, so it would be nice to transfer points. For example, for the first quarter in 2017, Freedom offers 5% cash back in purchases at Gas Station and Transportation.
As I mentioned in the Cancun trip post, we used my Hyatt credit card for redeeming two free nights in a Cancun all-inclusive hotel. The nice thing about this card is that besides two free-night bonus, you also get one free night per year. So even though the annual fee is $75, as long as the free night hotel fee is higher than $75, which is not a difficult goal to meet for Hyatt hotels.
We usually fly through Delta, so I applied for a Delta Skymiles card. I got a really good deal that offers 75,000 miles after spending $3k in the first three months. And the main benefits of this card is really great! First, you can always get your first checked bag free. Second, you can have priority boarding. This is very important to me. Before having this card, I was always in Zone 4 or 5 on each flight, which was definitely unpleasant. Third, you can earn 2 miles per dollar for Delta purchases.