Recently I have been asked by several people about the best credit cards to use.  I will not say these are the “best” but they are the ones that work for me.

Everyday expenses: American Express Blue Cash Preferred.  Biggest rebates on staples (6% on $6,000 of annual groceries is $360 back for doing what I would have done anyway) and 1% cash rebates on other charges.  Over the weekend I visited the Whole Foods in Boulder, CO where they were having a local promotion: purchase a Whole Foods for at least $50 and receive a 10% bonus. This enabled me to purchase $1100 worth of gift cards for $940.  ($1000 charged to Amex Blue will get me $60 in rebates) It will cover my Whole Foods grocery bill for the next four months, and it is hard to find any investment offering a 17% return in four months.  Annual fee: $75.

Oddball expenses: Chase United Visa Explorer  When I travel by air it is usually on United. This card allows me to check two bags without charge and offers modest mileage benefits (see more about Chase cards below).  Second major benefit is no foreign transaction fees. While I hardly ever travel outside the U.S. like most people I order stuff online occasionally from foreign countries who charge in that currency.  Credit card fees of 1-3% can make that expensive quickly, and this card does not charge those.  Annual fee: $95. This one is a judgment call that I have to sit down each year and re-evaluate as options change, which they always do. I only use it for United plane tickets, foreign transactions, or the case where the merchant does not accept American Express.

Business expenses:  American Express Simply Cash.  Best cash rebate structure for a card with no annual fee.  It’s rebate structure may not be quite as good as the Blue Cash card in some instances (it’s better in others) but it’s important to me to segregate out all of my business expenses to make sure they are properly documented and reimbursed by my company.

I do not think credit cards are awesome, nor do I think they are evil.  They are tools that in the 21st century are essential to live a middle-class existence.  Yes, people abuse them and get into hot financial water.  Many people enjoy an alcoholic beverage yet some become alcoholics.  If you have a problem with cards that you cannot manage then you need to avoid them.

What matters to me in choosing a card is ease of use and cost of ownership.  This means I have cards that are accepted quickly and easily all over the world and put the biggest chunk of money back in my bank account.  I don’t care about miles because travel is not as important to me and I don’t believe that is as good a deal as cash.  Cash has no expiration and no blackout dates!

On the rare occasion when I have had an issue like fraudulent purchases American Express has come through for me quickly and painlessly.  That means something, and probably why I have used them for 25 years.  I have not yet had the opportunity to put Chase to the test.

Recently Chase had some huge bonuses on their mileage cards (Chase Sapphire Preferred and Chase Ink Business Plus, 50k and 70k miles respectively) that have inspired me to get each card. These bonuses come and go all the time, so if you’re interested you need to pay attention and pick your spots. I am planning more travel next year, so for 120k miles I decided to take the plunge.  They both carry hefty fees, so I will re-evaluate in a year to see if they are worth the cost of carry.  I am not optimistic they will be sticking around long after the bonuses have been achieved, but who knows? I might be surprised.

Credit card fraud is a bigger problem for banks than it is for consumers.  Check your statement every month and call the company if you do not recall a transaction.  Do not worry about strategies to optimize your credit score with cards.  Live within your means, pay your bills, don’t carry balances on credit cards, and the rest will take care of itself.

Be ruthless: these banks do not care one whit about you as people, you should not care about them beyond what they offer to do for you and what they want in return. Sit down once a year and evaluate: If a card deal that was good has gone bad, fire them.  Few things feel better in life than locating something that is not working for you and getting rid of it.