The Two Most Useful Credit Cards for the Average Person

Disclaimer: If you don’t pay off your credit card every month, rewards cards are useless.  This post is targeted to people that responsibly use credit and pay their statement balance in full, every month.  I know I say this a lot, but if this isn’t how you use your credit card, you should cut it up into pieces and throw it away unless you are jobless and require it for food.  Also, I am not a financial adviser, yadda yadda.

Without further ado, here are the two most useful credit cards for the average person in terms of benefits they offer.

The SallieMae MasterCard is the most used and most useful card in my wallet.  This card offers the most lucrative cashback options for me and probably for most people.  It is structured as follows:

  • 5% cashback on gasoline purchases, up to $250/month
  • 5% cashback on grocery store purchases, up to $250/month
  • 5% cashback on bookstore purchases, up to $750/month

How businesses are categorized (for all credit cards) is based on their Merchant Category Code.  Many cards that offer cashback on groceries have specific exclusions for stores like Target and Walmart.  This card does not, and it is based solely on the MCC.  This means that most Walmart Supercenters and Super Targets count for 5% cashback under the grocery MCC.  It also means that Amazon.com purchases count as 5% cashback under the bookstore MCC.

Most of my purchases are groceries, Amazon, and gas, probably in that order.  That means as long as I fall within those monthly limits, I always get 5% cashback on the majority of my purchases.

The points can be redeemed as statement credit, and they post pretty quickly to your account.  You don’t need to have a SallieMae student loan or to be a student or anything like that.  All you need is good FICO score, around 690 according to Doctor of Credit.  There are no annual fees.

The second most useful card in my wallet is the Citi Double Cash Card.  This card offers 1% cashback on all purchases and 1% cashback on all on-time payments, which means, effectively, this card gives you 2% cashback.  To boot, there are no limits to how much cashback you can earn every month/year.  There are very few cards out that that offer this level of cashback (only one other personal card that I know of).   The biggest downside to this card is that there is no sign up bonus at all, and you need to have excellent credit, the safest bet is probably in the mid 700s, but I’ve seen people get approved in the lower 700s as long as the rest of the credit report is pretty decent.

Most cashback cards – and probably most reward cards in general – come with benefits like extended warranties on things you purchase, so besides that and the cashback, this card comes with some additional great perks.  My personal favorite perk is Price Rewind, which basically lets you get reimbursed up to a certain amount (I think it’s like $300) if something you bought goes on sale within 60 days.  They even have a feature that can track prices for you and automatically/easily submit the claim, but it’s admittedly not very good at finding lower prices (you can submit prices yourself, though, so it’s all good).  Still, I’ve gotten an $8 credit from it.  And no annual fee.

Citi also offers damage and theft protection on your purchases for up to 120 days, so if you buy an iPhone, break it three weeks later, and don’t have AppleCare+, you can just submit a claim to Citi.  I haven’t used that benefit yet, or many of the others, but it’s nice to know they’re there.

So, those are the two best personal credit cards (for most people) in my opinion.  These are both, however, MasterCards, so I’d like to mention some runner-ups.  American Express Blue Cash Everyday is decent on rewards, but the real reason to consider this card is for AMEX offers.  I’ve only had this card for a few months and so far it’s saved me $180 in AMEX offers on things I was already purchasing, and gotten me about $25 in other random AMEX promotions.  AMEX also has accident protection for purchases up to 90 days.  My second runner up is the Discover IT card, mostly because they usually have pretty good 5% rotating categories, they have a great shopping portal where you can earn additional cashback at certain stores pretty easily, and their customer service is great.  I’ve gotten around $220 back with their Price Protection benefit, which is similar to Citi’s Price Rewind except there’s no automatic tracker, and it’s for 90 days instead of 60.

Shameless self-promotion: SallieMae and Citi don’t do referral bonuses, but if you happen to be interested in the AMEX or Discover cards I mentioned, comment below or Tweet/email/message me somehow and I’ll get you a referral link.  It would get me like $50 and you’d still get your regular signup bonus if one is available.

10-7-2015 edit:  Barclay stopped offering the Sallie Mae MasterCard.  They’ll probably remove the reward categories as well, but no movement on that yet as of this date.  It’s a real tragedy in the credit card world, but life goes on.

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