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Our search for the best reward credit card
By DaveM | April 2, 2006
Now that our credit card debt is consolidated onto a 0% interest Discover card, and our debt reduction plan is well underway, we decided a nice reward card was in our financial future.
With You Need A Budget (YNAB)as the new #1 weapon in our financial arsenal, we once again have the control that will allow us to use credit cards the way they should be used - as another tool to reach our financial goals.
So, with YNAB on our side, we decided to do a bit of research into which reward card would be best for our purposes. Basically, we want to get maximum float on the money in our checking & savings, consolidate all our bills onto one monthly statement, and get the maximum rewards available that we can redeem whenever we choose.
With so many reward cards to pick from, I gave myself a headache today reading all the fine print and trying to compare features.
Almost all of them nowadays are limited to around $300 max reward per calendar year. Some earn points redeemable for merchandise and/or cash and others earn straight cash back. Some are tricky in that you have to spend a certain amount each month on your card in order to get the full reward, and others require you to contact the company, either online or by phone, to redeem your rewards.
Chase and CitiBank are obviously two of the biggest players in the reward card game. Citi alone has 22 reward cards (as of this writing), and if I counted right, Chase has 20. Fortunately, Citi seems pretty liberal with the information they provide about each card, but you still have to spend some time reading so you don’t get stuck with a card you can’t use the way you thought you could. Chase, on the other hand, requires a lot more digging to get the same info (at least in my experience).
Just by reading the high-level information about each card, I narrowed it down to this short list:
- Chase Rewards Plus
- Chase Cash Plus Rewards
- Citi Dividend Platinum Select
- Citi Diamond Preferred Rewards
- Citi Simplicity Cash
- Citi Simplicity Rewards
Obviously there are MANY more out there, and you can Google for “reward cards” or something similar to see the rest. But all the others had something that caused me to quickly toss them out of the running.
Anyway, back to my short list…
I don’t believe Chase has a card that will allow you to earn over $300 per year in rewards, and Citi’s Dividend card is the same way. However, with Citi, if you use your card anywhere in their “merchant network” the cash-back rewards are unlimited. Of course, good luck finding a list of their participating merchants. 
For the dividend or “cash” cards, both Citi and Chase require you to call or go online to redeem your rewards - either in the form of cash or points.
Now, Citi recently started something they call their “ThankYou Network” where you can redeem reward points for merchandise or gift cards from a huge list of popular merchants. My wife and I looked through the list and found that we have shopped, ate, or spent money at almost every merchant. So from the standpoint of convenience and practicality, that was looking very promising.
The Citi rewards cards (Diamond Preferred and Simplicity) also allow you to accumulate 75,000 points in any given year. And since 5000 points equates to a $50 value, that means we could get up to $750 worth of rewards each year. Of course, that is assuming we would charge enough monthly expenses to reach that level, but at least we wouldn’t be limited to the $300 per year offered by the other cards.
The icing on the cake was that Citi Diamond Preferred and Citi Simplicity Rewards are both offering 10,000 instant bonus points when you make your first purchase within 90 days of getting the card. 10,000 points is the equivilent of a $100 gift card for free, and that’s nothing to sneeze at!
So, now that our list was narrowed down to the two Citi reward cards, we had to make a decision… The Diamond Preferred card offers 5% (5 points per dollar spent) on groceries, gas and drugstore purchases for the first 12 months (1% thereafter and on everything else). The Simplicity card offered the same, but only for gas and drugstore. It also offers no late fees as long as you make one purchase per billing cycle.
Essentially, those were the main differences I could see between the two cards. Since late fees aren’t an issue for us, we decided on the Citi Diamond Preferred Rewards card. I filled out the online application which took only 5 minutes, and now we just have to wait to see if they approve us.
Maybe by the time their 12-month/5% reward promo is up, a better reward card will come along and we’ll make a switch. Until then, we plan to pay for as many monthly expenses as possible on our new reward card and pay it off each month - with a little help from YNAB of course! We’ll then use the reward points to purchase gift cards for ourselves, or for our kids, family and friends when birthdays and other gift giving opportunities arise.
That should help ease up the gift category in our budget! 
April 14th, 2006 at 10:58 pm
Have you figured out how to redeem rewards for the Chase Perfect Card? It is impossible to figure out when I log in to look at my account online…
July 14th, 2006 at 4:24 pm
Damn, I never knew there were s many cards apart from citi and capital one. Card Gallery has the biggest selection of cards.