Chris

We’re a family of 4 and we easily max out the benefits($300 per card) from 2 dividend cards over the year. Well, 600 bucks for buying needed groceries and gas is pitiful. I think we would save a lot more by not buying the groceries and gas.

Chris Yeh

Ramit,

You know I love you, but I think you failed to do the math here.

25,000 miles = $25,000 spent.

The value of your ticket was $600. That means that the imputed cashback % was 2.4%.

For your groceries and drugstores and gas, you’d still be better off with 5% back.

Cap

it’s all about what cards work for you. 5% back from gas & grocery via the popular citi dividend is hot, it’s hardly a joke. as mentioned, most people spend enough to qualify for the $300 per year for stuff they’ll buy already.

I can’t imagine paying almost $400 for the amex plat card, but for a lot of people, the benefit pays for itself within a few use.

Paul Kerl

For college students (if you only want one card)–the MTVu card is quite good.

5 pts/dollar on purchases at bookstores, 25 pts for paying your bill each month, and bonus points for having good grades. Those are all good incentives.

If you JUST use it for books (like me), it’s a nice perk to just recieve points having the card sit there doing barely anything (which works well when you’re trying to save money all the time).

Just don’t fall into the trap of spending (even marginally) MORE money to get points…

Anon

Not to pile on, but I get back between $500-$1000 a year on the “joke” cards. Tip: all purchases at a Wal-Mart Super Center are counted as groceries as long as at least one grocery item is on the receipt.

Tim

Another vote for the 5% gas/supermarket card is great. I don’t know what your friends are buying to make these cards “pitiful” but I definetly see the payback. No fee’s and 5% (not 3) and 1% on everything else is worth it by far.

Jared Goralnick

Hi Ramit,

I have to strongly disagree on this one… the percentage one receives back on points/mileage cards is almost always close to 1%; you’re lucky that you got yours higher. But where the real catch is that that 1%-3% you get back goes toward purchasing something at RETAIL COST, be it flights or electronics or whatever. I used to use the AMEX Rewards but realized that the $50 XYZ I was buying could be had online for $30…and I would’ve been better off just getting cash. (So I ended up cashing in for gift certificates and buying stuff when it was on sale at those stores).

Since then I’ve switched to Chase Rewards (5%/1%) card and I get close to whatever their maximum is–I think 300 or 400 per year, then I have another couple cards I use for certain business related expenses and make roughly the same on each. To me, that’s found money.

And to agree with other people here, I used to use frequent miler cards…but it’s really difficult to redeem those miles. I’d much rather have flexibility to fly when I want at a good price.

One last tip: if you get a rewards card and want the same psychological benefit of the points cards (i.e., noticing that you’re saving money), consider using a card that mails you a check when you request it (like Chase Rewards) so you SEE the real rewards as opposed to just getting it deducted from every pay cycle–in which case that $30/month or so just gets ignored.

Best of luck,
Jared

Ramit Sethi

5,000 miles per person who signs up (max of 5 people).

Jeremy

I used a United Airlines card during my first few years out of school. During that time I spent enough money (furniture, electronics, travel) to make the annual fee worthwhile. All my spending plus a few trips earned me two tickets to Hawaii.

Now that I don’t spend or fly as much, I’ve switched a pair of cash back cards. My Citibank card gets 5% back from gas, groceries and drug stores. I also have a Chase card with 1% back on all purchases and no annual limit, which I use to buy everything else. While I don’t earn miles anymore, I just buy cheap flights that I couldn’t get with miles anyway.

Joel

The best card (or best mix of cards) depends on a person’s spending patterns — especially how much they spend in each category (e.g. gas, restaurant, home improvement, utilities, etc.). I recently went through this analysis due to changes in the terms of the Citi Dividend card. That analysis inspired me to build a general-purpose tool that anyone can use to find the best cash back card (or cards) for their spending pattern. As far as I know, this tool is currently the only one of its kind.

You can see the tool at http://www.creditcardtuneup.com/.

+Joel

Edmund O

Well the premier pass elite is a great and one of the best you can get if and only if you fly. As you get points for the money spent to purchase the ticket, and earn points for every miles you fly. You can double earn your points, imagine, you have Northwest perks mile + thank you points just for flying. For my gf and I, we usually fly back to Malaysia once a year, and one round trip will give me around 8,000 points plus the airline’s own milleage points. I have to agree, for everyday purchases, i will use my dividend 5% cashback, but keeping one Premier Pass for flying is good. So far, i havent seeen any credit card other than Premier Pass that gives you points for every miles you fly… if you know of one, please let me know… =)

Rich

Hi Ramit, Thanks for the tip on this card. We were looking for a new c-card to keep all our purchases separate for a new condo we recently purchased. The Citibank Premier Pass Elite card now offers the companion ticket when you buy Coach class round-trip for $299 or more, and since we travel often, that’s great… And your readers might also want to know that it doesn’t restirct to any airline, as it lets you “Travel on Any Airline with No Blackout Dates.” And you also earm points for miles travelled on Any airline.

I too would be interested in hearing about your own experience with redeeming points for airline tickets, if you’ve encountered any “gotchas”? Or if it’s been smooth sailing.

Vinny V

Ramit, have you ran across a better card than the ‘Citi PremierPass® Card – Elite Level’ since you wrote this post (and included it in the book)?

I’m primarily interested in the free companion tickets and free lounge access at airports offers.

Thanks in advance.