There is value in having a cashback card in your wallet. Miscellaneous travel expenses can turn a “free” trip into one that puts a dent in the budget and it’s nice to have rewards that you can use to pay for them. There are also things that you can’t pay for with miles, such as a stay at a foreign chain hotel or for a train ticket. Until recently, you had to pay an annual fee for a card that earned 2% back for all of your purchases and those cards only earned cash, no chance to transfer the rewards to external travel programs for additional value.
The first 2% back card I signed up for was the Barclaycard Arrival+.
While the card is no longer available to new applicants, at the time, it was paying a 70,000 point sign up bonus worth $700. You can use the points to pay for travel expenses over $100. Redemptions also earn a 5% rebate, so the actual earning rate is closer to 2.1% if you’re able to use almost all of the points.
I paid the annual fee for the card at the first renewal because I have points to spend and I wanted to keep on the right side of Barclays, a notoriously stingy bank when it comes to approvals. I think our semi-regular use of the Arrival+ card helped Sharon get approved for the JetBlue Plus card, her THIRD card from them.
However, the renewal date is approaching and I have to ask if it’s worth paying the $89 annual fee. Since we signed up for that huge bonus, there have been numerous changes in the credit card world and most of the competitors come without an annual fee.
I’ve applied for other cards that could easily take the place of the Arrival+ in our wallets and there are even more options available by product change or new applications. Most important, none of these cards have an annual fee.
Fidelity Rewards (2%)
The Fidelity Rewards Visa card earns 2% cashback. I can deposit money directly into my Fidelity account once I’ve made $25. While earning 2% back is great, there are even better options out there.
Citi Double Cash (2% to 2.66% and higher)
The Citi Double Cash is designed to be a straight 2% cashback card. In practice, you earn 1% on spending and 1% when you pay the bill but I hope everyone who is earning points and miles with credit cards is paying off their bills in full every month. Just recently, there is a new way to use your Double Cash points to earn up to 2.4% back when redeeming them for gift cards (check out this post from Frequent Miler for the details.) You can get more value for your points if you have either a Citi Premier or Citi Prestige card. Since Citi lets you transfer points between accounts, if you have one of these other cards, you can transfer your points to one of Citi’s partners. I’ve transferred ThankYou points to Flying Blue, JetBlue and Singapore KrisFlyer and it would be easy to get between a 3% to 5% return with these redemptions.
While this is a great option, there’s an even better one if you can get it.
Freedom Unlimited (1.5% to 6% and higher)
The Freedom Unlimited card from Chase was already valuable when you earned 1.5% back on all purchases. Chase just announced that this card would start earning 3% back on dining and drug store purchases. New applicants also get 5% back on groceries for the first year. The base level of earning with the card is good, but I think the potential upside of the card is the best of the pack. Unfortunately, many people are shut out from getting this card due to Chase’s 5/24 rule.
You can unlock additional value if you also have a premium card from Chase like the Sapphire Preferred. Chase allows you to combine points from all of your accounts. Once attached to a premium card, you can use them to “Pay Yourself Back” at a value of 1.25 or 1.5 cents per point. You can also make bookings through the Chase Travel Portal. But most importantly, you can transfer points to one of Chase’s travel partners. I’ve transferred points to Hyatt for a value of 1.6 to 2.5 cents per point. I can’t even begin to put a value on the points I transferred to Singapore KrisFlyer to book us on a flight from JFK-Frankfurt.
When push comes to shove, I think the two Membership Rewards points per dollar that the AMEX Blue Business Plus earns is the best deal out there. I’ve left it out of the list because it is a business card. If you have a business, this is the best card for any expense that doesn’t earn an additional bonus with other cards. This is a personal choice because I find AMEX’s transfer partners to be better suited to our travel needs. The Blue Business Plus card also earns fully transferrable points with no annual fee. No need to have a premium card to unlock the full value of the points like is necessary with Citi or Chase.
Sometimes, writing a post is just my way of working through things swirling around my head. I’ve been wondering if keeping the Arrival+ is worth it. The benefit of earning 2% back isn’t such a big deal since I already have two other cards that earn at least as much with no annual fee. Maybe we’ll try to get a retention offer from Barclays. If they’ll waive the fee or give us a spending bonus, it would be worthwhile to keep it. Otherwise, I’ll try to find a way to put enough travel charges on the card to use up our points before the fee is due.
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This post first appeared on Your Mileage May Vary