Which Rewards Credit Card is Right for You?
The credit cards you carry with you every day should reward you highly for your spending. As an optimizer of your finances, it wouldn’t feel right any other way. The set of cards in your wallet should be a reflection of your spending in order to maximize rewards and fund your goals as soon as possible. To maximize your rewards potential, it’s all about trying to find the perfect credit card, or two, for you.
As a real estate investor, you have the opportunity to explore both personal and business cards for the perfect fit. With plenty of options, you should be able to find the right to fund your daily expenses as you build your real estate empire quickly.
Let’s dive into finding the best daily use card for your wallet!
How to Find the Best Rewards Card as a Real Estate Investor
If you are beginning your credit card rewards journey, then the details can seem overwhelming. We’ve got you covered! We will break down the steps each beginner should take the find the perfect card for you.
Review your past spending
As with most things, you need to understand the past before you can move forward into the future. You need to learn where you spend your money in terms of credit card categories.
Typically, credit cards will reward your spending in various categories. You may earn extra points for purchases in a specific category. A few examples of categories include groceries, gas, home improvement, travel, and dining.
If you aren’t sure where you have spent money in the past, then you have a few places to start your search.
Explore your existing card’s annual review to analyze your spending categories.
The easiest place to find this information is through your current credit card’s annual review feature. Many cards will break down your spending by category for you.
Other options include any budget tracking software you may use. For example, you may use Mint or YNAB to track your expenses. This can easily show your spending by category. Additionally, you likely have your real estate expenses neatly tracked somewhere. Pull out that information to include in the mix.
This process may be more difficult if you mostly spend in cash. Although it may be difficult, it is still important to at least make an attempt to determine your spending categories.
Match up your spending with rewards categories
Once you have a handle on what categories make up the most of your expenses, it is time to find the perfect card. Different cards reward your spending differently. Find the card that most highly rewards your most expensive category.
Here are a few cards to help start your search:
- Chase Sapphire Preferred. The Chase Sapphire is a popular credit card among travelers. The card rewards your travel spending with 2x points on travel. If you spend a large portion of your budget on travel, then this is a great card to have in your wallet.
- Blue Cash Preferred from American Express. This Amex is perfect for anyone that spends big at the grocery store. The program offers a high 6% cash back at US supermarkets for up to $6,000 each year. If you have a growing family with a big appetite, then this is a nice option.
- Lowe’s Business Rewards Card from American Express. As a real estate investor, you likely spend some amount of money at home repair stores like Lowe’s. The card seems attractive with 5% off at Lowe’s plus 2x points on all Lowe’s purchases. However, veterans can shop at Lowe’s with 10% and other investors can buy a 10% off coupon on eBay without the card. So the savings offered by the card can be found in other ways and the spending could be better rewarded by another rewards program. Luckily, there are better options on the market.
- American Express Business Gold Card. With this card, you can earn 4x points on the top two categories where you spent the most money that month. If you are spending more on travel in one month and renovations the next, you will be rewarded equally for these larger expenses.
- Chase Ink Business Preferred. You can earn 3x points on select business expenses with this card. One of those categories is online advertising. If you spend money to advertise your rentals on social media or use online marketing in any other way, you can earn 3x for each dollar spent. It is a great deal if you regularly spend money on advertisements.
Each of these cards offers attractive rewards for different types of spenders. After accessing your spending over the past year, you will have a better idea of which card is best for you.
Weigh the annual fee
Most premium rewards cards have an annual fee. Although some waive that fee in the first year, eventually you will have to pay the fee unless you cancel the card.
Before you sign up for a card, run your spending from the previous year against the rewards program to see how many points you would have earned. Next, determine what those points are worth in terms of redemption value. Compare the expected redemption value with the annual fee. Make sure that the expected value of those points is higher than the annual fee. Otherwise, the card may not be the best fit for your spending habits.
Apply for the card
Once you find the perfect card, it is time to sign up! Whether you decide to take on the Chase Gauntlet or start with your favorite airlines’ credit card, it is important to take action today. You might be surprised how quickly your rewards add up.
The bottom line
The right rewards credit card is out there for every real estate investor. In addition to travel rewards, there are many other attractive offers. The key is to find the best fit for your spending habits in order to get the most value out of your spending. If you enjoyed this article, be sure to check out this other article in our credit card reward series: https://fibyrei.com/the-chase-gauntlet-the-best-rewards-cards-to-start-with-first/
In 2018 FI by REI was created with the purpose of helping individuals that want a better life. We share articles on personal finance, house hacking & real estate investing, and more.