Cost-benefit analysis of credit cards

As year-end approaches, I downloaded the transaction history for my credit cards to analyze the costs and benefits.

American Express Platinum Card

I have a love-hate relationship with the American Express Platinum Card. The $695 annual fee is quite expensive. The benefit structure and limited-time offers are so complicated that it is hard to optimize. I thought about cancelling it before, but now I realize there are quite a few useful benefits, so I intend to keep it for the foreseeable future.

This card earns 5 points per dollar spent on flights or hotels booked through American Express Travel, and 100 points can be redeemed for $1 toward future bookings. For any other purchases, you earn 1 point for each dollar spent. Obviously, I mainly use this card to book flights and hotels, and not much else.

There are many other benefits. The ones that I find particularly useful are:

• $200 Uber credit ($15 per month from January to November, then $35 for December)
• $200 hotel credit on prepaid Fine Hotels + Resorts or The Hotel Collection
• Global Lounge Collection (access to Centurion Lounge, Delta Sky Club (when flying Delta), Priority Pass, etc.)
• free enrollment to Global Entry and TSA Precheck
• free enrollment to Clear
• free Gold status at Marriott Bonvoy and Hilton Honors

This year, I received $1,627 of various credits for the $695 annual fee, which is not that bad. As I often fly between San Diego and Atlanta, being able to use the Centurion Lounge (in E terminal) or Delta Sky Club (in every terminal) at Atlanta Hartsfield-Jackson airport is really useful, because it allows me to have a free meal and drinks before the flight. (In contrast, the value for using the Aspire Lounge at San Diego is not that high, as food and drink selection is limited.)

On a separate note, at most airports, using the TSA Precheck + Clear line gets you through security fastest, but at Atlanta, using the TSA Precheck + Digital ID line is faster because people are funnelled through more lanes.

American Express Blue Cash Preferred Card

The American Express Blue Cash Preferred Card is a great card, and I have kept it since 2010. With an annual fee of $95, it gives 6% cash back on groceries and 3% cash back on gas. I use this card only for groceries, since the gas rewards are dominated by the Citi Costco Anywhere Visa Card discussed next.

This year, I received $557 cash back, which easily justifies the annual fee.

Citi Costco Anywhere Visa Card

By paying the $130 annual Executive Membership at Costco, the Citi Costco Anywhere Visa Card gives 4% cash back on gas and EV charging, 3% on restaurants and travel, and 2% on Costco purchases. I mainly use this card for dining out and shopping at Costco, as well as miscellaneous travel not reserved through American Express (hotel, public transportation, etc.). Note that rideshare and parking do not count as travel. (I confirmed this because my recent statement said I had $0 spending in travel, despite the fact that I am using this card for Lyft. I will have to change the payment setting.)

This year, I received $484 cash back, which easily justifies the annual fee. Note that the 2% cash back on Costco purchases is separate from the 2% reward certificate for the Costco Executive Membership. Therefore, the cash back at Costco is actually 4% (see page 8 of this document), making this card very attractive for Costco members. The downside of this card is that rewards certificates are sent only once a year, so rewards get eaten by inflation and miss interest.

Chase Amazon Visa Card

The Chase Amazon Visa Card has no annual fee and gives 5% cash back on Amazon purchases. This is a great card that I have kept since 2008.

Fidelity Rewards Visa Signature Card

The Fidelity Rewards Visa Signature Card is amazing. It has no annual fee, no foreign transaction fee, and offers 2% cash back on all purchases. I use this card for everyday purchases other than travel, groceries, dining, gas, Costco, or Amazon, as well as for miscellaneous expenses during international travel. What I also like about this card is that the 2% cash back is automatically credited to the Fidelity Cash Management Account every month, which pays interest close to the Federal Funds rate, so the rewards program is very transparent and efficient.

This year, I received $994 cash back, making it the most cost-effective card.

Chase Marriott Bonvoy Boundless Card

When I was young (and poor), I used to search for hotels at Expedia or other travel sites to find good deals. But as I got older (and richer), my time and a good night’s sleep have become more important, so unless I find something attractive through American Express, I just go for Marriott. With an annual fee of $95, the Chase Marriott Bonvoy Boundless Card gives a free night (which is easily worth more than the annual fee) and points. However, I don’t use it that often, so I may cancel it at some point.