How These 3 Credit Cards Became Way More Valuable During the Pandemic
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To say the pandemic has changed the way we spend is an understatement. Restaurants, airlines, and entertainment venues around the world have felt the sting as consumers struggle to adapt to quarantines, closures, and remote working.
Credit card enthusiasts who've spent the last few years building the perfect combinations to maximize their travel rewards have had to think again. The inability to safely redeem all those points and miles has made them reconsider their cards -- and all those high annual fees.
Travel card issuers have jumped in with limited-time bonuses and offers. But some of your everyday standby cards don't need bonus offers. Some have increased in value simply because of the changes in your spending.
Here are three cash back cards that have earned pride of place in our wallets this year with extra rewards on stay-at-home-related expenses.
1. Blue Cash Preferred® Card from American Express
The Blue Cash Preferred® Card from American Express has always been a solid cash back rewards card -- it's been in my wallet for years. And the card has quickly become one of the best lockdown credit cards to have on hand. Take a look at the card's rewards categories to see why it's so useful:
- 6% cash back on grocery store purchases (capped at $6,000 each year)
- 6% cash back on select streaming services (includes most popular music and video services)
- 3% cash back on transit (includes taxis, rideshares, parking, trains, etc.)
- 3% cash back on gas
- 1% cash back on everything else
Unless you're stuck paying for parking in big cities, the transit and gas categories are unlikely to get as much use now as they did pre-COVID. But it's fair to say most of us are buying more groceries and eating out less. And, of course, plenty of us are stuck at home and streaming everything under the sun.
At a rate of 6%, a weekly grocery bill of just $50 could net an extra $150 per year in cash back. Families that spend around $115 a week could easily hit that $6,000-per-year cap. At 6%, that would earn $360 in cash back on groceries alone. If you add in the rewards from half a dozen streaming services, the Blue Cash Preferred® Card from American Express more than makes up for its $95 annual fee.
2. U.S. Bank Cash+™ Visa Signature® Card
Another worthwhile pick even pre-pandemic is the U.S. Bank Cash+™ Visa Signature® Card. It's definitely increased in value as we've transitioned to working (and learning) from home. The card's unique rewards structure includes 5% cash back on up to $2,000 each quarter in two categories that cardholders can choose.
While some of the card's 12 bonus category options aren't particularly useful right now, a few choices may have grown in value:
- Home utilities
- Cell phone providers
- TV, internet, and streaming services
- Select clothing stores
- Department stores
Many utility bills have increased as people run computers, televisions, and air conditioners all day long. And depending on your area and lifestyle, your cell phone may be doing double duty. For some people, it's become their home internet source, entertainment system, and general lifeline to the outside world.
As for the last two, well, who hasn't felt the need to tweak their work-from-home wardrobes the last few months? Non-elastic pants are so 2019.
This no-annual-fee card lets you activate your chosen categories every three months, so you can adapt your choices to your current spending habits. That versatility is advantageous in these uncertain times.
3. Bank of America® Cash Rewards credit card
If the idea of picking your own bonus categories appeals to you, the Bank of America® Cash Rewards credit card is worth a look. It lets you choose your own 3% cash back category from a list of six options and also comes with no annual fee.
These three may be extra appealing during the pandemic:
- Home improvement stores
- Online shopping
- Drug stores
You'll also earn 2% cash back at grocery stores and wholesale clubs year-round. Bonus rewards are capped at the first $2,500 in combined 2% and 3% purchases per quarter.
With limited entertainment options, many of us have turned to home renovation projects and new hobbies. As such, the local hardware store has become an extra-essential business. And, of course, the online shopping and drug store categories speak for themselves.
Unlike many similarly structured cards, the Bank of America® Cash Rewards credit card lets you change your chosen category once a month, giving you even more rewards flexibility.
Rethink your go-to credit cards during the pandemic
This time last year, many folks were plotting their holiday travel, dreaming of summer vacations, and socking away points and miles. Now, most of us are simply trying to make it through one day at a time.
As annual fees for our pricey travel rewards cards come due, we have to make hard decisions about which cards to keep -- and which to chuck or downgrade. If your credit cards are not pulling their weight, consider adding these valuable rewards cards to your wallet instead.
Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.
But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.
That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.
The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.