AMEX credit cards, any reason not to?

[MVal]

For those of you who credit card churn, maybe you can help me. I got an offer from USBank for an AMEX credit card that pays back 1.5% on everything. This currently beats my BoA Visa which pays 1% on everything except 2% and 3% respectively on groceries and gas. It will also pay $150 for spending $500 in 90 days and gives 12 months no interest. I've never had an AMEX and I know years ago not all places accepted it and sometimes they had weird fees and such, so I'm curious if this would be a good idea. I could transfer a couple of ACH regular charges for bills to it and probably hit the $500 in 90 days without any extra spending.

[Ron Scott]

This is actually one of those "it depends" questions, i.e., it depends how you spend.

I actually like the new Costco card: https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=Citi-costco-anywhere-visa-credit-card

[undercover]

My guess is that the BoA card is probably better for Mustachians since our largest purchases are gas/food. But it also depends on where you grocery shop -  Walmart/Target don't code as "grocery stores". You could churn for the bonus, but that's up to you.

[Rubic]

For those of you who credit card churn, maybe you can help me. I got an offer from USBank for an AMEX credit card that pays back 1.5% on everything. This currently beats my BoA Visa which pays 1% on everything except 2% and 3% respectively on groceries and gas. It will also pay $150 for spending $500 in 90 days and gives 12 months no interest. I've never had an AMEX and I know years ago not all places accepted it and sometimes they had weird fees and such, so I'm curious if this would be a good idea. I could transfer a couple of ACH regular charges for bills to it and probably hit the $500 in 90 days without any extra spending.

If $500 of regular spend is a reach for you, the $150 bonus isn't too bad.  I've had 5-6 Amex cards in the past 18 months and only a few places in the US would not accept them.

How much natural spend do you (or can you) put on a credit card each month?  If it's a few hundred dollars or less, then the 0.5% points/cash per month won't accumulate to much anyhow, so your best bet would be to maximize your sign-on bonus(es) per card.  I generally expect to get somewhere between $300-700 of points/miles/cash equivalents per card, with annual fee cards typically at the higher end of the range.  Most AF cards are deferred for the first year, so they can be canceled on their anniversary month with no fee charged to you.

[TomTX]

For maximum signup bonus per dollar: BoA Major League Baseball. $200 for $500 spend.

For maximum cash back for non-category/generic: Citi Doublecash (2%)

For Costco: Chase Freedom. 5% for the rest of the year, $150 for $500 spend

[MVal]

Wow, thank you for these great answers. So if you churn credit cards, do you ever any cancel them if you do not plan on using them in the future much?

[Choices]

Fidelity also has a 2% cash back visa if you have the rewards deposited into your Fidelity account. https://www.fidelity.com/cash-management/visa-signature-card

Capital One has a visa with 1.5% back on everything, plus a $100 bonus if you spend $500 in 3 months. https://www.capitalone.com/credit-cards/cash-back/?Log=1&EventType=Link&ComponentType=T&LOB=MTS%3A%3ALCTMMQC4S&PageName=Credit+Cards+Home&PortletLocation=4%3B16-col%3B2-1-2-1&ComponentName=New-cash-back-rewards-card-cchp%3B13&ContentElement=2%3BSee+Cash+Back+Cards&TargetLob=MTS%3A%3ALCTMMQC4S&TargetPageName=Cash+Back&referer=https%3A%2F%2Fwww.capitalone.com%2Fcredit-cards

As for AMEX, the stores I've run into who don't accept it are certain thrift stores and dollar stores.

[Rubic]

Wow, thank you for these great answers. So if you churn credit cards, do you ever any cancel them if you do not plan on using them in the future much?

With the exception of the business Chase Ink+, I cancel all of my cards which charge an annual fee -- or downgrade them when possible to a non-AF product, e.g. Citi Platinum -> Citi DoubleCash.

If the card doesn't charge an annual fee, I keep it open and make a minimal purchase on it every 6 months so the bank doesn't close it due to inactivity.

[terran]

My guess is that the BoA card is probably better for Mustachians since our largest purchases are gas/food. But it also depends on where you grocery shop -  Walmart/Target don't code as "grocery stores". You could churn for the bonus, but that's up to you.

But if that's the case then the Amex Bluecash everyday would be a better option since it reverses it to 3% grocery, 2% gas which is probably in better alignment with most people's spending than 2% grocery, 3% gas.

[Tiger Stache]

We have the Amex Blue Cash Preferred. You have to figure out if your spending in the categories outweighs the annual fee, but 6% grocery and 3% gas is pretty great. Also, the Walmart Market closest to our house codes as a grocery store.

[mskyle]

We have the Amex Blue Cash Preferred. You have to figure out if your spending in the categories outweighs the annual fee, but 6% grocery and 3% gas is pretty great. Also, the Walmart Market closest to our house codes as a grocery store.

We do the same - we had the Blue Cash Everyday for a while (which has no annual fee and but 1/2 the rewards), and when I sat down and did the math on how much we spent on groceries it made more sense to pay the $75 annual fee and get more rewards, so I called and converted the card to the Blue Cash Preferred. It is the only card with an annual fee that we keep (we're very casual churners - one or two new cards per person per year).

In addition to some Targets and Walmarts being coded as grocery stores (even if you're not buying groceries) you can also buy gift cards at a lot of grocery stores and get 6% back on non-grocery purchases that way. You have to be careful, though, because sometimes the way a store gets coded changes - we stocked up on liquor at our neighborhood market/garden center, which had been coded as a grocery store last time we shopped there, and it was coded "home improvement/garden."

[HPstache]

I think one of the most annoying features of the Amex cards is the places that tell you, "Sorry we don't take that here".  I'd say its about 1 in 10 around here...

[Eric]

I think one of the most annoying features of the Amex cards is the places that tell you, "Sorry we don't take that here".  I'd say its about 1 in 10 around here...

That's because AMEX fees are a lot higher than Visa or MC, so vendors choose to accept the most popular cards as they're cheaper and skip the less popular and more expensive AMEX.

[Northwestie]

I think one of the most annoying features of the Amex cards is the places that tell you, "Sorry we don't take that here".  I'd say its about 1 in 10 around here...

That's because AMEX fees are a lot higher than Visa or MC, so vendors choose to accept the most popular cards as they're cheaper and skip the less popular and more expensive AMEX.

.........and more so travelling overseas.

[acroy]

We have the Amex Blue Cash Preferred. You have to figure out if your spending in the categories outweighs the annual fee, but 6% grocery and 3% gas is pretty great. Also, the Walmart Market closest to our house codes as a grocery store.

^^ this; we max out the 6% benefit every year.

[Enigma]

I use a USAA Cashback Rewards Plus AMEX that gives me 5% cash back on gas and 2% cash back at grocery stores.  I use it exclusively at gas stations and grocery stores.

Getting the card dropped my credit score within the categories of 'Age of Credit' and 'Credit Inquiries'.  I couldn't imagine constantly getting and dropping cards.

[Rubic]

Getting the card dropped my credit score within the categories of 'Age of Credit' and 'Credit Inquiries'.  I couldn't imagine constantly getting and dropping cards.

I've applied and been approved for 16 cards in the past 18 months.  My credit score is somewhere between 770-810, depending on which bureau is reporting.  The number of credit inquiries obviously lowers my score slightly, but it has a low impact and will gradually drop off (~2 years for each card).  Similarly my "Age of Credit" is lowered by applying for more cards, as the newer cards reduce the average. I already had open accounts with 10-18 years of history, so its effect wasn't as pronounced as someone who might be recently establishing a credit history.

When I stop churning, my scores will gradually increase (probably ending higher than when I started churning), but my scores are already high enough that I don't have any issues, i.e. I've never had a credit application declined.

[HipGnosis]

We have the Amex Blue Cash Preferred. You have to figure out if your spending in the categories outweighs the annual fee, but 6% grocery and 3% gas is pretty great. Also, the Walmart Market closest to our house codes as a grocery store.

I have AmExp Blue Cash. 
My WalMart market codes (I didn't know that was the term) as a dept. Store.  So does Miejer - they're just moving into the area but moving in in a big way. Target doesn't have enough grocery items for me to go there.
Thankfully Aldi takes AmExp now.

[HipGnosis]

My guess is that the BoA card is probably better for Mustachians since our largest purchases are gas/food. But it also depends on where you grocery shop -  Walmart/Target don't code as "grocery stores". You could churn for the bonus, but that's up to you.

You make it sound like a 'one or the other' decision.  It is not.  I got a handheld label maker - I put the categories right on the cards.

[TomTX]

Wow, thank you for these great answers. So if you churn credit cards, do you ever any cancel them if you do not plan on using them in the future much?

I haven't done concerted churning, I periodically will get another card or two. It's been ramping up the past year. I haven't canceled, but the only annual fee card I have gives me a free annual hotel stay (which I use when we travel) and platinum status in their club for perks when I stay.... so, no reason to cancel that either.

However, I have an absurdly deep credit history. The average of my oldest 3 credit lines is 20+ years.