Best Credit Cards for Low Spenders 2020

hey I'm Adam Jessica problem money.com in this video we are look at the best at credit cards for low spenders people that don't put a whole lot on to their credit cards every month but before we do that I'm gonna ask you to please subscribe to this YouTube channel if you have not already and if you have already I thank you for doing so so I just did a video the other day about the best credit cards for big spenders people that are putting a lot of charges on their credit cards each month and someone said hey can you do that same video for low spenders people that don't put a lot on their credit cards every month and so here we are so as we look at credit cards for low spenders the strategy is going to be very different than the strategy for big spenders number one if you are a big spender well then you look at cards that have an annual fee because you're gonna put so much on those cards and you're going to get enhanced rewards that are going to make it worth it you're gonna make more and make up that annual fee in the enhanced rewards you get if you're a low spender on the other hand you do not want to pay an annual fee because you're not putting very much on that card so you're never going to be able to get enough in rewards to make up for that annual fee that you pay number two is sort of related to number one big spenders are going to put a lot of money on their cards every month so the rewards that they get every day are going to be as important or maybe even more important than the bonuses they get as new card holders for low spenders it is the opposite you're not putting a lot on that card so the everyday rewards are not nearly as important as the new card holder bonuses that you can get the new card holder bonus is going to be crucial to maximizing your value number three as a low spender you really shouldn't be looking at travel credit cards because you're not going to do enough purchasing every day to earn enough miles or Hotel points to really be able to redeem them very often so it doesn't make sense to go after those cards plus the best cards in those areas are going to have annual fees and they really are made for the people that spend a lot so no annual fee cash back big bonus on the front end that bonus cannot be emphasized enough if you are a low spender and you get a credit card that has a decent bonus on the front end you might make as much from that bonus that you got on the front end as you would make in your everyday rewards for the first two years of having the card so it's very important if you don't spend very much that you do well on that front end so we are gonna do a couple card comparisons here so I can prove to you that I'm right okay so there's obviously no set definition of what a low spender is for purposes of this video I am going to say that a low spender is someone that spends on average $300 a month $3,600 per year on their credit card if you spend less than that you're going to do even better if you pay attention to the credit card bonuses if you spend more than that a lot of this advice is still going to ring true at least up to five thousand dollars for sure per year if you're getting beyond five thousand dollars per year then it could get a little more complicated but even up to ten thousand dollars per year you could take this advice and still do pretty well for yourself all right on to the math so we are going to look at cards over a three-year period so we're going to look from the time you get a card and go through three years and we're gonna be looking at it at that low spend of $3,600 per year we're gonna start with the chase freedom unlimited because it is an excellent example of what I am talking about so the chase freedom unlimited is going to give you 1.5% cash back on all your purchases with the card and it also has as I'm making this video a two hundred dollar bonus opportunity for new card holders if you spend five hundred dollars with the card in the first three months of having it so over a three-year period spending thirty six hundred dollars per year you're going to spend a total of ten thousand eight hundred dollars over that three-year period what are you going to get you're going to get that two hundred dollar bonus that you got on the front end and then you're gonna get one and a half percent on that ten thousand eight hundred dollars which comes out to one hundred sixty-two dollars put them together you have made three hundred and sixty-two dollars or gotten three hundred and sixty-two dollars back on your ten thousand eight hundred dollar spent so it's a three point three five percent return on your ten thousand eight hundred dollar spent over those first three years on a no annual fee card that you don't really put a lot of - you're really not going to do any better than that anywhere else maybe you could do a little bit better but if you're looking at cards that have a higher everyday reward and thinking oh that card is better but they don't have a good upfront bonus well then they're probably actually going to be worse and I'll give you one comparison that will easily show you this so that card that we're going to compare to is the city double cash card a card that I talked about positively in many videos for people that spend more on their cards it gives you two percent cash back on all your purchases one percent when you make you purchase one percent when you pay off that purchase effectively two percent flat cash back on everything two percent is better than the 1.5 percent that the chase freedom unlimited gives you but except in very rare occasions the city double cash card does not offer a new card holder bonus so as a low spender that is not a good thing for you say you got the city double cash card with no bonus and you spend that thirty six hundred bucks per year over that same three year period that we talked about you spend ten thousand eight hundred dollars you get two percent cash back on all of it you are only going to earn two hundred sixteen dollars that Chase freedom unlimited was giving you three hundred sixty-two dollars over that same period of time a 146 dollar difference that extra half percent that you got from the city double cash really didn't do a whole lot because you don't spend very much on an everyday basis over a three year period you only earned fifty-four more dollars with the city double cash than you would have with the chase freedom unlimited when we compare that 2% return to the 1.5% return however with no bonus on the city double cash and a two hundred dollar bonus on the chase freedom unlimited you're gonna come out way ahead on that chase freedom unlimited though this doesn't mean that the chase freedom unlimited is necessarily the best choice for you as someone that has a very low spend but it is a very good starting point to look at however there are a handful of other cards that are right around the same range or that maybe you could even do a little better with one of them is the blue cash every day card from American Express this card also has a two hundred dollar bonus although you have to spend a thousand dollars in those first three months to get it but you should be able to spend a little extra and get yourself there on an everyday basis it's going to give you three percent back on your grocery store purchases two percent back on us gas station purchases two percent back on select department store purchases one percent back everywhere else so depending on what your spend is in an average year it's possible that the spending in those enhanced categories could get you to a place where on average our overall you did a little better than that one point five percent that the chaise freedom unlimited did and you'd have that same $200 bonus so you could make a case that this would be a better card for you although it's probably not going to be hugely different another to consider is the Bank of America cash rewards card a card that also has a two hundred dollar bonus if you spend a thousand bucks in the first three months of having in terms of everyday rewards you get three percent cash back in a category of your choice from a list of things I gas restaurants online shopping and some other stuff as well you also get two percent back on grocery store and wholesale club purchases one percent back everywhere else so between that two hundred dollar bonus and the everyday rewards maybe those everyday rewards depending on how you spend could get you a little bit better than that 1.5% from the chase freedom unlimited but probably not a lot and maybe even a little less depending on what your spending patterns are but another card to consider same bonus and probably a wash in the everyday rewards that you would earn fake America also has its travel rewards card which I said we're gonna stay away from travel rewards but this may be an exception it's a no annual fee card that gives you a twenty five thousand point bonus if you spend a thousand bucks in the first three months which equals two hundred and fifty dollars toward travel you would then earn also one point five points per dollar everyday on your other purchases with the card so similar in some ways to the other cards you're actually getting potentially a bigger bonus but you can only use that bonus toward travel purchases so you'd have to put the travel purchases on your card and you would have those credited back to you the 1.5 points per dollar every day is going to be equal to one and a half percent cash back so every point is worth a penny with this card the 25,000 point bonus $250 so it's really almost like a cash back card in which you can only use the cashback that you've earned travel purchases so I really look at this as completely as a travel rewards card but anyway it kind of fits the mold of what we're talking about a little bit better bonus here but you're going to only use a tour travel and then of course the 1.5 points every day equal to that one and a half percent of the chase freedom unlimited and then finally I'll mention the Wells Fargo propel American Express card another card that offers you what is essentially a two hundred dollar bonus if you spend a thousand dollars with the card in the first three months of having you're actually gonna get twenty thousand points which equals two hundred dollars if used for cash back on an everyday basis you get three percent back on a number of different categories gas restaurants most travel and some other things as well and then one percent back on anything that doesn't fall into those is a pretty strong card that I talk about a lot in other videos as well again as we look at it against the chase freedom unlimited or against any of these other cards it depends on what your spending is as to whether you would you know really do any better than 1.5% back just on everything with this card but essentially the same 200 dollar bonus and then some pretty nice three percent categories maybe a wash with 1.5 percent when compared with 1.5 percent or maybe you could do a little bit better picture that Wells Fargo propel is not the last card I'm going to mention I forgot to mention the other Chase Freedom Card the original Chase Freedom Card which also has a two hundred dollar bonus opportunity but instead of the 1.5% cash back on everything you get five percent cash back on certain purchases in certain categories that change each calendar quarter so every three months there are new purchases where you can potentially get 5% on those purchases but you're only going to get 1% back on everything else so if you can really maximize those purchases that is a card that could potentially get you more than the chase freedom unlimited would daily basis but the same bonus so again kinda similar could be awash with the chase freedom unlimited maybe you could do a little bit better with the original Chase Freedom Card now so far what I've talked about is each one of these cards sort of in relation to the other but I think ideally if you are a low spender what you really would want to do is get multiple cards to get multiple bonuses and to take advantage of the very best of each card as far as the everyday rewards go so if you have multiple cards and you get those multiple bonuses and you're getting you know 1.5% of everything but maybe a little bit more on some other purchases well that would really be the ideal and that's probably what most people would want to build toward obviously you have to start somewhere so here is a scenario that I could see doing if I were someone that didn't spend a lot but I wanted to maximize what I could get out of these cards number one I would start with that chase freedom unlimited get that $200 bonus and have 1.5% cash back coming on everything I buy once I had that cart established probably the next one I would go after would be that Wells Fargo propel American Express card again I could get a 200 dollar bonus and now I have added some three percent categories in there as well so now I'm getting three percent on gas and travel and restaurants and then I can still use my chase freedom as a one and a half percent on everything else it doesn't fall into those categories after I have those two cards maybe I would add the Bank of America cash rewards card and get that three percent cash back on online shopping and two percent back on grocery store purchases so now I have three percent and 2 percent and then 1.5 percent on everything else so I have a lot of different ways that I can make at least 1.5% but now I'm getting 2% and 3% on a lot of things as well and then finally I could add that original chase freedom cart that is going to give me those 5% opportunities here and there as well again I could get that $200 bonus as a new cardholder and then I got that 5% and I got 5% and some things I got 3% and some things I got 2% on some things and they still as a base have 1.5% cash back on everything else that I purchase now it would be very nice to get all four of those cards and 800 dollars in bonuses and have all of those things but you don't want to go willy-nilly after four cards at once now how fast you get credit cards is obviously up to you but the shorter your credit history is the less likely it is that you're going to be approved for multiple credit cards in a very short period of time and doing so can hurt your credit score so it's not really advisable if you have a short credit history if you have a longer credit history well then you can move a little bit quicker so if you have almost no credit history I would say you probably should be doing this over a longer period of time maybe only once a year that you're adding that new card maybe once every six months depending on you know how your overall credit picture looks maybe have a really high income and you look good too new credit card companies but if you don't have much of a credit history then you want to go a little bit slower if you have a long or credit history you know maybe every three to six months maybe you can add another one of those cards on to your card portfolio as it were and get another $200 bonus and have that new rewards categories added onto there that is going to boost your overall rewards so as a low spender if you can you know build up a stable of cards you can get those bonuses and you can start to get a pretty decent return on everything that you buy you're not going to get rich off of these things especially as a low spender but you can get a decent return and that is the way that I would do it that's that no annual fee cashback go for the bonus build up multiple cards over time whatever is the correct time period for you based on your credit history that's it for you low spenders if you have any questions put them in the comments section below otherwise I thank you for watching and as always please go to proud money comm where we do credit card reviews we talk personal finance we talk deals and all sorts of other fun stuff too thanks for watching bye

Channel: ProudMoney - Credit Cards & Personal Finance

Views: 21,980

Keywords: best credit cards, best credit cards for low spend, credit cards, credit card, chase freedom unlimited, chase freedom, wells fargo propel, bank of america cash rewards, cash back credit cards, cashback credit cards, reward credit cards, rewards credit cards, credit card rewards, blue cash everyday, credit, top credit cards

Id: DeUnnI91IrY

Length: 15min 3sec (903 seconds)

Published: Wed Feb 12 2020