Money doesn't actually talk. We do.

Cardshark Recommends the Chase Freedom Card (Again)

A while back, we launched a feature called the Credit-Card Personal Shopper. Nice idea, lousy name.

The idea is to use my formerly useless knowledge of all-things credit cards to help FiLife readers pick a better card for themselves and their families. I ask a handful of questions to figure out what you need, then I tell you which card or cards to carry at the top of your wallet.

The original name made it sound like some kind of guided shopping spree though. Whoops. So let’s try it again, now with the new-and-improved moniker “Cardshark.” Our subject for today is Laura Fitzgerald of Brooklyn, N.Y., who’s married and has a young daughter. Her story is below.

Would you like to be the next subject? Write me a note, and we’ll make it happen. No money changes hands; I offer this service free to FiLife readers, and advertisers don’t pay to get on the short list for recommendations or anything like that.

The interview:

Ron: So what cards are you using now?

Laura: We use the Chase card that earns miles on Continental Airlines. My husband and I used to be huge frequent-flier mile hogs.

And why are you looking to make a change?

We do almost no business travel now. And with Continental, you have to call a year in advance to get seats, and even then, you’re practically flying through Moscow.

What’s your goal with the new card?

We’d love to continue traveling for free. But we travel to see family a lot with an almost two-year old, and we’re realizing that we cannot continue to beg the airlines to give us the seats they have on any given flight. We need a better travel program, without blackouts, or we’re open to getting cash back if that would make more sense.

Really, we’re just looking for the best possible value.

How much are you spending each month?

It averages around $2,000 per month. We put everything we spend on the card and pay it off each month.

Are you willing t0 use more than one card, or would you rather stick with just one to keep things simple?

We’re better off with one.

And where do you travel with your family?

Pensacola, Fla. Delta’s the only one with decent flights. Also Atlanta, and my brother lives in Japan and is about to have a baby.

The analysis:

The Citi PremierPass cards (one has an annual fee with generous rewards; another has no annual fee but is less lucrative) are good choices for families who fly a lot and wish to redeem the points they earn for air travel in coach that doesn’t involve an ocean crossing. You can trade the points you earn for travel on any airline, though you may not get to choose which one you fly.

As for cash-back, my initial recommendation here was either the Pentagon Federal Credit Union 1.25% (a little more, actually) card or the Fidelity American Express card that yields 1.5% in cash refunds that go straight into a 529 account.

I’d also mentioned the Chase Freedom card to Laura in passing. This one earns 1% cash back but gives out 3% back each month at the three types of places where you spend the most out of a list of 15 categories of retailers.

For example, if you spend more at gas stations, drugstores and grocery stores than you do anywhere else in a certain month, that’s where you get the 3%. Every month, it can change if and when your spending changes.

Neat idea. The one big problem for medium-size spenders and above, however, is the fact that Chase limits your 3% take to the first $600 you spend at the top three categories each month. After that, you just get 1% back at those places (as you do everywhere else you use the card).

Without doing the math, I assumed that this cap would make the card not work for Laura. She went ahead and ran the numbers, however, and proved me wrong. She calculates her return at 1.6% spending $2,000 a month, falling to 1.48% at $2,500 a month. And that’s not counting a one-time signup bonus or the $50 bonus Chase gives out when you hit $200 in rebates and cash in all at once.

One other thing about the Chase Freedom card: As its name implies, if Laura ever wants to use the points she earns for travel rewards instead of cash-back she can. That clinched it for her, and for me. Interestingly, the Chase Freedom card got the nod the last time we did this exercise too.

Got any quibbles with this analysis? Please post them below. Want to avail yourself of the Cardshark’s services? Click on my name below and send me an email.

– Ron Lieber