Trying to Decide on a New Credit Card

Some people like credit cards, some don't. My oldest sister's husband went bankrupt twice because he couldn't handle his use of a credit card. To this day, neither he nor my sister have a credit card of any kind, and I don't think they qualify for much in the way of loans if they ever need them. They're also low-income, but that's another story. I have also been told so frequently that credit cards are somehow bad tools to use for spending. I disagree.

I got my first credit card from my local credit union when I was a young adult. I intentionally asked for a low limit so I could see if I could handle owning one. It turns out that I can. I just treat it as though it were my debit card - I don't spend more than I can afford to spend. So now I have a higher limit and I've switch credit unions, and I finally opened up a "big boy" credit card with an annual fee and so forth at the behest of my wife a couple of years ago. She wanted to do some traveling and this card was great for travel. I'm against paying an annual fee for a card, but I'm also a giant pushover, apparently.

Check out my favorite travel credit card here.

Well, me being a giant pushover isn't just limited to my wife and daughter, it extends to my local grocery store. See, they decided to stop taking Visa cards, and I happen to love my Visa card very much. In fact, I've never had a credit card that isn't a Visa. From my sub-par rewards credit card at my first credit union to my flat 1% cashback card at my current credit union, all the way to my Chase Sapphire Preferred, I have stuck with Visa for a good long time. Now I'm unsure of what to do.

My debit card will continue to be accepted, but I'll be missing out on credit card rewards. I spend around $400 on what I consider to be my grocery expense. This goes beyond food and includes paper towels, toilet paper, lotion, shampoo, and other such products. The bulk of my shopping is done at my local grocery store, with a smaller portion at Costco, and a much smaller portion at Wal-mart. If we assume that I spend $250 at the local grocery store monthly, then I'm missing out on $2.50-$5.00 per month in rewards.

Pathetic, right?

I'm fretting over $30 per year in current earnings, and $60 per year in potential earnings. That's really not a lot of money at all. That said, I search with Bing strictly to get $60 per year in rewards. Given that I'm especially conservative with risk and money, the idea of missing out on $60 per year in what feels like "free money" is mildly bothersome to me. And at the same time, I think it's ridiculous to worry about it.

Regardless of how ridiculous it truly is for me to fret over, I've decided to go over the math... a lot.

The Math

What follows is based strictly on grocery spending at my local store. $250/month is assumed.

Discover It card

5% cashback for one quarter of grocery spending, 1% otherwise.
($250 x 5% x 3) + ($250 x 1% x 9) = $60 per year.

Bank of America Cash Rewards

2% cashback for groceries at all grocery stores and warehouse clubs.
$250 x 2% x 12 = $60 per year.

Kroger Mastercard

1% cashback = $30 per year.

My current Chase Visa card

1% cashback = $30 per year. I also don't get to use it at my local store anymore, so it's really more like $0 per year.
However, when these points are redeemed for travel, they are worth 1.25%, so we're looking at $37.50 per year.

Best case scenario

Clearly the Bank of America card or Discover It card would get me the most out of my groceries each year. When we factor in additional purchases, such as spending at warehouse clubs, we're looking at $84 for Bank of America, and $60 for Discover It, because it's not accepted at Costco or Sam's Club. Also, I would need to switch to Sam's Club in order to get the warehouse purchases on the Bank of America card.

Now if we factor in 3% dining on Bank of America with the grocery purchases, we're suddenly up to $147, which I think would be difficult to ignore.

Regardless, I'm reluctant to change credit cards in the first place. Bank of America doesn't exactly have a great reputation, and I feel far more comfortable with Discover and Visa. I frankly don't know what to do. The data-based choice is to go with the Bank of America card as my regular credit card for all spending. 3% at restaurants (or another category of my choosing), 2% at grocery stores, and 1% otherwise is a good, good idea. I can also switch my current Chase card to a 1.5% flat cashback, so I will ideally never earn less than 1.5% back.

All being said, no one gets rich on cashback. Furthermore, credit card rewards are, in part, why everything is so expensive in the first place. I'm paying for the cashback. If I could just get a straight-up discount by paying in cash everywhere, I'd pack around cash everywhere. Nevertheless, I still love my Chase Visa.

Learn more about my beloved Visa card.

And every time I think about this convoluted nonsense regarding cash, credit cards, and the like, I wind up liking cryptocurrency more and more.