What is the Best Credit Card for Driving Nomads?
Tl;dr: The IHG Premier offers excellent earning rates and relevant perks on a potentially net-negative fee card, but the Chase Sapphire Preferred is a great alternative.
Personally, I’m in the US all the time, so I like to travel internationally on vacation, taking advantage of credit card bonuses to go places like Japan or Italy. But some people prefer to drive from sea to shining sea, for instance, taking up #vanlife in retirement. Some people also prefer simplicity–managing multiple cards to optimize rewards takes effort. Not much, but more than some people are willing to devote to the project. What card should this kind of rdwrer have?
Key spending categories and benefits
For my hypothetical-ish traveler (my mom is getting the itch to hit the open road), travel costs will be a big expense. With the road tripper driving from place to place, airfare and car rentals aren’t big considerations, but hotel stays or campgrounds and vehicular expenses like gas, tolls, and parking are likely to be major spending categories. And while out and about it will be hard to meal prep, so a lot of meals will likely be eaten at restaurants. Earning extra bonus points on those purchases is key, and any ways to get extra discounts or perks during those travels would be nice as well.
The contenders
For no-fee cash back cards, a few make sense: the Wells Fargo Autograph (3x points on gas, travel, transit, and restaurants), the Chase Freedom Unlimited (3% on dining, 5% on travel booked through Chase, and 1.5% on all spending), the Citi Double Cash (2% on all spending), the Wells Fargo Active Cash (2% on all spending), and the Citi Custom Cash (5% on up to $500 in the highest spending category each month). A couple premium cards also stand out: the IHG Premier (hotel perks, bonus points on gas, travel, and restaurants), the Capital One Venture X (2x on all purchases, 10x on hotels booked through Capital One, lounge access), and the Chase Sapphire Preferred (3x on dining, 2x on travel, 5x on travel through Chase, 25% bonus value on points). [Costco members might consider the Costco Anywhere card, earning 4x on gas and 3x on dining and hotels.]
Somewhat surprisingly, the different earning rates on these cards result in fairly similar earnings rates, at least as long as the spending is modest and no particular category dominates. Assuming an annual spend of $15,000, with about $5k going to dining, a few thousand to travel expenses, and the rest in miscellaneous categories, almost all of the above cards earn roughly $300 in rewards back each year, with the Citi Custom Cash doing slightly better at $350 if the full 5% benefit is taken advantage of each month.
Early eliminations
With the annual earnings being fairly similar, we can quickly eliminate the Citi Double Cash and Custom cash, which lack important protections like purchase protection, extended warranties, trip insurance, or rental car protection.
The Venture X is a great card with a net-zero annual fee, and for many people it is worth having for lounge access when traveling by plane and premium protections like trip and baggage insurance and no foreign transaction fees. But if you don’t need or already have lounge access, the need to use Capital One Travel to recoup that fee or to earn extra points on hotels adds a layer of complication that might not be worth it for some people. (Of course, the 75k bonus point welcome offer is far more valuable than anything a cashback card can offer
The Wells Fargo Active Cash is a solid option with a simple and reliable 2% cash back on every purchase, but those who eat out regularly will likely earn more with the Chase Freedom Unlimited, which is a slightly better card overall in terms of protections and flexibility of rewards.
Honorable mention
For a no-fee cash back card, I think the Chase Freedom Unlimited is the best option for road trippers. It lacks bonus categories on road trip expenses, but the solid base earning of 1.5% combined with 3% on dining and the chance to get 5% back on hotels booked via Chase means the earnings will be competitive with almost any cashback card. And if the earnings are close, its excellent suite of protections, the added value of Chase Offers, and the potential to use the cash back as Ultimate Rewards points down the line makes the card appealing as a simple option to earn solid benefits on the road.
Runner up
I hate fees, but if the Chase Sapphire Preferred is the only card in your wallet, its benefits will probably more than cancel out the $95 annual fee. It comes with a $50 hotel credit, an extra .1 point per dollar spent the previous year upon renewal, and the points earned are worth 25% more when used to book travel via Chase. As to that last point, 30,000 Chase points would be worth $300 in cash back, or $375 in travel via Chase with the Sapphire Preferred.
With 3x on dining, double points on travel expenses including tolls and hotels, and the opportunity to earn 5x when booking travel via Chase, those added benefits mean that the CSP is likely to provide more benefits than the Freedom Unlimited, even accounting for the CSP’s annual fee. If you’re willing to transfer the points to hotel and airline partners like United or Hyatt you can stretch your points into even more value. And by having a premium travel card, you’ll get premium protections like trip cancellation/interruption insurance, baggage delay insurance, trip delay reimbursement, car rental insurance, purchase protection, and extended warranty benefits. Plus you get at least $750 towards travel if you earn the sign up bonus, more than triple what is available on the Freedom Unlimited.
Winner
The IHG Premier. One of my favorite cards, the IHG Premier is practically designed for the cross-country road tripper, with 5x points on dining, gas, and travel–to include hotels (even non-IHG hotels), tolls, parking, and more. It sports a solid 3x earning rate on base purchases, plus 16x bonus points at IHG properties. And it has excellent protections. Although it has a $99 annual fee, cardholders receive a free hotel stay each year (up to 40k points per night) canceling out the cost of that fee.
The main benefit of the card is, of course, the benefits at IHG properties, including Platinum status (upgrades, late checkout, early check in, welcome amenities, etc.), 26x total points per dollar spent on IHG stays, and every 4th night free when booking with points.
Of course, the downside of the Premier is that you only earn rewards in IHG points. These are generally worth 0.4-0.8¢ per dollar, depending on how you use them… which, of course, requires you to learn how to use them if you want to get decent value from them. You are also limited to using your rewards at IHG, so you are more exposed to devaluations and lack both the simplicity (redeem for cash back, redeem for travel with a bonus) and the upside (transfer to partners) of the Sapphire Preferred.
So why do I think the Premier is the better option? With the CSP, you have to get $45 in value from its benefits just to break even, and the benefits beyond that are limited to (slightly) more valuable points redemptions. The IHG Premier, on the other hand, offers a $100 credit towards TSA PreCheck or or Global entry every 4 years, $25 towards a United flight every 6 months, and the potential to earn even more rewards. After spending $20,000 in a year, cardholders receive a $100 IHG credit and 10,000 points. It would take a lot of spending on the CSP to match that value. Oh, and for those truly putting a ton of miles on their vehicle, especially a fuel inefficient one, the difference between the IHG card’s 5 points on gas vs. the CSP’s 1 could end up being quite significant, making it even harder for the CSP to catch up.
Conclusion
Any of the cards listed above could be a great fit for someone looking to explore the USA by car, truck, van, or RV. For maximum value, I think having the IHG Premier is the way to go, as it combines a great earning rate with the opportunity to get hundreds of dollars of benefits to offset its annual fee. However, those looking for more flexible rewards may prefer the Chase Sapphire Preferred. For those who are fee-averse, the Chase Freedom Unlimited earns decently without the need to use any credits to offset an annual fee.