How To Choose The Right Credit Card For Your Spending Style

As I contemplated changing my everyday credit card to the Chase Freedom card; I’ve been pondering one of my favorite financial topics…credit card strategy. In other words, how does one maximize the benefits of credit cards—mainly short-term interest free loans (when paid-in-full), purchase protection, and rewards—while avoiding both credit cards’ inherent dangers and the temptation to collect dozens of cards, one for every specific use?

Here, I’m going to suggest four spending styles and the kinds of plastic that might be best for each. The spending styles are:

  • The Everyday Spender. Uses one credit card to pay for everything, everyday.
  • The Big-ticket Buyer. Uses credit cards only for big purchases like furniture or travel (airfare and hotels).
  • The Budget Watcher. In debt and/or living paycheck-to-paycheck. Needs to watch every dollar.
  • The Business Traveler. Uses a credit card for expenses that will be reimbursed like airfare, meals, and hotels.

Before diving in, I want to cover a couple of assumptions I make.

Assumption one: A thin wallet is best.

If your goal is to squeeze every rewards penny possible out of the credit card system, then you’ll need more than one rewards credit card. Having a dozen credit cards may not bother you. Personally, I want to carry as few cards as possible.

The simple truth is that most people are going to select an everyday credit card based upon the rewards it offers…myself included. So all else equal, this post assumes that fewer credit cards in your wallet are better, and when possible, the cards should be rewarding.

Assumption two: It’s best to pay in full, but…

To be clear, I learned the dangers of racking up credit card debt the hard way, so the only responsible way to use credit cards is to pay off what you charge, in full, at the end of every month…which is what I do now.

That said, there are many people that carry credit card balances strategically. They may finance the purchase of furniture or an appliance using a 0% intro APR or a very low rate card even if they have the cash in the bank. Again, I personally never want to carry a credit card balance again, but I know that many use cards this way.

The “Everyday Spender”

The Everyday Spender uses a card for everything. Coffee, utility bills, airfares, you name it.

Most months her credit card bill comes in around the same amount, but if she made a few big purchases one month it may come in higher. Either way, she has the cash in the bank to pay the balance in full every month. The Everyday Spender never pays finance charges. By putting everything on her credit card, she gains short-term cash flow benefits, purchase and fraud protection and, of course, rewards on every purchase.

To become an Everyday Spender, you should be debt-free and have a good cushion of cash in the bank so you never end up with a balance you can’t pay off.

The best cards: The best credit cards for everyday spenders are the ones with the most generous cash rewards programs like Chase Freedom, Discover it, and the Blue Cash Everyday Card® from American Express. At the moment, my pick might be the Chase Freedom. Because it’s a Visa card, you can use it everywhere, and you’ll likely benefit from the 5% cash back on certain spending categories every quarter. Another card to consider is the Fidelity Investment Rewards American Express card, a fee-free card that offers a flat 2% reward on all purchases in the form of cash transfers to an eligible Fidelity Investments account.

The “Big-ticket Buyer”

The Big-ticket Buyer prefers to use cash or a debit card for bills and everyday small purchases, but puts the big stuff like furniture, appliances, electronics, and travel, on credit.

He knows this is a smart move because of the purchase and travel insurance many credit cards provide that debit cards do not. Although he might like to be rewarded for these purchases, rewards aren’t his first concern. He sometimes, however, wants the option of paying off the big purchase over a few months, so a low regular APR is important.

The best cards: It all depends on how much you’re going to charge on the card and whether you will ever carry a balance. If you only spend a couple thousand a year on the credit card, you won’t earn many rewards, and if you carry a balance for even a month or two, the interest charges will start to eat away your rewards. A good card at the moment is the Citi® Diamond Preferred® Card, which offers a 0% APR on purchases and balance transfers for 18 months. You may also want to check with your local credit union; many offer no-frills, no-rewards credit cards with regular APRs under 10%.

The “Budget Watcher”

The Budget Watcher is still getting on his feet financially. He may have some old credit card debt left to pay off and/or he may be living paycheck-to-paycheck.

In other words, he doesn’t have a designated emergency fund or a cushion of cash to tap in the event of an unexpected expense. The Budget Watcher’s sole goal should be to save enough to create this cushion, get out of debt, and develop a proper emergency fund.

As I know from experience, if you’re living paycheck-to-paycheck, paying off your credit card every month may not always be possible, despite your best intentions. So Budget Watchers will get better financial control with a debit card or a charge card .

The best cards: The Zync Card from American Express is a charge card (meaning it must be paid in full every month) that provides rewards and some additional benefits for a $25 annual fee. I used a charge card for my everyday spending as I was watching my budget, getting out of debt, and building up savings, but in reality I think I merely broke even between the rewards I earned and the annual fees I paid.

The “Business Traveler”

The Business Traveler needs to make purchases on behalf of her employer, submit an expense report, and get a reimbursement check.

She may have a credit card for personal purchases, but she’s also decided to carry one just for reimbursable business expenses. Most often, these expenses include lots of travel: airfare, hotels, and rental cars. It’s possible to spend $15,000 or more a year just on company travel.

The best cards: Frequent business travelers who get to charge their own expenses are probably the only ones who should consider airline and hotel loyalty credit cards that charge an annual fee. If you can a) charge your own business travel, b) be loyal to one airline or hotel chain, c) have the accompanying credit card, you can earn travel rewards that blow any annual fee out of the water. Choose the card based upon the airline or hotel you use most. Some top cards include:

Or, opt for a general travel rewards card like Chase Sapphire. Just don’t carry a balance on these cards, as the regular APRs are super high.

What about you? What credit cards do you carry, and why? How do you use them? How did you choose them?

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.


Earn and save more with our free course:

Join over 15,537 other young professionals. Get our best money hacks to get out of debt by 30, increase your income this year and invest for financial freedom.

100% free! I will NOT spam you and I will NOT share your email.

About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. How about the Capital One Venture card. straightforward rewards, and no annual fee!

    • David Weliver says:

      Yup, that would work, too. I hear mixed things about Captial One customer service…not that any of the big credit card companies do tha much better, but take it for what it’s worth. I did a review of the Venture Card a while back and that came up in some comments. Capital One cards don’t have foreign exchange conversion fees, though, so it’s a good bet if you travel abroad a lot.

  2. I carry two cards, a Capital One cash rewards card which gives a flat 1% on purchases plus a yearly 25% bonus on rewards earned (so essentially 1.25% cash back) and a Discover.

    I used to use the Discover primarily. However, once I read the fine print and realized it actually earned less than 1% until I met certain spending limits, I made the switch to the Capital One card as my everyday card.

    Discover further irritated me by increasing the minimum required to redeem the rewards. Formerly, I could redeem rewards once I had accumulated $20.00. That has since changed to $50.00. There are no minimums for me to redeem my rewards with the Capital One. I can (and have) redeemed $2.64 if I feel like it.

    Now, I only use my Discover for purchases that fall into their seasonal 5% cash back categories IF I happen to remember it, and only up to their max for that category.

    I’ve read some comments here (and elsewhere) about poor customer service from Capital One, but I personally haven’t experienced it.

  3. David,
    I have never responded to a blog on the internet but this article was short, concise, and very informative so I thought would I share my experience concerning Capital One.
    The problem started back at the end of July when I tried to make a Capital One credit card transaction and it was denied. It turns out that my payment due in mid-July was late. I pay my bills as they come in and I never received a statement in the mail so I hadn’t made the payment. Now, I pay my credit card bill off every month and have done so for the past two years since I have had this card. The statement that I missed and hadn’t paid was for less than $200. I called Capital One and they took off the late charges and assured me that they had sent me a statement and that my account wasn’t mistakenly marked as “paperless” only. I received a statement in August.
    I didn’t receive a statement in September so I called the company and got the amount due and I paid it in full. Once again, I received assurance from Capital One that they did indeed send the statement and once again assured me that my account was not marked as “paperless” only. They suggested that I contact the Post Office since I didn’t receive my statement.
    Now, it’s October and once again I noticed that I didn’t receive a statement and that my payment might now be late to Capital One. I was upset and once again called Capital One. Once again they assured me that my account was not on “paperless” and that they had mailed me a credit card statement. They would of course remove the late fee. I immediately sent an electronic payment to Capital One.
    So, several days later I try to make a credit card transaction but discover that my account has once again been suspended. The balance of my account is under $300. I call customer service and it turns out that my payment had not been credited to my account yet and therefore is (at this point in time) one day late. I’m shocked that they would suspend my account for being one day late. The customer service agent offers his apologies but says: (1) He can’t release my account until the payment is credited; (2) The late charge will be taken off; (3) I will have to pay the interest and guess what . . . . (4) My account is marked as paperless and it will take two months to switch it to “paper copy”.
    I have now paid the $1.88 interest charge but I will cancel my Capital One account. Oh, by the way, I had a 0% interest rate that was good until a payment was late. Capital One may have tried but they have had since July to solve my problem and failed to correct the situation in a timely fashion and they have damaged my credit and my integrity.
    I am now looking for a credit card company with an excellent and honest customer support. I lean towards Discover Card or Chase because most of my purchases are on the internet and they both offer extra internet security. I’m just not quite sure if the extra internet card number is bothersome or not and I’m not sure if Discover is offered in enough places to use it at hotels, restaurants during family vacations. However, I hear that Discover is number one in customer support. Also, I prefer to use one card and am now thinking of using it for all “over the counter” transactions because it appears to be safer than a debit card.