Over the years, I’ve simplified my credit-card usage to just a few reward cards. My main goal was to rake up rewards as much as possible, without having to remember a complex algorithm to decide which card to use when.
Not that I’m too stingy and trying to collect changes, but I dislike leaving money on the table, especially when a couple of one-time habit-changes/steps can increase annual cash-flow by at least several hundred dollars, if not more. At the same time, neither I nor my family members (additional card-holders) are inclined to carry a lot of cards together with a mini-manual. I use cards heavily for over 80% of my total expenses (notable exceptions being the property tax and a few small recurring/annual payouts).
I wanted to share what I do and also get input from others as to what they follow:
- All gas purchases anywhere are with a card from penfed.org. 4.25% or more cash value depending on how one redeems
- All travel-related expenses and restaurant/dining-out are with Costco Citi Visa card): 3% cash-back
- [Under Consideration] Amazon Prime Visa card (5% cash-back), given our increased purchase from Amazon.com
- Fidelity Card for most everything else (including #3 at this moment): 2% cash-back
Notable choices made:
- I used to have a Shell card for 5% cashback at gas stations, but discontinued it since this is available only at Shell gas-stations
- The switch from AMEX to VISA has simplified this further as AMEX is still not accepted in a few merchants we use
- Stopped using “rotating reward category” cards (e.g., Chase gives 5% on 3 category of expenses, but the categories change frequently).
- I prefer getting cash or equivalent as reward than “in-kind”, due to the flexibility
- I learnt that x% reward does not necessarily mean x% cash. The reward points may be diluted depending on what is being redeemed
- I noticed that over the last few years, many online payments, including most utilities, are now accepting credit card auto-payments without any extra fee. Previously only a bank account was possible.
- I’ve left the other cards as is, and use them sporadically if needed (e.g., foreign travel)
What do you think? Anything you’d like to share from your experience?