best rewards credit cards

Best Credit Cards Rewards – How Does Yours Compare?

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:

  1. All gas purchases anywhere are with a card from 4.25% or more cash value depending on how one redeems
  2. All travel-related expenses and restaurant/dining-out are with Costco Citi Visa card): 3% cash-back
  3. [Under Consideration] Amazon Prime Visa card (5% cash-back), given our increased purchase from
  4. 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?

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One Comment

  1. Great Point Jimmy! Thanks!
    Yes there is an implicit assumption in this post that “use of credit card” is not leading to unneeded spending. I agree that the mere convenience of using credit card, together with sign-up and ongoing rewards can actually be a path towards more spending. For the purpose of this discussion, I’m assuming that the buying habit stays indifferent/independent of the payment method (cash, card, check, paypal, etc.).

    Whenever I see an item is on sale with 60% discount, I remind myself that I still need to pay the 40% and whether I really want to spend on it . This is the reason I avoid store cards too. What I do notice in my spending behavior is that, when I’m using up a “reward” (e.g., a amazon gift card that was redeemed for a reward-point), I tend to be more lenient. Strictly speaking, I shouldn’t be, but I don’t mind this conscious indulgent of mine. Most of spending actually gets categorized under my “hobby” budget since I buy lots of books.

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