Best combinations of cards for maximum cashback

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To My Credit
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Best combinations of cards for maximum cashback

Postby To My Credit » Sat May 28, 2016 6:26 pm

For simplicity, let's limit this to cards without annual fees so we don't have to set limits to your yearly expenses. Here is what I got:


Gas:
PenFed Platinum Cash Rewards Visa Plus Card (5%)
BankAmericard Cash Rewards Credit Card (3%)

It has to be noted that you can get anywhere from 3.3% to 5.25% cashback on gas with BankAmericard if you have a Bank of America Checkings & Savings account, depending on how much cash you have in it.


Grocery:
AmEx Blue Cash Everyday (3%)
BankAmericard Cash Rewards Credit Card (2%)

Of course, the AmEx BCP card has the best rewards with 6% cashback and is the most common choice for high spenders in this category, but I'm not listing it because of its annual fee. And, again, you can get anywhere from 2.2% to 3.5% cashback with BankAmericard if you have a BofA account.


Restaurants:
US Bank Cash+ Credit Card (5%) [but only on fast food restaurants]
Chase AARP Credit Card (3%)

You also have the option of Discover It and Chase Freedom giving you 5% cashback in this category for 3 months of the year apiece (which may or may not coincide). The same goes for the gas category.


I guess that covers the major categories that most cashback credit cards seem to focus their rewards programs on. If there are any other major categories that I'm missing, or if there are other cards which offer better cashback than the ones I've listed, please let me know in your replies.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+


kdm31091
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Re: Best combinations of cards for maximum cashback

Postby kdm31091 » Sun May 29, 2016 9:30 am

To My Credit wrote:For simplicity, let's limit this to cards without annual fees so we don't have to set limits to your yearly expenses. Here is what I got:


Gas:
PenFed Platinum Cash Rewards Visa Plus Card (5%)
BankAmericard Cash Rewards Credit Card (3%)

It has to be noted that you can get anywhere from 3.3% to 5.25% cashback on gas with BankAmericard if you have a Bank of America Checkings & Savings account, depending on how much cash you have in it.


Grocery:
AmEx Blue Cash Everyday (3%)
BankAmericard Cash Rewards Credit Card (2%)

Of course, the AmEx BCP card has the best rewards with 6% cashback and is the most common choice for high spenders in this category, but I'm not listing it because of its annual fee. And, again, you can get anywhere from 2.2% to 3.5% cashback with BankAmericard if you have a BofA account.


Restaurants:
US Bank Cash+ Credit Card (5%) [but only on fast food restaurants]
Chase AARP Credit Card (3%)

You also have the option of Discover It and Chase Freedom giving you 5% cashback in this category for 3 months of the year apiece (which may or may not coincide). The same goes for the gas category.


I guess that covers the major categories that most cashback credit cards seem to focus their rewards programs on. If there are any other major categories that I'm missing, or if there are other cards which offer better cashback than the ones I've listed, please let me know in your replies.


For cash back I think you hit the nail on the head. It just depends how much you spend in a given category; some people won't benefit much from a dedicated "gas" card for example and would be better off consolidating the expenses so as not to dilute the rewards across too many accounts. Sometimes people can fall into the pattern of trying to get a card for every category of spend. If the spend is large, it makes sense, but if not, you may be better off just using a Double Cash overall.

There's also the added factor of the rotating cards like you mentioned. If one has a Discover and a Freedom in tandem, that's gas and dining at 5% for half of the year anyway, further indicating there may not be a need for specific use cards.

Like I said, your list is accurate and represents some solid choices for category cards; I just think as a whole people overestimate the value of them.

To My Credit
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Re: Best combinations of cards for maximum cashback

Postby To My Credit » Sun May 29, 2016 9:38 am

kdm31091 wrote:For cash back I think you hit the nail on the head. It just depends how much you spend in a given category; some people won't benefit much from a dedicated "gas" card for example and would be better off consolidating the expenses so as not to dilute the rewards across too many accounts. Sometimes people can fall into the pattern of trying to get a card for every category of spend. If the spend is large, it makes sense, but if not, you may be better off just using a Double Cash overall.

There's also the added factor of the rotating cards like you mentioned. If one has a Discover and a Freedom in tandem, that's gas and dining at 5% for half of the year anyway, further indicating there may not be a need for specific use cards.
You're right. If Discover and Freedom have 5% cashback for gas in different quarters, the need for a good card dedicated toward gas falls off for most people. For me, personally, a card dedicated to restaurants wouldn't hurt, because I spend almost 4 times as much on dining as I do on gas. In that sense, I'd be better off getting a Citi DoubleCash card than a PenFed Platinum card.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

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CarefulBuilder14
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Re: Best combinations of cards for maximum cashback

Postby CarefulBuilder14 » Sun May 29, 2016 2:56 pm

The way I analyze cards is a bit more complicated, but I find the answers more useful:

Combining estimated rewards, bonuses, and perks...then subtracting annual fees...what marginal benefit will a new card give me over a period of two to four years?
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

takeshi
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Re: Best combinations of cards for maximum cashback

Postby takeshi » Tue May 31, 2016 8:47 am

I'd suggest starting with your major spend categories and finding cards that maximize rewards on those categories and volumes versus trying to cover every category. Everyone doesn't have the same spend. Any reward is going to be a small percentage of spend so start where you have the bigger spend.

To My Credit wrote:For simplicity, let's limit this to cards without annual fees

Don't just look at AF/no AF. Consider total cost/benefit.

For the BCE and BCP, $2,500 in grocery spend is the break even point. If you have more spend you stand to net more rewards with the BCP. If you have less then the BCE is probably better option.

Run the numbers and understand the impact in terms of $. Don't just look at %. 3% may look better on paper than 2% but what does that really work out to for you?

To My Credit
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Re: Best combinations of cards for maximum cashback

Postby To My Credit » Tue May 31, 2016 10:10 am

takeshi wrote:I'd suggest starting with your major spend categories and finding cards that maximize rewards on those categories and volumes versus trying to cover every category. Everyone doesn't have the same spend. Any reward is going to be a small percentage of spend so start where you have the bigger spend.
That's true, which is why I'm primarily looking for cards that provide maximum returns on my biggest expense: restaurants.

Don't just look at AF/no AF. Consider total cost/benefit.

For the BCE and BCP, $2,500 in grocery spend is the break even point. If you have more spend you stand to net more rewards with the BCP. If you have less then the BCE is probably better option.
I barely spend $100/month on groceries. As for gas, I already have the BofA CR card which gives me better than 3% because of its customer bonus. The AmEx BCE card works out better for me than the AmEx BCP, and that's what I have. However, I should add that the actual reason I got the AmEx BCE card is because:
(1) It was offering a bonus of up to $350. Based on my expenditure for 2016, I will be getting all of the $350.
(2) I want to have at least one AmEx card.

Run the numbers and understand the impact in terms of $. Don't just look at %. 3% may look better on paper than 2% but what does that really work out to for you?
Sound advice. My major category-specific expenses are on restaurants and cell phones. Combined, they add up to around $800/month. If I can get Chase Freedom and US Bank Cash+, I would be getting 5% back on them for most of the year. If I were to assume 5% on cell phones and 3% on restaurants (conservatively, because of the calendar cycles), that could amount to an additional $250+/year. I could get that if I have Chase Freedom and US Bank Cash+.
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

kdm31091
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Re: Best combinations of cards for maximum cashback

Postby kdm31091 » Tue Jun 07, 2016 10:47 am

Keep in mind also that habits change. You may eat out a lot now, but is a "special dining card" just going to encourage more of it? I eat out a lot, probably too much, and find that Discover's 5%, or Cash+ fast food 5%, just encourages me to eat out more instead of staying in and cooking. Of course, that's not to say it influences everyone, but something to keep in mind. Categories cards can be great but you need to be mindful that they don't encourage further spending in the categories.

To My Credit
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Re: Best combinations of cards for maximum cashback

Postby To My Credit » Tue Jun 07, 2016 11:02 am

kdm31091 wrote:Keep in mind also that habits change.
That's one of the primary reasons I'm mindful of taking a card with AF. I'll have to be sure it serves me long-term. Unless of course I'm primarily motivated by a really good bonus.
You may eat out a lot now, but is a "special dining card" just going to encourage more of it? I eat out a lot, probably too much, and find that Discover's 5%, or Cash+ fast food 5%, just encourages me to eat out more instead of staying in and cooking. Of course, that's not to say it influences everyone, but something to keep in mind. Categories cards can be great but you need to be mindful that they don't encourage further spending in the categories.
I've been dining out almost every day for about 3 years now. And that's from even before I've ever had a credit card. I try my best to not let credit cards influence my spending. But I am awfully tempted to buy a new tablet on Amazon next month because Discover is going to be giving me 10% cashback on it (thanks to cashback match).
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+

kdm31091
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Re: Best combinations of cards for maximum cashback

Postby kdm31091 » Tue Jun 07, 2016 9:48 pm

To My Credit wrote:
kdm31091 wrote:Keep in mind also that habits change.
That's one of the primary reasons I'm mindful of taking a card with AF. I'll have to be sure it serves me long-term. Unless of course I'm primarily motivated by a really good bonus.
You may eat out a lot now, but is a "special dining card" just going to encourage more of it? I eat out a lot, probably too much, and find that Discover's 5%, or Cash+ fast food 5%, just encourages me to eat out more instead of staying in and cooking. Of course, that's not to say it influences everyone, but something to keep in mind. Categories cards can be great but you need to be mindful that they don't encourage further spending in the categories.
I've been dining out almost every day for about 3 years now. And that's from even before I've ever had a credit card. I try my best to not let credit cards influence my spending. But I am awfully tempted to buy a new tablet on Amazon next month because Discover is going to be giving me 10% cashback on it (thanks to cashback match).


10% off of something you don't need is still a 90% loss. Remember that :)

To My Credit
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Re: Best combinations of cards for maximum cashback

Postby To My Credit » Tue Jun 07, 2016 9:59 pm

kdm31091 wrote:10% off of something you don't need is still a 90% loss. Remember that :)
LOL, absolutely. I wouldn't say I need a tablet, but my current one is 6 years old and pretty useless right now. It might not be a complete waste :D
Current cards: BankAmericard CR, BankAmericard BBR, Citi Double Cash, Chase Freedom, AmEx BCE, Discover It
Wishlist: US Bank Cash+



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