Maximizing What’s in Your Wallet Q1 2012

Happy new year and welcome to the Q1 2012 edition of Maximizing What’s in Your Wallet!

As a reminder, this post is for all the credit card deadbeats out there looking to maximize cashback rewards. So, if you never carry a balance on your credit cards, have them set to auto-pay in full every month, and want to make the most of Q1 2012, then read on.

Here’s how you should allocate your spending:

Gas – This is a no-brainer. It’s the same card year round. It is the PenFed VISA Platinum Gas / Cash Rewards Card. You’ll get 5% back all the time on gas purchases. Just make sure you pay at the pump. I used to use this card for a lot more, but the rewards have been really scaled back such that only the 5% gas reward makes sense.  However, as a gas card, it’s a great choice.

Groceries – I have been very pleased with my new Blue Cash PreferredSM Card from American Express which pays me 6% back on all grocery purchases.  It also pays 3% on gas and 1% on everything else, but I only use it at the grocery store.  The downside to the card is the card carries a $75 annual fee, but it’s worth it.  Alternatively, the  Fidelity Investment Rewards AMEX is offering 5% with its special promotion

 

Restaurants – Use your  Fidelity Investment Rewards AMEX for 5% cash back with it’s special promotion.

Drug Stores – Use your   Fidelity Investment Rewards AMEX  for 5% cash back with it’s special promotion.

Home Improvement  – Neither the Discover it Card nor the Chase Freedom is offering this category in 2012.  Your best bet is to buy gift cards for your favorite home improvement store using the American Express Blue Cash Preferred Card or use your 2% card.

Department Stores, and Clothing Stores –  Use your Discover it Card for 10% cash back at Macy’s, JC Penny, Land’s End, Kohl’s, & Gap.

Hotels and Airlines – Use your 2% card or your favorite hotel card (mine’s the Marriott Rewards® Premier Credit Card).

Movies – The Discover it Card is offering 5% back for all of 2012.

Gifts – For gifts I use the Amazon VISA year round. When you buy through Amazon with the Amazon VISA you get 3% back and the first time you sign up, they give you $40 off your purchase. It’s well worth the sign up.  I am tempted to use my new  Blue Cash PreferredSM Card from American Express to buy Amazon gift cards at a grocery store for the 6% cashback.  If I can be more planful about such purchases, I will probably do this.

Museums – The Discover it Card is offering 5% back this quarter

Everything Else – I use the  Fidelity Investment Rewards AMEX  and Sallie Mae Signature VISA  interchangeably.  They both offer 2% cashback.

Two final thoughts: Please remember to sign up at Chase and Discover to be eligible for their 5% rewards, and remember this advice is ONLY for people who don’t carry a balance…EVER.

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  • Very nice summary.
     
    Have you tried to get gift cards with your Discover rewards, you can get many $25 cards for $20.  I use the discover at 5% and it ends up being worth 6.25% when buying gift cards.  
     
    What do you think

  • Oren,

    Yeah, I do that too.  Occasionally Chase Freedom will offer something similar.  I love it!

  • Mike

    This is great advice. My one question is a)how do you keep track of all these cards? and b) what do you do with them when the rewards areno longer worth using (such as the old Schwab card which I had)?

    It seems like a pain to check all these cards to make sure the correct amount is being deducted, and there’s no fraudulent charges on the ones no longer in use. I had some fraudulent charges on my Schwab card shortly before it rolled over to b of a so I’m trying to be more cautious.

    • Hey Mike,

      Those are good questions. The answer to both is Yodlee.com. It’s a personal finance aggregator site like Mint. I have all of my credit cards cards listed in Yodlee regardless of whether I use them or not. It’s a huge list, but Yodlee pulls in every transaction on every card so I see everything that’s happening in one login. I check it about once or twice a week. I highly recommend it. The physical cards themselves I shred (the ones I no longer use). I shredded the Schwab card and the B of A replacement about a week ago actually. Still miss that Schwab card…

  • Mike G

    Thanks for the reply. I have another question. I'm interested in signing up for a few of these cards. I just applied for the Fidelity Investment Rewards card and will likely apply for the Penfed and American Express Blue Cash Preferred Card  as well. Is there any time table on how long I should wait before applying for all these cards as to not adversly affect my credit?

  • Mike,

    If you have good enough credit to get those cards, it should not be a big deal in terms of affecting your score.  If you aren't planning on needing a new loan in the next year, it's even less relevant.  You only truly need a great credit score if you are going to borrow money.  Anyone else doing a check like a potential employer simply wants to know you're doing a decent job of paying your bills.

    Good luck!

  • @ Mike G
    All the cards that have been listed here require "excellent" credit scores according to their application pages. A commenter on our site was recently turned down for the Blue Cash with a 680 credit score (just short of "excellent") so I would try one at a time and see who accepts you. If you know what your credit score is then you're even better off. Anything above a 720 should be a shoe in, but if you're under 700 it could be iffy. Also with AE cards you'll know within 60 seconds if your approved or not.
    Dan – BankVibe recently posted..Top 5 Cash Back Credit Cards in 2012

    • Dan,

      Thanks for your comment. You are correct that almost every card I mention requires great credit. My site is definitely geared towards those with excellent credit and a good handle on their personal finance picture. I’ve had mixed experience with AE’s instant notification. 60 seconds has turned into multiple days even though I have excellent credit.