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
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
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.