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® More 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® More 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® More 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® More 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.
Discover Card Cash Back Bonus Categories 2012
I posted on the new 2012 Chase Freedom reward categories last month so I guess it's time to address the ones for the Discover® More Card this week. These 5% cash back categories are a bit more interesting in my opinion.
January – March
- Gas stations – I will still be using the PenFed card. It's the same reward level, and I like credit unions better than big banks.
- Museums – Nice to see something educational in the cash back categories!
- Movie theatres – Interestingly, you get 5% cash back on movies in EVERY quarter. I watch about 1 movie per year in the theatre (on my birthday). Looks like Discover will be getting my $8.
- 10% Cash back at Macy's, JC Penny, Land's End, Kohl's, & Gap – I have to say I really like this offering. 10% is an easy figure to calculate while shopping, and it seems my son just won't stop growing. This is probably good considering he's just over 3ft tall right now.
April – June
- Restaurants – I love it when the restaurants are at 5%. I don't eat out more often because of this, but I get a bigger kickback when I travel for work and get to expense my meals.
- Movie theatres
July – September
- Gas stations – I will still be using the PenFed card.
- Theme parks – I don't really do theme parks right now, but I'm sure this is good for some families.
- Movie theatres
October – December
- Department, electronic, and toy stores – This will be huge for many folks next Christmas season. Many will max out their quarterly rewards here I'm sure.
- Movie theatres
So, no airlines and no hotels this year? I guess not.
It Just Got Twice as Expensive to Be Poor and Stupid
I just read an article on Yahoo! that the price of Powerball tickets is set to double on January 15th. As many have already discussed, including me, lottery tickets are a foolish investment that disproportionately affects the poor. Your chances of winning are miniscule. However, according the to article I read, the odds are getting better:
Odds of winning are improving because of changes the game is making in the numbers players can choose. The number of Power Ball numbers to choose from will decrease from 39 to 35. That will raise the odds of winning from 1 in 192 million to 1 in 175 million.
Oh, well if my odds are now up to 1 in 175 million count me…out. Let's get this straight, you're going to increase the price of a ticket by 100% but increase my odds of winning by less than 10%. For that kind of change to be appealing, you've got to be stupid. Of course, the lottery officials wouldn't be making this change if there wasn't strong data to support it.
What do you think? Does the new Powerball hold more appeal for you? What about when the NPV on your investment in a ticket turns positive when the jackpot is high?
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