Welcome to the Q2 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 cash back 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 Q2 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 Discover it Card is offering 5% back here for the quarter as is Chase Freedom.
Restaurants – Use your Discover it Card for 5% cash back this quarter.
Drug Stores – Use one of the 2% cash back cards out there.
Home Improvement – Your best bet is to buy gift cards for your favorite home improvement store using the Blue Cash PreferredSM Card from American Express or use your 2% card.
Department Stores, and Clothing Stores – Use one of the 2% cash back cards out there.
Hotels and Airlines – Use your 2% card or your favorite hotel card (mine’s the Marriott Rewards® Premier Credit Card).
Movies – Chase Freedom 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% cash back. If I can be more planful about such purchases, I will probably do this.
Museums – Use one of the 2% cash back cards out there.
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.