In Pursuit Of The Most Rewarding Rewards Card

Best Rewards Cards To Maximize Your Cashback

Best Rewards Cards To Maximize Your Cashback

As a card wielding consumer who believes in paying off the balance in full every month, I think I’m entitled to getting back the 2% to 3% surcharge that businesses tack on to their products, as the cost of doing business via credit cards.

I call this Return on Expenses.

For those who use a credit card for convenience and not for the interest rate, it makes sense to choose a card that maximizes rewards. 5% cash back on gas? That’s more than what the markets returned last year! Claim what’s rightfully yours!

If cash paying customers were offered a better deal, I would definitely go all cash! But credit card companies prohibit price discrimination in their terms and conditions.

Is it worth it?

Is this pursuit worth it? In order to find out, follow your expenses. What are the expenses that chip away that 2% or 3%, one expense at a time?

Here are some statistics for the year 2010 for an average family.

Money spent on Gas and Motor Oil: $2,132
Money spent on Restaurants: $2,505
Money spent on Groceries: $3,624
Money spent on Clothes: $1,700
Money spent on Drugs $410
Online Holiday Shopping $658

Those are some big numbers and all are almost always paid with a card. A 3% cash back would be nice.

One Card To Rule Them All?

I’ll cut to the chase. There isn’t one. But a combination of cards can get you close enough.

What Makes The Cut

Before I reveal the results of my research, a note on the criteria chosen to evaluate the cards:

  • The card must have cash as rewards. Not points or miles.
  • No annual fees, no matter how good the rewards are.
  • No revolving categories. I can never remember them.
  • No store cards. Too restricting.
  • No expiration on the rewards. One less thing to remember.

The Cards Revealed..!

American Express Everyday Blue Card

536598 In Pursuit Of The Most Rewarding Rewards Card

Why This Card Was Chosen:

This card addresses 3 of the expense categories above – Gas, Apparel and Groceries. 3% on Supermarkets, 2% on Department stores, 2% on Gas.

And if you use this card for any other expenses, you still get 1% cash back. Not too bad! And of course no annual fees.

Other benefits:

  • Damaged your brand new iPhone? No worries! If you bought it with your Everyday Blue Card, you are covered for up to 90 days!
  • Is the salesman pressuring you to get extended warranty on that laptop? Why when you get it for free with this card?
  • Did that store just refuse a return? Once again this card comes to the rescue!
  • Some travel benefits too like theft, damage and collision coverage and travel insurance

Amazon Chase Visa Card

Chase Amazon Rewards Card

Why This Card Was Chosen:

This card covers some of the categories not addressed by the Amex card. 2% cash back on Restaurants and Drugstore purchases. In addition, 2% on gas and 1% on everything else, same as the Amex Blue card.

And best of all, it offers 3% cash back on purchases from Amazon! I do a lot of shopping online especially from Amazon so I might be a little biased here!

Note: This card is advertised as earning points for purchases, but you can redeem your points as cash back which is what I do.

Other benefits:

The Amazon Rewards Card I have has benefits similar to those of Amex Everyday card. But I can’t find them listed in either Chase or Amazon’s site. Please check with Chase or Amazon on additional benefits.

PenFed Platinum Cash Rewards Card

Why This Card Was Chosen:

PenFed Platinum Rewards card offers 5% cash back on gas which is better than the 2% offered by both Chase and Amex. There are other cards that offer 5% cash back on gas, but I chose this one since I already am a member of PenFed and the other cards don’t necessarily offer anything better than this card.

Other benefits:

  • No Foreign transaction fee. If you use your credit card abroad, most cards charge you an additional surcharge as foreign transaction fee. Very useful if you travel abroad frequently.
  • 0.25% on other purchases
  • This card is from a Credit Union!

Summary of Cash Rewards

Average spent (2010) PenFed Amex Blue Everyday Chase Amazon Max Cash Back
Gas $2,132 5% 2% 2% $106.6
Supermarkets $3,624 3% $108.72
Department Stores $1,700 2% $34
Drug Stores $410 2% $8.2
Online Shopping $658 3% $19.74
Restaurants $2,505 2% $50.1
Others 0.25% 1% 1%

Honorable Mentions

Not everyone may share my aversion to annual fees or revolving categories. In my research I found two cards that offered generous rewards but did not meet all of my criteria above.

Blue Cash Preferred Card from American Express

536534 In Pursuit Of The Most Rewarding Rewards Card

For a $75 annual fee, you get 6% cash back at supermarkets, 3% cash back at gas stations and department stores, and 1% everywhere else. Depending upon your annual expenses, this might be worth considering. In addition, you get all the benefits of the American Express Blue Cash Everyday card mentioned above.

Chase Freedom Visa

If you have the discipline to remember revolving categories, you should consider this card! You’ll earn 5% cash back on up to $1,500 spent each quarter. From April-June, you’ll earn 5% on Grocery stores and Movie theaters, from July-September, you’ll earn 5% on Gas stations and Restaurants and from October-December, you’ll earn 5% on Hotels, Airlines, Best Buy and Kohl’s purchases.

You’ll also receive $100 bonus if you sign up for this card. To qualify and receive your bonus, you must make purchases totaling $500 or more during the first 3 months from account opening.

My Thoughts

A combination of these three cards will help maximize your rewards on your purchases. A 2% return on expenses is not too shabby. Limiting the number of credit cards you use also means less worries on id theft and curtails your temptation to sign up for more.

Finally, what if you do carry a balance? In that case, your best reward is to pay off your balance. None of these rewards match up to the 17% or 18% you pay every time you carry a balance.

What is your favorite rewards card?

Continue reading here: Selling Stuff On Amazon: A Step-By-Step Guide

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