Reshuffling My Whole Cash Back Credit Card Plan

Posted by Madison on October 16, 2008


It had to happen… I’ve had a pretty sweet deal come to an end. For a few years, I’ve had a Chase card that earned 5% back on gas, groceries, and drugstores. I didn’t talk about it much, since you can’t apply for it anymore, so there wasn’t much point.

I got a letter that the program will change to 3% now. That change, coupled with my need to use an American Express card at Costco has had a domino effect on my cash back plan.

I always want to get the most cash back possible for all our spending, so I ran the numbers and calculated break even points between each card for each category that had tiers to break through. Here’s my new plan.

Cash Back Credit Card By Category

 
Purchase Credit Card Cash Back Notes
Gas American Express TrueEarnings Costco Business 5%
Groceries Chase Freedom 3.75% 3% Redeem $200 for $250 to get extra 0.75%
Wireless Service American Express SimplyCash Business 4%
Restaurants American Express TrueEarnings Costco 3%
Drugstores American Express Blue Cash 1%-5% If you spend over $6500 annually (all purchases combined). It works great if you play the drugstore game to get free after rebate items.
Online Discover More 5% Currently includes retailers such as Sears, Dell, Circuit City, Office Depot
Costco American Express TrueEarnings Costco 1% If you plan to spend less than $15,000 at Costco annually. Over $15,000 and the American Express Blue Cash wins.

Tips and Tricks

Spousal Tip

If you are like me, the only thing that will spoil the new plan will be trying to reteach your spouse which card to use where. My poor husband finally had it figured out too! Write where the card should be used in a black marker on the front of the card.

Business Cards

Want a business card, without a business? I explain how individuals can use Business Cards.

Discover Quarterly Promotion

Discover has quarterly promotions; sign up online with any Discover card. See the Discover cashback calendar. October 1 – December 31 has a 5% Cash back bonus on up to $400 on these purchases:

  • Grocery Stores
  • Restaurants
  • Movie Theaters
  • Movie Rentals

Action Plan

I have three of these cards currently, so I’ll put those into the rotation. I’ll plan on applying for the rest in a few weeks.

Did I miss any? I want to hit the highest cash back in every category; let me know if there’s a card out there that’s better than the ones I found.



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Comments to Reshuffling My Whole Cash Back Credit Card Plan

  1. hi, what do you mean by the comment for the groceries cc you listed? i looked through the website and couldn’t figure it out.

    thanks!

    liz

  2. Thanks for the link love, Madison! I have to say, though, that if you’re playing The Drugstore Game right, you shouldn’t come close to $6500 in a year 🙂

    Cathy @ Chief Family Officer

  3. Madison,
    About Costco & the American Express Card. On my Costco Business Card, I currently get 2% rebate (up to $500). If I acquire & utilize the American Express Small Business True Earnings Card, will I be able to piggy back those discounts (5% on Gas to 1% on everything else) on top of the Costco ones? Currently, the Costco discount pretty much pays the card fees, but if I can both discounts, I certainly will. Thanks, Neal

    Neal Hawes

  4. I play the Amex/Costco game too, and we just got our rebate check. Nice little reminder that good habits have benefits too!

    Randall at CreditWithdrawal

  5. @ Liz: I should have explained the rewards better. For the groceries on the Chase Freedom card, you earn 3% cash back. However, every time you redeem $200 in rewards, you get an extra $50. So the actual cash back is 3.75%.

    Madison

  6. @ Cathy: Don’t worry, I wouldn’t spend $6500 (or even close) on the drugstore game! We’ve already hit the limit for the year… so now any drugstore purchases will earn the 5% cash back.

    Madison

  7. @ Neal: That’s what I’m planning on doing, stacking the regular 2% Costco rebate, with the 5% on gas and the 1% on Costco purchases. From what I can tell, there is no exclusion that says you can’t stack them. And that makes for a great cash back setup!

    Madison

  8. My cash back plan is nearly identical to yours except I have the Chase Freedom Plus (gives you up to 3.75% on your top 6 categories instead of 3), and I don’t use the AM Blue Cash card because I wasn’t sure how the tiered system would work with our spending. I can totally relate to teaching your spouse! I have stickers on the back of each card saying where to use them, and have to remind him of the Discover More card’s promotion periods.

    Chris

  9. This is a fantastic Web site! I am so glad I found it. This fits my philosophy of frugality perfectly.

    People always ask me when are you going to buy this or that? And I say in time I will and they are surprised I do not, for example, own a television even though I could easily afford one.

    The answer is, I will buy one when I get a good deal on a good set, in the mean time I will just watch movies on my computer.

    Neil Anuskiewicz

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