My Credit Card Rewards Maximization Strategy

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Speaking of credit card rewards optimization, I was thinking about how the algorithm might work for me. I’m curious if others have a similar system. Man, I have a lot of cards…

Tier 1 – Special Rotating or Temporary Promotions (5%+ back)

First up, you’d want to check for cards that offer an exceptional bonus cash back. Chase Freedom and Citi Dividend both offer 5% cash back on rotating categories on up to $1,500 in spending each quarter. That’s a possible $75 extra each quarter for each card. Other cards may offer a temporary bonus as well.

  • Chase Freedom® – $150 Bonus – 5% purchases can come from gas stations and local commuter transportation 01.01.2016 – 03.31.2016
  • Citi® Dividend Platinum Select® Visa® Card – Earn 5% cash back every quarter in must-have categories.  Right now, on eligible purchases within the Hilton Portfolio, car rental agencies, movie theaters and theme parks from 7/1/14 – 9/30/14. Enrollment each quarter is quick and easy.

Since I don’t buy that much gas, I would only charge restaurants on the Chase Freedom (but not gas) and airline purchases on the Citi Dividend.

Tier – Permanent Category Bonuses (3%+ back)

Some credit cards offer a year-round bonus on things like restaurants, travel, gas, groceries, and more.

Tier 3 – Everything Else (2%+ back)

Here’s your backup catch-all card. Don’t settle for 1% back here, you can do better. 🙂

If you like airline miles or hotel points, here’s where your personal spending habits may also factor in. I value Starwood points at 2 cents or more per point due to their ability to convert to miles and primarily their value in hotel stays (including Sheraton, Westin, W Hotels) so I actually switch between a 2% cash back card and the Starwood depending on my point balance as I like to keep enough to pay for upcoming hotel stays. My Fidelity cash ends up in a 529 so that’s not as much fun. 😉

American Express cards also offer extended warranty protection that I like for larger purchases as their customer service is always the easiest to deal with when you actually need to file a claim. However, American Express cards aren’t accepted in certain cases (like my auto insurance), so you should have a Visa/Mastercard as a final backup.

All in all, it’s not as crazy as it seems. If the Chase/Citi 5% categories aren’t daily-use categories but things like airfare then I don’t keep them in the wallet (0-3 cards). Out of Tier 2, I only keep the Blue Cash AmEx with me (1 card). Out of Tier 3, I actually have a similar-but-grandfathered Fidelity 2% Mastercard and the Starwood AmEx (2 cards). So the total is really about an average of around 4. I’m thinking of switching to an All-Ett “world’s thinnest wallet” which should cut the thickness in half.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”  

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

User Generated Content Disclosure: Comments and/or responses are not provided or commissioned by any advertiser. Comments and/or responses have not been reviewed, approved or otherwise endorsed by any advertiser. It is not any advertiser's responsibility to ensure all posts and/or questions are answered.


  1. Squeezer says

    I use the Sallie Mae Signature Visa which has a 2% cashback rewards program as my sole card. However, I want to get the PenFed or Fort Knox Visa which have a 5% reward on gas.

  2. @Squeezer – Unfortunately, I’m pretty sure that the Sallie Mae 2% card (actually only 2% if you earn and accrue $250 in rewards without cashing out) is no longer available to new users.

  3. Jonathan, you should also put in your part 2, to not just get retail store giftcards from grocery stores, but gas cards too, which effective gives you 6% back on gas not the 3%. Even better if you are down south (I’m in Flordia) and you do it at Winn Dixie you can also get 5 cents per gallon for every $50 you spend off gas at Shell.

  4. It’s too hard to keep track of this stuff. My easier solution is just to open up a new credit card with a sign-up bonus every 2 months or so, use it for everything, and get about 15% cash back or so on all of my purchases.

  5. I use the Priceline Rewards card as my main card. It gets 5% on Priceline purchases and 2% back on everything else. You redeem them by choosing which purchase you want paid for that is $25 or more on your statement. i.e. I buy a discounted gift card from and then use my points on the Priceline card to apply to the charge. I use the Chase Freedom card for joint purchases with my wife. Between gas, supermarkets, etc there’s usually something on there we’re getting 5% back on.

  6. It’s probably worth mentioning the Blue Cash Everyday for those of us who won’t benefit from the higher percentage enough to offset the annual fee.

    It’s true that you pay off the fee with rewards from $25 in groceries a week, but it’s only an improvement off the 3% on groceries from BCE if you’re spending more like $50 in groceries a week. Again, this probably makes it worth it for many people, but in my situation, it simply doesn’t make sense.

  7. I don’t see 5% on Home Depot? Earn 5% cash back on Airline and Car Rental purchases, and on back-to school shopping at the Gap, Banana Republic, Old Navy, Gap Outlet and Banana Republic Factory Store between July 1, 2012 and September 30, 2012 when you enroll. Am I looking at the wrong place?

  8. Oops, Home Depot was Q2, it is as you stated for Q3 2012.

  9. Jon,
    I like the strategy. I use a similar one without so many cards. I would like to get another card or two to maximize cashback in different categories. However I can’t help but think the more cards you have the more likely you are to experience credit card fraud or identity theft. My logic would be that your personal information is floating around in so many computers with so many different companies. Do you ever worry about this or consider using a service like life lock?

  10. Kurt @ Money Counselor says

    What do you suspect you “earn” per hour in rewards for the time you put in managing this process?

  11. The Citi Forward also gives you 5 points for restaurants (effectively 5% cash back in GC, more if you wait for a GC sale). If you don’t need the Chase Freedom for gas, but still want a nice eating out card, it’s a good choice.

    I’m tempted to upgrade my Blue Cash (which I don’t use anymore) to a Blue Cash Preferred for the 6% groceries, but when I consider that I spend roughly $2000 at supermarkets per year, if I just use my Fidelity 2% on everything card, the math is almost a wash. The WF (wife factor) of having less cards to have to figure out what to use for what is almost worth the $5 difference.

    $2000 * 6% = $120 – $75 annual fee = $45

    $2000 * 2% = $40

  12. Do you know, the 5% cashback on resteraunts, does it count on fast food places like Mcdonalds or Burger king?

    I always run into the problem of not knowing what different stores are categorized as according to credit cards. There should be a searchable database somewhere.

  13. Does Amex Blue Cash consider stores like Walmart, Target as supermarket?

  14. Man… not sure how you keep track of so many accounts CC + checking a/c? Quicken is not the only thing you use. How do you track so that something untoward does not miss?

  15. shaka5001 says

    Quick note – Don’t forget to try to negotiate your cashback rates. I got Discover to give me 6 months at 5% on all purchases. (capped at $300 cash back per year).

    I generally use the same strategy as David – open a new bonus card every month or two. It takes about that long for me to meet the spend requirements to get the bonus and I don’t risk missing the spend criteria by diluting across multiple cards.
    As for optimizing the various rates – mathematically it makes sense in certain situations but there are some pitfalls to think about. I’m concerned particularly with the balance between minimum cashout requirements and annual fees. It can take forever to reach a minimum cashout requirement if you’re just using a card for one category, especially because 5% bonuses usually only apply for 3 months. If you have annual fees associated with a card you probably aren’t making any money. Also it just sucks to wait that long to cashout- you might** be better off cancelling short history cards to keep your average card age higher or to decrease the amount of credit you have with a particular CC provider. Also sometimes you can double dip bonus offers by reopening an account after a waiting period (typically a year).
    My basic algorithm: 1. Complete current new card offer for bonus. 2. When no bonus active use Amex Blue Cash Everyday Card. 3. Use highest current point balance VISA or Mastercard if vendor doesn’t take AMEX for quickest payout on straggling accounts.

  16. Squeezer @Personal Finance Success says

    @Jonathon you are correct, I have to cash out in $250 increments (every 5-6 months with my spending habits) and it is no longer available to new users. Priceline has a 2% Visa accepting new users, however.

  17. Squeezer @Personal Finance Success says

    Discover Escape Card is also a 2% card but has a $60 annual fee.

  18. Brad Ford says

    We use a similar strategy. Blue Cash Preferred for groceries, dept stores and gas. Fidelity Amex for everything else. Marriott card when they won’t take Amex. While not as good asbthe spg card, I travel for work and my company likes us to stay in Marriott properties do my points grow quickly and add to elite status.

    Our only specialty cards are Airline cards to avoid baggage fees.

  19. Brad Ford says

    Btw – we send al our savings to a 529 plan for our daughter.

  20. Jonathan,

    I’ve had an All-Ett for years now and it’s awesome. Just wanted to let you know 🙂

  21. Why did you drop PenFed?

  22. I have been an All-Ett customer for years. It’s great!

  23. I had all-ett for 3 years… it does wear – the back pocket started having two small holes in them. but i think i can make it last 10 years.

    they had a buy one get one half off and I used that to get the travel/passport wallet as my second wallet (first one is original) I’ve used the travel wallet to carry two passports (second passport had to go in the back) credit card, ID, cash, etc. and very happy with it – it all fit nicely in my jeans pockets.

  24. RE: Kevin Says:
    July 13th, 2012 at 8:24 am
    Do you know, the 5% cashback on resteraunts, does it count on fast food places like Mcdonalds or Burger king?

    The Citi Forward card does include fast food restaurants.

  25. In terms of wallets, you might also consider Big Skinny ( They claim to make the world’s thinnest wallets–and offer a variety of styles. I use the Leather Acrobat Money Clip Bi-Fold Wallet–and it’s awesome!

  26. What does the multitude of cards do to the credit score?

  27. To keep life simple I use this strategy:

    Fidelity Amex: 2% on everything
    FKFCU Visa: 5% on gas, 1.25 % on everything else
    Credit union’s debit card: to make 12 POS transaction to get 2.5% on 10K in my back. The transaction amounts are usually very small like few dollars.

    I am thinking of getting Discover More to be used only for online purchases through their ShopDiscover website which by far has max discounts for online stores and for 5% rotating categories.

    Good thing about FKFCU visa is that you get the cashback every month, so you don’t have to reach a certain limit to get that.

    Amex Blue cash “Grocery” stores is misleading. It does not include superstores like Costco, Walmart, Target, FredMeyer etc.

  28. I also have the Chase Freedom and Citi Dividend which I use for the quarterly bonuses. It does take some effort to remember which card to use!

    I just received a target offer from my Citi AAdvantage card offering 3x miles on gas, restaurant, supermarket, and drugstore purchases until 9/30/2012. Seems like this card is trying to get in the rotation too 🙂 It’s not as good as 5x but I’ll use it for groceries and drugstores.

  29. I just was approved for the Amex Costco TrueEarnings card. The representative told me that costco would give me 2% cash back on gasoline, PLUS AmEx would give me 4% cash back on gasoline. If that’s true, it would be worth 6%. I thought it was 4 total, but 6 would be better.

  30. The Chase Freedom Visa sounds good since it gives a 5% rebate on gas purchases. I seldom go to restaurants but I use gas everyday so that is definitely something useful for me.

  31. RE: aaron says…

    You have been misinformed. Costco will not give you 2% cash back on gasoline. The TrueEarnings personal AMEX offers 3% cash back on gasoline. The Business card offers 4% cash back on gasoline.

  32. Cooper's Dad says

    My Amex Blue Cash *does* recognize purchases at Meijer (at least from the checkout lanes at the grocery side of my local store) as grocery purchases (regardless of the items). My experience is that when the card terminals are set up, the “type of business” is defined, so it can vary from store to store within a given chain.

    I’m sure it’s been pointed out by other readers before me, but rewards from Discover can be converted to gift cards for many retailers at greater than a $1 for $1 ratio (e.g., $40 rewards dollars equals $50 LLBean gift card). This makes the Discover payout 1.25% (or 6.25% during bonus quarters). This rate, plus great service and prompt payouts (no minimums) make Discover my favorite card, even though the Amex Blue is my home run for groceries, at 6%.

  33. I was a content 2% Schwab guy until they took that away. Now I chase promos, sign on bonuses and category spend. Credit score has taken a few lumps from the inquiries, but I don’t need any loans. My wife thinks I am nuts.

    When I have enough miles & points I could see me migrating back to cash back split between category spend. Amex Blue Pref, Citi Forward and maybe SPG could be pretty effective. Of course I have none of these.

    Probably won’t ever have enough miles & points though.

  34. Jonathan: I think PenFed: 5% gas, 3% groceries, 1% others, I just use this card for everything.

  35. I’ll redeem my Discover CB for a discounted gift card if I’m going to make a purchase in the next couple weeks at one of those stores and can’t otherwise get more than the base cashback.

    Citi Forward rewards get redeemed for Staples gift cards, which I then monetize by buying free after rebate/rewards items (I have a few boxes of photo paper to give to family members).

    I usually stick to PenFed for gas but I’ll use Chase/Discover during the 5% promotion to get my rewards balance high enough to redeem, keeping the reward limits in mind.

  36. I have a Citibank credit card on which I’d like to use to take advantage of rotating categories. But the thing that trips me up is, I took advantage of an excellent 0% balance transfer a while back and have until 2/13 to pay back. So I generally use other cards to prevent getting mixed up and getting charged interest. Anyone have a suggestion on how to avoid that? I haven’t been able to figure out how to pay just the new purchase amount w/out triggering an interest charge on the entire balance.

  37. I try to maximize savings by not spending unnecessarily 🙂

  38. Jenna, Adaptu Community Manager says

    Oh my gosh! How do you keep track which is which?

  39. Another note for the AMEX perferred is they don’t state what is considered a supermarket. A store like Fred Meyers, which sells household goods, groceries, electronics, etc. is not considered a supermarket, but a mass merchandiser. This does work at Safeway though. The other thing that you can do, is purchase a VISA giftcard for $500 or more (plus I believe a $6 fee) and receive 6% back on all of your purchases that are outside the supermarket.

  40. I recently got a US Bank Cash+ Visa Signature card which is a great rewards card to complement the ones already listed. This is a brand new card that seemingly hasn’t been widely touted.

    $50 new cardmember bonus when you spend $500 in your first 90 days

    5% cash back on two categories that you choose – like home improvement stores or airline tickets.
    2% cash back on gas, groceries or drug stores – choose one
    1% cash back on everything else
    $25 bonus each time you redeem $100 or more cash back in a single redemption.

    You must use the link below to get the $50 bonus after spending $500 in 90 days.

    This is a credit card that will give you 5% back on 2 categories of your choosing each quarter, including bill payment (such as cable, phone, Internet, satellite, & insurance) which is normally a huge expense for most people.

    More info:

    A friend of mine has a US Bank mortgage and then got this card in addition to his US Bank checking account. This qualified him for their platinum checking package. A surprise bonus came on his first credit card statement: platinum checking customers get a 50% bonus each month on their credit card rewards (e.g., if you earn $10/month in rewards, you actually get $15). This can amount to a lot of extra money, since the rewards are not capped, and since you get an additional $25 bonus if you wait to redeem the rewards once you’ve accumulated $100.

  41. Here’s the slim wallet I’ve used for the past 5 years. Holds my ID, insurance, and transit cards, 3-4 credit cards and a couple bills. I think you might like it, check it out:

  42. The citi forward is n the drawer? You can get 5% back on restaurants when you use the reward dollars for mortgage principal cash out. I carry the citi religiously!

  43. Hi – Does anyone know if the rewards for the Citi Forward card have changed? When I signed up, I was told I got 5 points for every $1 spent at restaurants and bookstores. But then I was just told by a representative that this would end June 30, 2013. Has anyone else had a similar experience? Thanks.

  44. Betty,

    I just called Citi because of your note and they said nothing is changing for Citi Forward.

    However, I’m still curious why some people may be receiving this message (or if they’re lying to me!). Can you elaborate or possibly get it in print through secure message site?


  45. Derek,

    About a week ago I had called Citi to confirm that I still received 5 points for every $1 spent at restaurants, bookstores, movie theatres, etc. I was transferred 3 different times and told this would end June 30, 2013. Today I called again and this time the person I spoke with nothing was changing. *sigh* Not sure why the info from customer service is so inconsistent. Anyway, hopefully nothing really is changing. I asked if there was a way to get a confirmation email, but they said no.


Speak Your Mind