Best Credit Card Cash Back Strategy

[Dude]

Hi All,
I've been looking for ways recently to make more money (haven't we all!) and have done quite a bit of research and thought I would share to help others out. So here goes.
***First, this advice only applies if you pay your entire balance in full every month*** People who carry revolving debt should not try this approach.

Best Cash Back Credit Cards:
1. Blue Cash from American Express
2. Schwab Bank Invest First Visa Card
3. *Pentagon Federal Credit Union Visa Platinum Cashback
4. *USAA Total Rewards/Cash Rewards Mastercard

Here's why:
1. Blue Cash provides 5% cash back on Gas, groceries and drug stores - 1.5% cash back on everything else AFTER you have spent $6500. Under $6500 is 1% and 0.5%, respectively. So the bottom line; this is a great card if you spend more than $1000 a month and most of that is on gas, groceries and drug stores. If you spend less than $1000 a month, and esp if you spend in other categories, this card is not worthwhile. Rewards credited anually.
2. Schwab - 2% flat cash back. No limits, no maximums. Only caveat is you must open a Schwab brokerage account, but there are no fees and no minimums to do this. Another great benefit to this card is there are no foreign transaction fees, great for those of us who travel overseas and couldn't be bothered with money changers. Rewards credited monthly to your brokerage account. Card issued and managed by FIA card services.
3. *PFCU Visa - 5% cash back when used at pump. 2% supermarkets, 1.25% everything else. No limits, no maximums. Caveat - must meet membership requirements to join credit union.
4. *USAA - 1.25% cash back on cash rewards, 1% on total rewards, probably the best customer service of any bank. Rated best credit card by consumer reports. Also must meet membership eligibility requirements.

All of the above cards have no annual fee, very respectable APR's and online access. I purposely left out Chase signature rewards, citi cards and discover cards because of personal issues I've had with these banks, including dramatic changes to cardholder agreements, changing cash back terms and poor customer service.

So here's how it works in my case. I buy an awful lot of diesel for my job, often more than $2000 a month, all of which I get reimbursed for. I'm using 2 cards, first the AMEX Blue Cash, which I frontload all my purchases on to pass the $6500 tier, and the Schwab 2% flat rate card. I put all my purchases on the AMEX to pass $6500, which normally takes me a little over a month to do. I then use the AMEX ONLY for gas, groceries and drug stores to take advantage of the 5% cash back. All other purchases are put on the Schwab card at 2% cash back. With the amount of diesel I buy, I've calculated my cash back on the AMEX is just under 4% even including the 1% tier under $6500. Combined with the 2% Schwab card for all other purchases, I'm averaging right around 3% total cash back. Since I spent a little over 60K on credit cards last year (business and personal combined), I'm estimating that I will pocket a little more than $1800 this year at right around a 3% rate of return.

The way I see it is close to 2K additional income for expenses that I make everyday anyways, and I've set up automatic payments so that it takes no thinking on my part, just a little concentration to get started. My high yield savings account only pays 1.75% as of this writing, so I think I'm not doing too badly.

If anyone has any better cards that they know could give a better rate of return, by all means, please share!

[Dude]

Ok, update: cancelled my Schwab account because of the worst customer service in the world. Let me just say that Charles Schwab, the brokerage - has great customer service. FIA card services, on the other hand, has the worst customer service I've encountered in many years of dealing with organizations large and small. Back to USAA I go.

[TmoNeko]

My Uncle does the same things with his Card Combo, but one thing I know he had to account for and is worth mentioning - If you don't put that cash back directly into a savings account you have to declare it as income. Most people in his situation and yours have enough padding for taxes for that not to matter, but worth considering.

[eshbaugh]

I recently switched from travel rewards (Starwood Amex) to cash back. I decided to go with Schwab Visa 2% cash back on everything, no limit and Costco Amex for business 4% gas, 3% restaurants, 2% travel 1% everything else. I like these two because there are no minimums, no annual fees, no limits, no gimmicks. FIA administers the Schwab card and they don't make it easy for autopay of full amount each month - have to call customer service to have a form mailed to you but who cares since it's a one time thing. 2% cash back goes straight to Schwab One brokerage account automatically every month - no minimum to open a brokerage acct if you have a checking account so I opened all three including credit card. All three show up fine on my mint acct btw.

Other cards I considered were PenFed 5% gas, 2% supermarket, 1.25% everything else - but their autopay doesn't work for me - has to come from a penfed bank account and they debit it on the cycle end date rather than the due date so you lose some float. Amex Blue looks good on surface but bulk of my purchase are in 'everything else' so it's not as good as deal as Schwab and Costco Amex.

[jsm88]

of course, Mint.com can't figure out how to link to the schwab card accounts, so if you like this site then under no circumstances should you get that card. There is a kludge that works for some users, the rest of us are SOL, 12 back and forths with support and the best I can get out of them is that I must be giving the wrong information - no willingness at all to try and work this out for the many, many users with this problem.

[jourgeoct09]

Hi,

I totally agree with you . you have shared very important

information and your effort is really appreciable.

[vishenda]

Thanks for sharing these information

[eshbaugh]

Originally Posted by jsm88

of course, Mint.com can't figure out how to link to the schwab card accounts, so if you like this site then under no circumstances should you get that card. There is a kludge that works for some users, the rest of us are SOL, 12 back and forths with support and the best I can get out of them is that I must be giving the wrong information - no willingness at all to try and work this out for the many, many users with this problem.

worked first attempt for me...have to have your schwab credit card linked to your brokerage account; can do it online here:
https://www.ibsnetaccess.com/NASApp/...s/LoginDisplay
under 'my profile'

Then create credit card acct in mint under 'charles schwab bank credit card'
hope this helps for you..I know how frustrating it can be...I have all but given up trying to get my bmwfs, penfed and suncoast mortgage to show up in mint...

[janie_super@yahoo.com]

Discover has a card that pays 5% on certain purchases

i really want the amex blue, but my credit score isnt good enough for them. wa wa.

[sl19]

Good advice. I have stuck with Alaska Airlines travel rewards and have saved tons on trips over the past year. However, they are starting to increase fees so I am looking to see if there is other opportunities out there for personal rewards and CPA firm rewards.