CreditCards.com’s industry analyst Ted Rossman shares his cash-back strategy and what cards he may add to his wallet next.
With a wife and a toddler, I spend a lot on groceries. In fact, my wife Chelsea and I marvel at how much our grocery bills have increased since our daughter Ashleigh was born. It’s even more evident now that she’s three-and-a-half and growing like crazy.
My main spending category: Groceries
The Blue Cash Everyday® Card from American Express gives us 3 percent back on up to $6,000 in annual spending at U.S. supermarkets (1 percent thereafter), which we easily max out. That alone yielded $180 over the past year. That roughly matches our weekly average food bill, so you could say this card feeds our family for free one week out of the year.
There is a $95-annual-fee version of the card, called Blue Cash Preferred® Card from American Express which gives 6 percent back on U.S. supermarket purchases (same spend cap), so we’ve opted for the no-annual-fee version to date. After accounting for the fee, Blue Cash Preferred would give us $265 back on groceries each year. That $85 difference hasn’t been enough to get us off the fence. We’ve never had an annual fee card, and we’re trying to be selective with our card portfolio, so we’re saving our next card application for a bigger gain.
Another reason we held off on Blue Cash Preferred was because of our Chase Freedom card’s rotating 5 percent cash back categories. These included Apple Pay from January-March and groceries from April-June. The Q1 promotion inspired me to use Apple Pay for the first time. Most of that came at the grocery store, and we maxed out the quarterly bonus ($1,500 in spending for $75 cash back). We hit the limit again in Q2.
The current quarter’s 5 percent categories aren’t as good for us (gas stations, Lyft and Walgreens – not where we spend a lot of money). And while the fourth quarter hasn’t been officially announced yet, it will probably follow the trend from years past and focus on holiday shopping at department stores (also not great for us). Still, this fee-free card is well worth a spot in our portfolio, and we used it to the max during the first half of the year.
See related: Best credit cards for grocery shopping
What’s on my list of cards to consider?
Everything else goes on our Capital One Quicksilver Card. I think this is our biggest opportunity for improvement. One possible solution would be to upgrade to the Citi Double Cash Card for an effective 2 percent return (1 percent when you buy plus 1 percent when you pay off the purchase) on anything other than groceries and the Freedom bonus categories. I still think we could do better, though.
We aren’t currently earning bonus points on travel, and while I don’t consider us big travelers, I recently discovered we’re spending more in this category than I thought. We typically make two trips to visit Chelsea’s parents in California each year, plus we’re planning to take Ashleigh to Disney World in early 2019. Many credit cards even count my monthly train commute as a travel expense. Add all of this up, and it seems like we’re missing out by not having a travel card that gives us extra points on these purchases.
To that end, we’re strongly considering signing up for the Wells Fargo Propel American Express® card. We’re drawn by its 30,000-point sign-up bonus (worth $300 in cash) and triple points on dining, travel, transit and gas stations, all without an annual fee. You have to spend $3,000 in the first three months to get the bonus. The Disney trip could be perfect timing.
I’m also thinking about the Chase Sapphire Preferred Card. Its sign-up bonus is more generous (60,000 points after you spend $4,000 on purchases in the first 3 months from account opening), but it charges an annual fee ($95) and offers 2 points per dollar of travel spending, not three. My current plan is to get the Propel card first and reconsider the Sapphire Preferred in a few months.
So, there you have it: three cards, almost $1,400 in free money and some ideas on how to raise the bar even further. What’s your cash-back strategy?