My 2021 credit card strategy – simplify and prioritize key cash back categories

It may be difficult to strategize a plan for your credit card journey, but there are ways to optimize it.


Credit card strategies often involve some complexities cardholders may not be aware of, our column breaks down one for credit cards in 2021 which can help you plan your own.

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I made some big changes to my credit card strategy over the past few months.

I consolidated from six cards into just two, mostly to simplify my financial life.

I’ve also grown to appreciate perks such as extended warranty coveragecellphone insurancepurchase protection and excellent customer service more than I did in the past. This sometimes means leaving rewards on the table in the short term, but with the potential for huge benefits in the future.

Case in point: I got a $299 Apple Watch repair covered because I paid with a card that offered strong purchase protection coverage. I earned only 1% cash back when I bought the item, compared with 2% I would have received on a different card I held at the time but that alternative did not offer purchase protection.

I sacrificed $4 in cash back yet saved $299 in repair costs less than a month later.

My two cards

I’m very happy with the two cards I’ve chosen to focus on: the Blue Cash Preferred Card® from American Express and the Chase Freedom Flex℠.

This brings me to another piece of advice: Figure out your top spending category and pick a card that maximizes it. For me, it’s groceries, and I love how the Blue Cash Preferred gives 6% cash back on up to $6,000 in annual spending at U.S. supermarkets (then 1% cash back after that).

I’ll easily hit the $6,000 limit this year, which will give me $265 in cash back even after subtracting the $95 annual fee. And that’s not factoring in the 6% cash back I get on select streaming subscriptions, 3% at U.S. gas stations, 3% on transit and 1% on everything else.

I’m hoping I’ll be able to earn 5% cash back at grocery stores during the third or fourth quarter of this year via my Freedom Flex card.

This card evolved out of the old Chase Freedom card in 2020, and in the nine years I had that card, groceries consistently made an appearance on the quarterly 5% cash back calendar. That applies to up to $1,500 of spending (activation is required, and cardholders earn 1% cash back after exceeding the limit).

The first two sets of 2021 quarterly categories were OK for me (wholesale clubs, select streaming services and internet/cable/phone services in Q1 and gas stations and home improvement stores in Q2) but I have high hopes for the second half of the year. Groceries would be outstanding (my fingers are crossed for Q3 in particular since Q4 usually focuses on holiday shopping, which is usually a pretty good category for me).

Besides the rotating 5% cash back categories, the Freedom Flex also gives 5% cash back on travel booked through the Chase Ultimate Rewards portal and on Lyft rides, 3% on dining and drugstore purchases and 1% on everything else*. I’ve underutilized the travel and dining categories of late but anticipate a rebound as we continue to dig out of the pandemic.

I sometimes think about switching to the Chase Freedom Unlimited. The main difference between the Freedom Unlimited and the Freedom Flex is that the Freedom Unlimited doesn’t have rotating 5% cash back categories, but it gives a minimum of 1.5% cash back on every purchase (along with the same 5% cash back on travel booked through Chase Ultimate Rewards and Lyft rides and 3% on dining and at drugstores).

Even though I haven’t loved the Freedom Flex’s recent 5% categories and I haven’t spent much on travel or dining this year, I still earned a total of 1.8% cash back on all of my purchases over the past three months. I’m going to wait and see how the rotating categories turn out over the next quarter or two before making a decision.

*New cardholders for the Chase Freedom Flex and Chase Freedom Unlimited can currently earn 5% cash back on grocery store purchases (not including Target® or Walmart® purchases) on up to $12,000 spent in the first year

More results

I have earned 2.3% cash back on my Blue Cash Preferred purchases over the past three months, and between the two cards, my grand total nets out to a 2.1% return.

If you account for the Blue Cash Preferred’s annual fee*, I’m basically right at 2%, and there are several no annual fee cards that give 2% cash back on all purchases. I actually think one of those cards would be the best choice for most people.

*$0 introductory annual fee for the first year, then $95

In my case, I think I’ll do a little better with my current cards, particularly because I anticipate spending more on traveling and dining.

Plus, I really like the customer experiences provided by both American Express and Chase. They help me save money via Amex Offers and Chase Offers, and I earn extra cash back on many of my e-commerce purchases thanks to Shop Through Chase.

Both of my cards also offer generous purchase protection and extended warranty coverage – and the Freedom Flex has cellphone insurance, too.

Bottom line

While I could eke out a few more rewards on some purchases, I’m very comfortable with my new credit card approach.

There was a time when I was more swayed by short-term benefits such as sign-up bonuses, and I dabbled in transferable travel points for a bit.

But I have since determined that I value simplicity, cash back, low annual fees, buyer protections and customer service, and I’ve settled on two cards that are great fits for my current lifestyle.

Have a question about credit cards? Email me at and I’d be happy to help.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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