Thursday, January 5, 2012

Yearend Summary of Credit Card Cashback Rewards

Disclaimer - The Discover offers are no longer valid.

I thought it would interesting to take a look at how well my wife and I were able to use our credit cards this past year.  Hopefully everyone can see how it is easy to at least get 2% from every purchase and, if you are willing to do a little bit of work, ever more than 2%.  Hopefully, it can also give me motivation to beat these statistics for next year.

My goal is that for every purchase I aim to get at least get 2% back.  This is because I use the Fidelity American Express card which gives 2% on every purchase, so if the purchase doesn't fall into a special category, at least I can use the Fidelity card and get the standard 2% back.

Here is the breakdown from my different Cards

Charles Schwab/Bank of America Cash Rewards - 2.06%
Fidelity American Express - 2.00%
Chase Freedom - 2.32%
Discover it™ - 3.58%
Toys R Us - 5%
Target - 5%
Banana Republic - 71.59% - explanation below
Brooks Brothers - 91.76% - explanation below

Overall - 3.04%

My analysis:

This past year 

Charles Schwab -  used to be my 2% card because it was a Visa but that program was discontinued and changed to the Bank of America Cash Rewards Card.
Chase Freedom was my backup card when AMEX wasn't accepted and also had 5% rotating categories.
Discover - same as Chase Freedom, except all the rewards can be multiplied by 1.25 if you take rewards in gift cards instead of cash.
Toys R US/Target - Toys R Us gives 4% back for the credit card and 1% back for the keychain card.  Target gives 5% off every purchase.  So these numbers are self explanatory.
Banana Republic - this looks like a lot, but it is mostly a one time thing.  I only spent about $90 there and I was able to get 15% off my purchase for signing up for a card and I got $50 in various rewards for giving them my email, signing up for paperless statements, etc.  I will be getting a $15 rewards for my birthday every year.
Brooks Brothers - this is not a one time thing, but it is very minor.  They give me a $20 gift certificate for my birthday.  I bought stuff for $21 (there were other small purchases throughout the year as well) that I need anyway so that is why the percentage is so high.

What to Change for Next Year
My wife and I did a very good job this year, but there are a couple of things that will hopefully change for next year.
The majority of my purchases were with the Schwab and Fidelity cards, which will not change.
Schwab changed to the Bank Of America Cash Rewards Card.  At first, I was upset because I lost a 2% Visa, now I have a replacement and the Bank of America fills in a void for me with gas.  It gives 3% on gas and an extra 10% if you redeem into a Bank of America Checking Account (which I have, of course) so I really get 3.3% back on gas.  This will help my percentages.
Chase/Discover - Both have added gas to 2 of their quarterly categories, which means that you can get 5% on gas for 6 months of the year and 3.3% the rest of the year with the BOfA card.  The biggest change will be from Discover.  I originally used Discover as a backup for the AMEX until I found out that Discover only gives 0.25% on non 5% purchases, while Chase gives 1%.