Monday, September 1, 2014

Oren's Money Saver Beginner's Guide Part 2 - Using Credit Cards for Maximum Savings

Check out the other posts in the Beginner's Guide Series

Part 1 - Introduction
Part 3 - Savings Without Credit Cards
Part 4 - Manufactured Spend

Using Credit Cards for Maximum Savings

I am currently carrying 16 cards.  I have credit cards, debit cards and gift cards and I actively use each one of them.  The number will vary, but I always have plenty with me to save extra money over the course of the year.  It's probably somewhere between $3,000-$5,000 a year, but I don't know exact numbers.  To me, that's pretty significant. For others, it may not be as important.  

To be fair, much of that is from Manufactured Spend, as I will outline in a later post, but a lot is also just from using the right credit card in the right situation.

I am well aware that it isn't normal to carry so many cards.  I also don't give my wife quite as many cards, though she has plenty and is a good sport about it.  I think most people would get a headache from it but, check this out, I really enjoy it.  

If you don't want to carry so many cards, don't, but just because you don't want to carry 16 doesn't mean that you don't want to carry 2 or 3.  You never know, you may start adding cards as you learn more.  I know, wishful thinking.

Which Cards Do I Actually Use?

First of all, check out the list of My Favorite Credit Cards.

This is my list with a short blurb on why I have it, but it doesn't include any cards that I happen to have in my wallet because I need to spend money for a signup bonus.

  1. American Express Gift Cards
    1. Over 4% cashback everywhere.
  2. Visa Gift Cards
    1. Over 5% cashback everywhere.  Not for normal spend if I can avoid it because I don't have an unlimited supply and Visa gift cards are more valuable than AMEX gift cards for manufactured spend.  More, in later posts.
  3. American Express Fidelity
    1. 2% cashback everywhere
  4. American Express Blue Preferred
    1. 6% cashback on groceries, $6,000 max spending per year.  $75 annual fee.
  5. Bank of America Cash Rewards
    1. Soon to be 5.25% cashback on gas for highrollers with Bank of America (100k)
  6. American Express Blue Cash (AKA Old AMEX Blue)
    1. 5% cashback at pharmacies, grocery stores and gas after $6,500 spending per year in those categories.  Very useful for manufactured spend.  Part of my Power Trio.
  7. Chase Freedom
    1. 5% cashback in useful rotating categories.  Very useful for manufactured spend.
  8. Discover it
    1. 5% cashback in useful rotating categories.  Very useful for manufactured spend.
  9. Citibank Dividend
    1. 5% cashback in useful rotating category (hint: pharmacies).  Very useful for manufactured spend.
  10. Bank of America Better Balance Rewards
    1. $25-$30 per quarter for making one purchase per month.
  11. Chase Ink Business Cards
    1. 5% cashback at office supply stores.
  12. PenFed American Express Airlines
    1. 4.25% cashback on airline purchases
  13. Paypal Business Debit
    1. Debit card that can be reloaded from purchases at Drug Stores.  Very useful for manufactured spend.  Part of my Power Trio
  14. Charles Schwab Debit Card
    1. Refunded ATM fees anywhere in the world without limits.  You can go to ATM without thinking about it.

Notice that I have no Airline Credit Cards, no cards that are exclusively points/miles since I personally prefer cashback over miles.  Also, none of these cards have an annual fee except the Blue Preferred, which is clearly worth it in my opinion.

Am I missing anything?  Please comment with your thoughts.