What's In Your Wallet?

There are many credit card rewards programs out there, from frequent flier miles to gift cards to cash back. Credit card rewards have been good to me - for my honeymoon I used my 100,000 Delta SkyMiles hoard to score two roundtrip economy tickets to Europe, saving us $1,000. I accumulated 90% of those miles using Amex's Delta SkyMiles credit card, over the course of two or three years.

However, even though I was successful at scoring free airline tickets, it wasn't an easy process. I had to deal with blackout dates, limited flights, and crazy itineraries. I finally decided it wasn't worth it so I decided to change my credit card rewards to pure cash back. Many experts agree that getting cash back is probably the best form of credit card rewards.

So what it's in our wallet? Last fiscal year, we used Amex's Blue Cash, which is a tiered rewards card that awards 1% for gas/groceries/drugstore purchases (g/g/d) and 0.5% for everything else for the first $6,500 in spending, 5% g/g/d and 1.5% for everything else beyond $6,500. We used the card for nearly every purchase last year, racking up $24,000 in charges, which netted us nearly $460 in cash back (1.9% average payout). Not bad just for using a credit card (note: you must pay off the balance in full each month or the finance charges will cancel your cash back and defeat the whole purpose).

This year though we switched to Citibank's Dividend Platinum Select, which is not tiered. It awards 5% for g/g/d and 1% for everything else, with rewards capped at $300 per year. I got in on a promotion that bumped up the 1% to 2% for me for three months, so that's what we're using currently. We're also using Costco's Amex card for dining out, which gives back 3%. This fiscal year we've received $140 already in cash back.

My personal finance tip of the day: if you're disciplined about paying your credit card balances in full each month I would suggest to apply for these cash back cards. Might as well get paid back for spending money!