The Best Way to Use Reward CC?

[Peach8321]

Hi all,

I'm in need of a bit of advice on using my reward CCs.  First, I ALWAYS PIF each month (even if something shows up on the statement it has no finance charge).  Second, I have no interest right now in adding new cards, so work with what I've got please.

I have:

PenFed Cash Reward Visa - 13.99% APR - $9,500 limit

USAA MC - 7.75% APR - $24,000 limit

USAA Amex - 9.9% APR - $14,000 limit

VS CC - 24% APR (?) - $680 limit (VERY rarely used - usually once every 6 months to keep alive and paid off 2 days after purchase)* (not reward but only other CC)

Right now, I'm using PenFed for gas, MC for "other", and Amex for my cell phone... (iphone = $78/mo) where "other" is food, clothes, presents and other items just for me (my husband and I only use checking accounts for regular joint spending).

The problem is that both the MC and Amex get poorer rewards - 1 point/dollar and 3,000 points = $25 dollars.  However, I have our joint reward checking account tied into the total rewards program as well so that brings in around $850/mo additionally (2 points per dollar = ~425 points per month) - if that matters.

My concern is that my MC is the highest limit and I want to be loyal to USAA (and keep my limit high and APR low, just in case).  However, I guess that means I'm loosing $5 for every $3000 I spend by going with USAA MC & Amex over PenFed (for the "other" category).  That said, at most I generally only spend $4000-5000 per year (depending on buying airline travel and not including gas).  So that's a "cost" about $5-7 per year to use USAA more instead of PenFed - do you think that's reasonable?  Should I put anything "big" (ie, over $100) on PenFed and smaller stuff on MC?

Any suggestions for me or comments?  I just want to make sure everything goes smoothly as I use CC more and more (added the Amex and PenFed within the last calendar year so juggling multiple cards is fairly new).

Thanks!

[haulingthescoreup]

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@Peach8321 wrote:

PenFed Cash Reward Visa - 13.99% APR - $9,500 limit

USAA MC - 7.75% APR - $24,000 limit

USAA Amex - 9.9% APR - $14,000 limit

VS CC - 24% APR (?) - $680 limit (VERY rarely used - usually once every 6 months to keep alive and paid off 2 days after purchase)* (not reward but only other CC)

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I have the first three cards as well. I have found that USAA doesn't seem to mind my not using my AmEx much. Here's what I would suggest:

PenFed for gas (5% at pump) and grocs (2% at real grocery stores)

USAA MC for pretty much everything else

USAA AmEx for occasional big-ticket items, for the purchase protections

VS for, ummm, what VS sells

PenFed dropped their "everything else" category from 1.25% to 1%, so there's no difference in rewards between them and USAA, other than with USAA, you don't get the rewards every month. A $100 purchase with either card is still only going to get you $1 in rewards.

If your MC is a World MC, it pretty much has the same coverage as the AmEx, but at least this is one way of deciding which to use when.

I've done better with USAA rewards for airline tickets than with cash back, so I go with that.

Are you newish with USAA? I need to call and ask about that checking account tie-in, which I've never heard of. Unless you're talking about their debit card paying 1/2%, which isn't a ton, but it's certainly more than most debit cards.

[Anonymous]

1% cashback is unacceptable. I'd keep your USAA MC and AMEX, use them occasionally to keep the accounts active, but get a FIDELITY AMEX 2% card which you could use for everything but gas.

http://personal.fidelity.com/global/search/inquira/resultsindex.shtml?question=amex

Good Luck,

[Anonymous]

I agree with hauling's approach. Here is what I do:

PenFed Cash Card: Gas (5%) and Groceries (2%)

Amex Zync w/ Style Pack: Department Stores (2%) and Everything Else Not Listed (daily card)

CitiForward: Restuarants, Movies, Books, Amazon, and Entertainment (5 points for every $1 in these categories)

USAA MC: USAA Monthly Insurance Bill (auto payment)

USAA Amex: Big Ticket Items (for extended protections)

I usually get back $350 - $600 a year in rewards. Might sound complicated, but it just works for me...a lot ofit habitual now.

I also have a chase card and BofA card that will probably die a natural death by each CCC soon.

[Peach8321]

Hauling, thanks for the advice.  I do have a World MC so protection is the same for both but good to know I don't have to necessarly use it every month or something bad will happen. Just to be clear, a $3000 purchase with USAA will get me $25 and a $3000 purchase with PenFed will get me $30 - but I agree that for $6-7ish a year, it's not worth potentially upsetting USAA.  As for the airline tickets, only the first option they have (15,000 points = $150 for ticket) is better than the cash option, otherwise the rewards are the same and I'd rather have the cash earning interest as it would take me almost 5 years to make up to the minimum for air!
I'm not new to USAA, I've been with them awhile - the checking account tie in I'm referring to is the "total rewards program" in which you have one big pot and all the accounts go into that pot (for one user) so my MC, AMEX, and two checking accounts all go into the "total rewards" pot but you are right that the 2 points for 1 dollar is equal to 1/2% back - not great but it adds up.

Lust, I agree that 2% back would be more ideal but I promised my husband I wouldn't get any more cards for at least 3 more years :-/  Perhaps I will reassess my cards then and get PenFed (5% gas) + Fidelity (2% back all else) + USAA MC (big items and best protection)...for now though I work with what I have.

Pj, I'm impressed at how well you balance so many cards!  I assume you don't carry the USAA cards around with you?  Good to know that they don't mind you using such a small amount with them.

Thanks everyone for the help!