After years of trying to maximize my credit card points I stumbled on a system to get the most value from my daily spending, and I'd tell anyone to try it

Kamran Rosen

Mar 28, 2019, 23:51 IST

After years of trying to maximize my credit card points I stumbled on a system to get the most value from my daily spending, and I'd tell anyone to try it

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The best credit card rewards differ from person to person. The author is not pictured.

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Trying to find the perfect credit card can be overwhelming, because each card has a different system of rewards.
After years of trying to find that perfect card, Kamran Rosen stumbled across a strategy that worked better for him: creating a collection of cards that reward each of his biggest spending categories.
He found a collection of five cards means he's never getting less than 2.5% cash, or cash equivalency, back for his daily spending.
For him, those cards are Amazon Prime Rewards Visa Signature, Uber Visa Card, Chase Sapphire Preferred, Banana Republic Visa Card, and Bank of America Cash Rewards.

When it comes to credit cards, it seems like a lot of people have one big question: How do I maximize my rewards?

After struggling with this question for several years myself, I finally stumbled on a method that made everything easier for me. Instead of thinking "What's the best card for me?" I started thinking "What's the best card for a given type of purchase?"

From there, I bracketed the vast majority of my spending into five categories, and from there picked cards that maximized my rewards for each.

Does it get confusing? Not at all. Not only do I maximize my rewards by bracketing my purchases by five categories, but I've optimized to make redeeming points for cash a breeze as well.

Below I'll show you how I used a basic understanding my spending habits to pick five cards that ensure I'm making up to 5% back, in cash or in cash equivalency, on almost every purchase.

Let's get started.

First figure out: How do I spend my money?

To earn rewards, you have to know how you're spending your money. For me the breakdown goes something like this:

Online purchases
Restaurants and bars
Travel
Clothing
Groceries and gas

While the order and amounts probably change person to person, I believe that basket of goods is a pretty good representation of how most people spend their money. Optimizing how much you spend on each card is up to how you spend.

Now here are my picks for the best cards by category.

Keep in mind that these picks are based on spending, not on sign-up bonuses. Other cards might have sign-up bonuses that make them the right fit for you and your needs. For instance, Delta is doubling its welcome bonus miles on many of its cards for anyone who signs up before April 3, 2019 - you can find more lucrative sign-up deals for March here.

Online purchases: Amazon Prime Rewards Visa Signature

A whopping 5% back for all purchases on Amazon - which, last I checked, supplies basically everything in existence. As a Prime member, I've gotten everything from new TVs to toothpaste delivered to my doors with free two-day shipping.

Plus Prime members pay no annual fee on the card (meaning the card is profitable immediately), and unlike some sites that require redeeming through a portal, the Amazon Prime card transfers cash into your Amazon account with the click of a button. Arguably my most recommended card to my friends.

Dining and restaurants: Uber Visa Card

This one is a sleeper pick among credit card experts, but I'm a huge fan. Living in San Francisco and New York, Uber is basically a utility for getting around, making credits to your Uber account as good as cash.

The 4% back for restaurants and bars (plus Uber Eats) is better rewards rate than almost any card geared to dining enthusiasts - and like Amazon, using the points requires a tap in your Uber app. Just eat, pay, and tap to get instant credits to your Uber rides.

Travel: Chase Sapphire Preferred

Personally what I love best about this card is its flexibility of use. You can book on virtually any airline (with very few blackout restrictions) and earn travel points for any trip.

While I'm not a big fan of having to use portals, the Chase Sapphire Preferred one is very well designed, making purchasing and using points or combining points and cash very simple.

Plus with a whole host of benefits under both the Visa Signature and Chase Preferred brand, I value my return at about 2.5% based on my earning and redemption patterns. The card gets two times the points on travel and dining, plus 25% more value when redeemed through the portal - not to mention benefits such as access to lounges and hotel discounts as well.

Clothing: Banana Republic Visa Card

Another hidden gem, the Banana Republic card is a great example of how brand loyalty can pay dividends. I do one large shopping spree every season at Banana Republic, and which with a high return rate of 5%, nets me about $100 back a year.

Plus, with the addition of exclusive member discounts you're able to use on top of existing coupons, it lets you leave the store guilt-free knowing you've gotten the best possible price (seriously, I've gotten 60% off before).

While I like the Banana Republic family of brands - including Gap and their sports apparel Athleta - I'd recommend picking a card for whichever brand where you shop consistently.

Gas and groceries: Bank of America Cash Rewards

My first card out of college, this is a little cash rewards card that can. It offers 3% cash back in your choice of category each month (including gas, online shopping, and dining) and 2% cash back at grocery stores and wholesale clubs on the first $2,500 spent in combined choice category/grocery/wholesale club each quarter; then 1% thereafter.

I look for my little red card when it comes to the staples of life (unless I'm shopping at Whole Foods and then it's back to the Prime Card). Hidden hack: A lot of convenience stores, including 7-11, count as "grocery," giving this card high utility where others might only give you 1%.

There you have it. Bucket, bracket, and save. Maybe you swap out one or two of these cards for something that suits your needs more directly, but the point is you can almost always find high rewards for any purchase if you're willing to think holistically about your spending.

Keep in mind that we're focusing on the rewards and perks that make these cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

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