My Credit Card Strategy: Making Simplicity Rewarding

I’d like to think my credit card strategy is simple. But I have 10 credit cards in my name and several more in the household.

So, maybe “simple-plus.”

Everyday cash back

I never carry a monthly balance, so I don’t care about a card’s APR or balance transfer features. That adds to simplicity. I care only about rewards. And overall, I evaluate a card’s long-term worth, not its sign-up bonus or other fleeting advantages.

On a daily basis, I use a basic two-card strategy for getting cash back: a rotating-categories card and a flat-rate card.

• Chase Freedom® for whatever the quarterly 5% category is. Grocery stores and restaurants are most useful in my household, categories I have no trouble maxing out for the full $75 cash back in the quarter.

• Citi Double Cash® Card is the workhorse for everything else. Getting 2% back — 1% when you buy, plus 1% as you pay — is lucrative and simple. My college-age sons are authorized users on this card, strictly for essential purchases like textbooks and school supplies.

Why cash back? I could wring more value from cards with a points-based system that I could use in strategic ways — like converting to other rewards currencies or airline miles — but I’m not willing to work that hard. For me, cash is a superior currency because it can be used anywhere.

Optimizing tweaks

I also optimize with other cards, but only if it’s easy. Examples:

• Amazon Prime Rewards Visa Signature Card. This card simply sits in the household Amazon online account as the default payment method and racks up 5% back. No thinking or effort involved. Rewards are applied to future Amazon purchases automatically. In our household, there are always future Amazon purchases, so that’s as good as cash. We already pay for a Prime membership for other reasons. So for us, everything at Amazon is always on sale for 5% off. Looked at another way, we buy enough at Amazon annually that the card pays for our Prime membership.

• Chase Freedom Unlimited®. I applied through a special offer in which this card was paying an uncapped 3% cash back on all purchases for the first year. (That offer has since expired.) So for a year, it will be my flat-rate card in the two-card strategy above. After a year, I’ll revert to the Citi Double Cash® Card. This sounds like it complicated my simple strategy, but it was just a swap of flat-rate cards in my wallet.

Travel cards

These travel cards all have annual fees, and the moment we’re not getting more value than we’re spending in fees, they’re gone. So far, they’re worth it.

• United℠ Explorer Card. This card has been strictly a membership-type of card that gets me free checked bags and two airport lounge passes per year. I fly enough — and check bags enough — that the waived bag fees easily compensate for the annual fee of $0 intro for the first year, then $95. So I use it to pay for United airfare and expenses. I don’t use it for everyday spending and don’t much care about using it to rack up frequent flyer miles. However, Chase and United upgraded the card in June 2018, making it more reasonable to use for some everyday purchases.

• Marriott Rewards® Premier Plus Credit Card. This is my wife’s card. The free anniversary night always makes up for the card’s annual fee of $95. And when traveling, it’s easy to find a Marriott-owned hotel for earning and redeeming points — even easier since Marriott bought Starwood Hotels and Resorts Worldwide. (Note: The Marriott Rewards® Premier Plus Credit Card is no longer available; as part of the rebranding of Marriott's rewards program as Bonvoy, it has been replaced by the new Marriott Bonvoy Boundless® Credit Card.)

Retail cards

I’ve built a high credit score over many years, so in an effort to use the rating strategically I recently opened a Nordstrom credit card in exchange for a huge discount. This is a new philosophy for me.

I’m generally wary of opening retail credit cards, but I know the pitfalls and was certain about their impact on my credit. For example, a temporary decline in my credit scores -- from opening a new account and potentially using more of my available credit -- would not hurt me. And because I would pay balances in full monthly, there was no chance I would pay the sky-high interest rates on the card.

That allowed me to accept the retailer discounts worry-free. My wife did the same with a Pottery Barn card recently when we furnished a home office.

Old cards

Like many people, I have rewards credit cards that aren’t competitive anymore. But, of course, I keep those accounts open so I don’t damage my credit scores.

I try to use each card a few times a year to keep them active -- or keep a small recurring charge on them. The credit card bills autopay from my bank account, so I don’t have to remember to pay cards that aren’t part of my daily life.

Spousal sync

I might be tempted to get more complex with my credit card strategy, but my wife has made it clear she’ll tolerate only so much fussing with different cards for different purchases.

That’s fair. There’s optimization, and then there’s domestic harmony -- something you can’t buy with rewards points.