Free Ebook.

Enter your email address:

Delivered by FeedBurner

« Five Common 401k Mistakes | Main | You May Want to Tip Your Hotel Housekeeper »

November 16, 2010


Feed You can follow this conversation by subscribing to the comment feed for this post.

How much of a referral bonus do you get for the links above?

The TrueEarnings card is my husband's and my main card for cash back, because we've never charged enough to justify the Blue Cash and honestly, I didn't feel like switching from a card I love to the Schwab. Last year we got over $500 and before that in the $300-$400 range. I also love that it doubles as my Costco membership card so that's one less card in my wallet.

meb --

It depends on the card. But it doesn't really matter. I haven't had someone get a card from this site in over a year.

If you're implying that I recommend cards because I get a fee, that is not true. I do use affiliate links so that if anyone wants one of these cards, they can "give back" to FMF when getting one. Doing so costs them nothing extra. But you can see that 1) all my income here goes to charity and 2) I only recommend products I use/like (including the cards discussed above) here:

You can also see my ad and affiliate policy here:

True Earnings American Express/Costco card here too. This article is making me rethink my card strategy as I put all gas and some misc on it ($130 cash back earned to date) but other things on a BoA Master Card, a BoA Visa (rare), a Discover card but most of the rest (monthly utilities, etc.) on a Capital One Visa Signature which was graded the best air miles card at the time I enrolled. I think I would be better off using the True Earnings card almost exclusively and keeping maybe the BoA Visa as a universal back-up. Thoughts?

If I close the BoA Matser Card, the Discover card and the Capital One card accounts, will I be pinged? If I owe nothing to no one and have decent net worth, should I even care?

I have the card (certainly makes life a bit easier when shopping at Costco).

Anyway, do keep in mind that you have to go to Costco to get your rebate, and they would like you to spend it on products there. The first year, I had a bit of a problem when I asked for the cash back (no one seemed to know/or wanted to do it.) I did get the $$ though.

The second year, I used the rebate to make a purchase at the pharmacy, and got the remainder back in cash.

I don't think you can go wrong with the True Earnings American Express/Costco card, if all you want is cash back. Been using it for a couple years and have received a pretty decent cash reward on top of the executive membership rebate from Costco. Like you, we pay it off each month and there are never any hassles.

I've got the Amex Costco Tru Earnings card. Works great for us.

Like DW said you have to go to Costco to get your cash back. They send you a check /voucher attached to your statement once a year and you have to go to their store to use the voucher or get your cash.

I am using the Amex/Costco card to buy gas only. For any other Costco purchases, I am using Costco Cash cards bought online with my "Schwab" Visa. This way I can get 2% back instead of the 1% with the True Earnings Amex card and I don't have to wait until February for their voucher.

I'm surprised that you haven't considered the Fidelity Amex card. It gives you a straight 2% back on all of your spending, no minimums, no limits. It sounds like the only advantage the Costco card has is that you get 3% on gas. Otherwise, Fidelity beats Costco hands down.

My main card is probably Citi Forward for dining, PenFed Visa for gas and Fidelity Amex for everything else (which isn't much - AT&T bills, costco, maybe target) - but once in a while I'll get these random offers, like from the Amazon Visa, if I spent more then $1600 in Q4 2010 then I receive 2 bonus points per transaction...which makes 5% on amazon, 4% on dining and 3% on other I am using that one these days. I normally wouldn't spend that much in a quarter on a single card, but I had a big car repair, so I am using that alot at this time and Citi Forward's pretty much on the backburner. Chase Freedom is giving a 20 bonus points per transaction until the end of the year if you sign up in branch and use the checking account, so I am using that for all transactions < $5.

I also have utilized Discover and Chase Freedom for bonus categories, but who knows if it was really worth it. When it's all said in done I think Penfed is the strongest because it's automatic and no games with points...with the Fidelity Amex, it is 2% cashback, but you have to spend $2500 to see your $50. I don't think I spend enough on that card for it to be significant...but it is an extra $25 per $2500 spent. So maybe it is worth it....

The Costco Amex and the "Schwab" Visa are the best combination if you want to restrict the number of cards to two, but don't forget to factor in the annual Costco membership fee. To add a third, consider Fidelity Amex for 2% back at Costco. A forth card could be either Discover or Chase Sapphire for the occassional 5% reward. This quarter, Chase Sapphire is giving 5% back on "almost everything": gas, restaurants, grocery, drug, club memberships, utilities (including cell and internet) and local transportation. All without dollar limits. Discover is giving back 5% at restaurants and department/fashon stores, but only on up to $300 of purchases.

I too stopped using the BlueCash card after I got my annual rebate last month; I use a combination of the above six cards now and going forward.

I'm sure other combinations of rewards are out there, it really just depends on how many cards you want to juggle. Personally, I treat it like a game and earned back almost 3% last year including on some large ticket items like all insurance (health, auto, home) and major appliances.

Nashville --

I'm writing a post on what I do, but I use a combination of the Costco Amex and the Schwab 2% Visa (closed for new members but you can get the Fidelity card) as my two-card strategy.

stoihi --

GREAT tip! I'm going to put that in a post!!!


See my comment above to Nashville.

KaseyD --

Yes, that's what I do. Also, my Costco membership is free -- paid by my employer.

Nashville --

Sorry, I forgot to answer your other question.

I'm guessing you will be pinged a bit on your credit score if you close a card. But I don't think it will hurt you that much if you owe nothing and have decent net worth. That's the same situation I'm in, I've closed a card, and it hasn't hurt my credit score.

Get the Costco Business AmEx... 4% on gas is fantastic!


I think you'll get pinged quite a bit if you close so many cards. A good chunk of FICO (I forget but think it's in the 25%-30% range) is based on available credit. Eg., if each card has a $10k credit line and you close 3 of your 4 cards, your total available credit drops from $40k to $10k. The more unused credit you have, the better from a FICO standpoint; so you are considered a better risk keeping the cards open with $0 balance.

The only cards I recommend closing are department store cards, I've been told that they count against your credit score. I'm of the opinion that even if you don't need the credit, it might someday come in handy to keep the score as high as possible. It might get you a better mortage or car loan rate some day. Or land you a better job offer!

My general strategy for cash back is this:

1. Fidelity Amex as my default card (2%)
2. Discover for 5% cash back categories. You gotta be careful, though, because Discover puts maximums in the fine print of their 5% offers. Also, I use my Discover cashback for gift cards which boosts a $40 reward to $50.
3. USAA Mastercard for 3% cashback on gas
4. Amazon visa for 3% on Amazon purchases

I also have a Hilton Honors Amex that I use for hotels to boost my Hilton points, and a Continental Mastercard which I only have because you get one free checked bag for everybody travelling on your reservation which makes up for the annual fee.

I don't shop at Costco, but I do shop at Sam's club. They take Discovercard, but not Visa or Amex. When I feel like playing the maximum cashback game, I will use my Schwab Visa to buy Walmart gift cards which can then be used at Sam's club.

For me, that is the best one-card strategy. It is a hassle though. I don't go into Walmart for anything else usually so it is an extra stop. Then I have to know approximately how much I plan to spend. The gift cards are effectively one-time use because they seem to go bad VERY easily, which requires an annoyed checkout clerk manager to come over and type in the number while using some kind of authorization key.

I often just use my Discovercard out of convenience and effectively halve my cashback rewards on that trip.

The Costco/AMEX card is great. We charge our restaurant meals on it and this year we also charged a very expensive vacation on it so we have about $500 in rewards coming to us in February.
Fortunately when my wife and I applied for separate Costco/AMEX cards they gave us each the identical very high credit limit that we also had on our Fidelity Mastercard which came in very handy for the large vacation charge. I also like to make any large charge so that it shows up just after the current closing date - that gives me the use of the money for another month and even though our credit union saving account is now only yielding 1%, another 1% for a month is better than nothing.

Altogether we use 5 credit cards altogether.
Two Costco/AMEX 3%, 2%, 1%
One Fidelity M/C 1.5%
One Fidelity AMEX 2%
One Amazon Visa used only at Amazon
Naturally, like most readers of this blog I also never, ever pay interest to anyone.

Another way to save a few bucks is to use a calling card for international and long distance calls. I use one called BIZON from that is only 1.8c/min in the continental USA and 1.6c/min for calls to England. Most cordless phones these days come with a built-in phone number directory that allows you to program in the complete calling sequence even with any pauses that may be necessary so it's totally convenient to use.

My brain says we should simplify things from the multi-card strategy we've employed that employs no less than a half-dozen different cards every month, but we haven't. That having been said, 90% of our charges employ the highly-recommended Schwab/Costco Amex two-card approach, but we still maintain:

--A Chase Mastercard that gets us 3% back at restaurants and gas stations (a few we patronize don't take Amex), hardware/home improvement and office supply stores.

--A few different retail-branded cards that offer 5% in scrip back on purchases from their stores/websites

--A Discover for their 5% bonus categories (most of which are only good for a few hundred dollars worth of purchases).

We are charging perhaps a few hundred dollars a month on Discover to milk the bonuses, but their targeted marketing suggests they realize we are "big fish" charging approx. $5K/month on all of our cards combined. We get all sorts of special limited-time bonus offers from Discover that are clearly designed to train our minds into making them our go-to card.

Last year, I got one from Discover that offered 3% back on all purchases over three months, up to $6,000 worth--but only if I charged at least $1,500/month. If I didn't meet that requirement, I would get NOTHING. (Didn't take them up on this.)

Two weeks ago, I got a nice holiday card from Discover offering a $1 bonus rebate on my next 20 transactions made before December 15. I'm taking them up on this for relatively small purchases, but tracking the number of them carefully.

Throughout the year, there's an occasional postcard offering things like a one-time $5 bonus for patronizing a specific merchant, and savings coupons from retailers that normally don't offer these (if we charge the sale to Discover).

I would gladly give Discover most of my business if I could somehow convey the message "Come up with something better than 2% on everything, and we'll talk." I realize that isn't going to happen, so for now I just watch my mail and their website carefully for the bonus offers.

Stolhi, thanks for the tip on the Costco cash cards, as our Costco shopping is the only thing we ever charged that doesn't earn us at least 2%. My only hesitation is the possibility of losing the cash cards--is there any way they can be replaced? I don't know that it's worth the risk for the extra 1% to give up the security of using a credit card, and would only consider this approach if I knew I could use up the cards' value quickly after purchasing.

I like Costco's Amex card and the membership fee isn't unreasonable, but we do most of our warehouse club shopping at BJ's, which takes VISA. We buy enough there to make up the cost of their upgraded membership, which earns us an additional 2% rebate.

The AMEX Blue Cash becomes far more powerful when you charge it up $6.5k in spending. How to do that? Buy coins from the US Mint and deposit them back into a bank account. It takes a little while, but it's well worth it.

My strategy:
5% off gas, groceries, drug store purchases with my charged-up AMEX Blue Cash
5% off rotating categories with Chase Freedom and Discover More
5% off purchases, Ebay, clothing merchants, etc. by buying gift cards with Blue Cash at my CVS
5% off (instant) Target purchases with my Target RedCard
2% off everything else with my "Schwab" card

It sounds like a hassle, but it really isn't. It takes about 2 seconds to figure out which of 5 cards to use, and I'm saving hundreds of dollars a year doing it.

I'm a big fan of my Perkstreet debit rewards card which earns 2% on all purchases. The best part is, I no longer have to use credit cards!

I have 3 cards in my wallet:
5% off gas with my PenFed Visa.
5% off groceries at Target using Target Visa, otherwise groceries get 2% on the PenFed Visa.

For everything else:
My main card is a Southwest Airlines Visa from Chase.
Despite the annual fee, it's a great deal for me.

As always, each and every card is paid online,
in full, well before the due date.

Old Limey --

For international and long distance calls, check out I've been using them for at least two years and I am very happy with them. Prepay $10 and you get 90 days of free calls (with a limit of 300 minutes over the last 7 days) in the continental USA (landline and mobile) and many other countries (landline only). After the 90 days or if the limit is exceeded, your $10 will be used and the rate in the States is 1c/min. I believe England has 90 free days (landline), 2c/min thereafter. And yes, you can program in the complete calling sequence. In the past, I used to pay over $100/month when calling internationally. Now I am paying only about $30/year! That's a savings of over $1000 a year!

I was also in the same boat as you, and finally figured out PenFed Visa and Fidelity AMEX as the combination that works best for me. I have also created an excel sheet for easy comparison between credit card.

Happy Savings!!

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.