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Sunday, October 7, 2012

Credit Card Cash Back

This is a follow up to post "Saving Money With Credit Cards".  See also "Paying off Credit Cards"

Since that post, I acquired the primary three cards mentioned in the post, and since then flushed out details.
To help you calculate your annual savings, I have put together an Google Spreadsheet, accessible below.

Short version is by getting these three credit cards, you can maximize your cash back from all household spending.   Your spending habits may reflect different categories selected by the USBank card, which offers 12 different 5% categories for cash back.  Fidelity Investments card does require an account to recieve 2% back on all purchases, which may be worth while depending on your spending habits.   A typical American Express or other point systems work out to 1/2% to 1% cash back, excluding travel rewards.

For most families, the 6% Grocery and 3% gas cash back is well worth getting American Express Blue Preferred card. (Max $6000 per year for grocery)
NOTE: if you get two cards, one for him different account for her, can get back on 12,000 per year for groceries!

To access the sheet, click on the image below or the link here.
*WARNING* If someone else is modifying the sheet at same time as you, you will see each other making changes.  To get a private copy select "File" then "Download as" and pick EXCEL. Or come back later when the sheet is not in use.  Look in upper right corner to see if others are viewing the sheet.

I used stickers to mark the cards to make it easier to follow.  You can access the template I used for Avery Template 5162 by clicking here.  It will look messed up, you need to download the file. Click "File" then choose Download.

I researched American Express points, various Citibank cards, and other rewards.  Excluding travel rewards, the cards above are the best rewards I could find.  If you find better, please click the word comments below to add to this post.

After searching the web, it seems cash back is considered a discount, not income.  Only tax implication is if you spend 100 bucks, you can write off 98 bucks (2% Cash Back) as an expense.

Alternately, you can SELL your points for cash, at a 'grey' market vendor I had no issues with, www.rewards2cash.com.  If you sell your points, buy airfare on sale and get points it usually works out better.

UPDATE: I booked flights with Amex points.  The airfare was 841 bucks.  The points to pay for it was 84100 points.  Since each 1 dollar gives 1 point, that works out exactly 1% payback.  Therefore best ROI is to get cards above and simply pay for airfare from cash back, and as bonus get additional 2% off the airfare itself.   It is possible to get special trips for better ROI if shopping offerings.

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