Credit Card Rewards for 2011

Like I did last January, I just finished tallying all of our credit card rewards for the previous year. I do that mainly out of academic curiosity, but also to have evidence to justify our approach to credit card usage to my wife!

As before, we do pay off our cards in full every month, so the interest rates on the cards are almost negligible. This year, we kept the same cards as last year - the Citi ThankYou Premier Mastercard, the PenFed Platinum Cash Rewards Visa, the Chase Freedom Visa, and the Costco TrueEarnings American Express. We also added the Chase British Airways Visa in order to get a 100,000 mile rewards bonus. And we pay our cell phone bill every month with an AT&T card just to get the 5% points there.

The Citi Premier card allows us to earn points for every mile we fly, and redeem those points at a rate of 1.33% for airfare. The PenFed card earns 5% cashback on gas purchases and 1% everywhere else. The Costco AmEx earns 3% cashback on restaurants, 2% on travel, and 1% everywhere else, and finally the Chase Freedom, which is our everyday usage card, earns 1.1% on everything, with quarterly 5% categories. We used the British Airways card to fulfill the spending requirement in the first 3 months and earned 100,000 additional points (which we're using for a Europe trip this spring!), but once we reached that threshold, we didn't use it anymore.

We're not tremendously picky about which card to use. Both the Citi Mastercard and the AmEx have great benefits for extended warranties and purchase guaranties. With all that, our spending is spread out a good deal over all the cards.

In addition to credit card rewards, I've been purchasing gift cards online for discounts at stores we frequently visit, primarily Target, Trader Joe's, and Home Depot. Gift Card Granny is my favorite place to find available discounted store cards. We bought a new stove this year and saved 7% at Sears, and also bought Jamba Juice cards (20% discount) and American Airlines cards (10% discount) at Costco. We've also taken advantage of periodic promotions from Chase's Ultimate Rewards program, the best of which was a 10% points bonus on purchases from Apple.

Running all those numbers show that, giftcards aside, we had an aggregate rewards basis of 3.5% this year, slightly better than last year's value! Including the gift cards, we saved close to 4.5%. Looking at the gift cards alone, we averaged a bit over 6% savings.

Included in the Citi number is a 3-month retention reward, a $20 bonus from Mastercard, and a 2500 point Facebook promotion. Included in the AmEx numbers are $25 from Small Business Saturday and$7 from an iTunes bonus.

Moving forward, the PenFed card is transitioning to a point rewards system so we'll be taking advantage of the $200 bonus for reaching a spending threshold this spring.

All in all, I'm satisfied that we're taking healthy advantage of the rewards being offered by the credit card companies, without adding spending that we wouldn't have made otherwise. And we can use the rewards for travel!