FG Trade/Getty Images
The best credit card rewards differ from person to person. The author is not pictured.
Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.
- 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.
Read More: This is the only rewards credit card most people will ever need to open
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.
Read More: People often ask me what the single best credit card is for travel rewards - here's what I tell them
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.
Read More: Why this seemingly expensive credit card is worth its annual fee - especially for anyone who travels
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.
- Read more about the best rewards cards:
- Marriott's new $95-a-year Bonvoy Boundless credit card comes with a 100,000-point sign-up bonus - and other valuable travel perks
- The best credit card rewards, bonuses, and benefits of 2019
- 7 reasons the Chase Sapphire Preferred is worth it - even though the card doesn't come with as many flashy perks as the Sapphire Reserve
- Apple's 2%-cash-back credit-card rewards are interesting, but I'm convinced people are overlooking the best part
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.