The Ultimate Cash Back Credit Card Strategy

Recently I published a review of the Blue Cash Everyday from American Express credit card. With the preferred version of the card, you earn 6% cash back at the grocery store. That’s a huge return, and it got me to thinking–could a typical family earn $1,000 a year or more in cash rewards simply by using the right credit cards?

I call it the Ultimate Cash Back Credit Card Strategy.

The trick is to use the right card for the right purchase to maximize your cash back. The approach takes some effort. You can’t maximize your rewards by using just one card. But you can get excellent results with just a few credit cards. To get you thinking along these lines here are a few things to consider:

  • Understanding how the rewards program works: Understanding how the rewards program works is a must. Many of the programs have limitations or caps on how much you can earn. For example, some cards might offer 5% cash back, but it’s on rotating categories that change every three months and there are caps on the amount you can earn.
  • Seek out cards with double or triple points: The standard cash back reward is 1% or 1 point per $1 spent. But there are cards that do much better. Go for the cards that offer more bang for your buck.
  • Pay monthly bills with a credit card: Consider paying some of your bills with your credit cards as a way to rack up some points. While some won’t let you pay with a credit card (e.g., your mortgage), many bills such as your cell phone, cable, internet, and even garbage collection accept credit card payments.
  • Use a Business Card: If you are a business owner you might be able to add in a business card as part of your strategy. Many business rewards cards have a higher rewards cap. For example, instead of earning double points on gas purchases up to $2,500, you might earn double points on up to $5,000 in gas purchases.
  • Find cards with sign up bonuses: Take advantage of cards that offer a cash back bonus offers to new card members.

With these factors in mind, it is absolutely possible with modest spending to earn $1,000 or more a year in free money by using the right credit cards. Below I’ve listed my top cash rewards picks for common spending categories. Then will put this strategy to the test with some modest spending assumptions.

Best Card for Grocery Shopping

Without question the best cash back card for grocery shopping is the Blue Cash Preferred Card from American Express. It pays 6% cash back on groceries up to $6,000 in purchases each year. You also get a $150 bonus when you spend $1,000 on the card in the first three months of card membership.

For those looking for an alternative to an Amex card, here you go:

BankAmericard Cash Rewards Credit Card: 2% back at grocery stores

Barclaycard Rewards MasterCard: 2x rewards on groceries

U.S. Bank Perks+ Visa Signature® Card: 2x rewards on groceries

Note: You can compare these and all of the cards mentioned in this article at

Best Card for Gas Purchases

The best card for gas goes to the PenFed Visa Platinum Cash Rewards Card. With this card you’ll get 5% back at the pump. Note that PenFed is a credit union, but you don’t have to be in the military to join.

Alternatives include the Blue Cash Preferred card by American Express mentioned above. It pays 3% cash back on gas, as does the BankAmericard Cash Rewards credit card.

Best Card for Dining Out

The Chase Sapphire Preferred Card wins the honors for eating out. Apart from being one of the best all around credit cards available today, it pays 2x points at restaurants.

Best Travel Card

It’s hard to pick the “best” travel card. There are several top options, including the Chase Sapphire Preferred Card mentioned above. The card I’ve used the most, however, is the Capital One Venture card. You earn 2x miles on every purchase. And it’s very easy to redeem the miles for travel related expenses through Capital One’s Purchase Eraser website.

Apart from these two options, and third solid choice is the Barclaycard Arrival Plus card.

Best Card for All Other Purchases

For your general cash back card you want one that pays 2%. That honor goes to the Citi Double Cash card. The card pays 1% on every purchase + another 1% when you pay for the purchase. It’s the card I use for everyday spending.

Calculate Your Earnings

Using the same figures and categories we discussed above you can review the table below to see just how much you can earn if you play your cards right. The table reflects an estimation of what reasonable monthly expenses for a family of four would be in the following categories: grocery shopping, gas purchases, dining out, travel expenses, and other purchases.

CardCategoryMonthly SpendingAnnual Cash Back
Blue Cash PreferredSM from American ExpressGroceries
Visa® Platinum Cash Rewards CardGas
Blue Cash PreferredSM from American ExpressDepartment
Capital One VentureTravel
Chase Sapphire Preferred CardEating
Citi Double CashOther
Total Annual Cash Back$1,044

Note that the cash back on groceries takes into account the $6,000 limit on the Blue Cash Preferred card. I assumed 2% cash back using a different card for $3,000 of the grocery costs. So even accounting for annual fees, saving $1,000 or more a year with the right credit card is not difficult. And many families spend far more than what’s listed in the table.

Should You Consider a 5% Rotating Category Card?

To earn even more, consider using a card like the Discover it® - New! Double Cash Back your first year that gives 5% cash back in rotating categories. The categories change each quarter and there is a spending cap of $1,500. As we mentioned above, understanding these details can help you plan your strategy and maximize your earning potential.

If one of the quarterly categories is dining out, then consider using this card to receive 5% back on the first $1,500 you spend dining out – this is $75 back. Once you reach the $1,500 spending limit then switch over to another card (like the TrueEarnings(R) Card from Costco and Amex – 2% on dining out) that gives cash back for these same purchases.

Remember: You can compare all of the cards mentioned in this article at

Published or Updated: September 30, 2015
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.


  1. Philip says:

    Well done, Rob. Another possible add on is to buy restaurant gift cards at the grocery store. That way you could get 6% back on some dining out expenses.

  2. Ryan says:

    Nice way to maximize points! I second Phil on this one – the AmEx Blue Cash Preferred is awesome, and one that I signed up for a few months ago. We’ve already earned a nice cash back bonus from them. In addition to restaurant gift cards, you can buy gift cards for major expenses you are planning, such as Home Depot or Lowes, Best Buy, etc. The other thing to look out for is how stores are coded. For example, if you buy groceries at a Target superstore, it may not be coded as groceries, and you may not earn the full 6% cash back. On the flip side, some big box “superstores” are coded as groceries, so you may be able to earn additional cash back on non-grocery purchases.

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