Credit Tips: Great Credit Card Combinations for Rewards

Posted On: April 3, 2007

Author: georgee
Posted: Tue Apr 03, 2007 5:34 am
Post subject: Credit Card Combo

I use AMEX Blue for everything, a Visa for backup when AMEX is not accepted, and Discover Gas only until I reach the AMEX $6500 tier or for auto repairs, which are minimal.

If I cut out the Discover Gas altogether, and just use the AMEX for ALL gas (about $325 monthly), I presume that I will reach the 5%, 1.5% tier for AMEX sooner, and thus, earn more rebate on AMEX than I would have if I had stayed with Discover for under the $6500.

Will this make up for the rebate I will lose in the beginning (under AMEX $6500 tier) by not using Discover?

I would like to get down to two cards, but only if I don’t lose money. I charge about $40,000 annually, and about $35,000 is on AMEX.

Author: hdporter
Posted: Tue Apr 03, 2007 6:11 am
Post subject:

Ok, so here’s some math:

You currently spend $35K in annual Amex purchases, and about $4K in gas on Discover Gas at present. Call it $9 Amex for every $1 gas (or gas = 10% of purchases).

So, right now you’re earning 5% on that $4K gas, or $200. If you move that $4K of gas to your Amex card, your total Amex purchases go to $39K.

Of the first $6500 in Amex spending, $650 can be expected to be on gas (10%). You earn 1% on that ($6) vs. the 5% of Discover ($32), a reduction of $26. The other 3350 in gas purchases will earn the same rate on Amex as they currently do on Discover.

You’ve displaced $650 of Amex purchases currently in the first $6500 of spending with gas, so now that $650 (in being bumped up to the next rebate tier) now earns an addtional 1% ($7).

To, all told, the impact of moving your gas to Amex will be a decrease in annual rebate of about $20.

Author: LustfortheMoment
Posted: Tue Apr 03, 2007 7:28 am
Post subject:

Porter’s assessment seems pretty cogent.

I use my 5% HSBC or Chase Reward cards for EDP and AMEX for non-EDP until I reach the $6500 tier. Then I switch to AMEX for everything. Unfortunately, the HSBC and Chase cards are no longer available.

Author: georgee
Posted: Tue Apr 03, 2007 9:34 am
Post subject:

Dear hdporter:

Thanks for your response BUT . . .

Discover Gas has a $1200 annual spending limit for the 5%. So you can only earn $60 at 5%. After that, the usual crummy Discover card rebate percentages apply, which I would never use.

Please advise how this changes your math. I am kind of dumb when it comes to Math ( but great with grammar).

Author: hdporter
Posted: Tue Apr 03, 2007 3:21 pm
Post subject:

georgee wrote:
Discover Gas has a $1200 annual spending limit for the 5%. So you can only earn $60 at 5%.

In that case, the Discover Gas earning on $4K of gas purchases would be $88, not the $200 I originally suggested.

I originally indicated a net decrease in total purchase rebates of $20 from moving your gas purchases from Discover Gas to Amex. Instead, your rebates would be increased by $92.

Labels: Accessing the Most Rewards From Credit Cards, Working Credit Cards To You Advantage