5 On Your Side

Experts: Use complementary cash-back credit cards for biggest reward

Posted September 14

Cash-back credit cards have changed a lot in recent years, but many users aren't reaping the benefits because they still use the same old credit card that’s been in their wallets for ages.

When it comes to plastic, many people are stuck.

A 2016 survey shows 20 million people have never changed their preferred credit cards. Another 25 million have had their favorite cards for at least a decade.

But loyalty benefits have changed. Now, about half of credit cards that offer rewards offer cash back as an option. That’s up from about 25 percent of cards in 2013.

“While you’re typically looking at 1 or 2 percent back, some cards can go as high as 6 percent cash back on certain purchases, and the consumer usually gets to choose how they want to redeem their reward," said Consumer Reports Money Editor Margot Gilman.

People who already have a cash-back card can double down with different cards: Different cards offer higher rewards for purchases in certain categories.

Consumer Reports found using two cards strategically can earn as much as 40 percent more cash back.

“So, here’s one strategy: You can use a Blue Cash Preferred Card to get 6 percent on groceries and 3 percent on gas," Gilman said. "Everything else can be charged on a Citi Double Cash Card and get 2 percent cash back on all other purchases.”

Wondering which cards will work best? Consumer Reports has a tool on its website.

“First, you plug in how much you spend each year in a number of categories," Gilman said. "The tool then compares 66 different cashback cards to estimate which will get you the most money back after one year and three years.”

An important note, though, cashback programs only count if you pay your balance in full. Otherwise you’ll likely rack up more in interest charges than you’ll earn in rewards.

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