Mr. Credit Card, What Do You Think?

[Michael]

For quite some time, I have been using Freedom as my backup to AMEX Blue. I have my three categories automatically billed to Freedom - Internet, Cell phone, land phone, cable, and pet supplies. So, i use AMEX Blue for everything (incl. gas, groceries, and drugstores, all at 5%) and Freedom for the 3% categories and everywhere that AMEX is not accepted (1%).

Then I applied for the Chase Professional card, only for the 3% on restaurants, since we eat out a lot (1-2 times a week, and not at cheap hot dog places).

I now really only want to carry two cards ( and two bills) to keep things simple (so, why did I apply for Professional, to start with?). My wife could not care less about credit cards. I am the one who figures them out.

I was thinking about which card (Freedom or Professional) would be a better backup to Blue? Blue will always be #1, unless they start messing with the rebate % or tier.

I could carry Freedom, but then I give up the 3% at restaurants from Citi. Or I could carry Professional, get the 3% at restaurants, and keep my 3% categories on Freedom (even in the sockdrawer). Or, I could carry Professional and my wife could carry Freedom, and then each of us would not carry the other card.

Actually, once we are past the 3% categories (3 on Freedom and restaurants on Professional), both cards pay 1% on everything else, so is there much difference? Both pay only 1%. Freedom pays out in $50 increments, and if you wait until you get to $200, then they will send you $250. Professional pays in $50 increments, so you lose the extra $50, but you get 3% (versus 1.5% max on Blue) on restaurants.

Freedom is a much older tradeline, going back to 2002. Citi was just opened this year.

I also have Citi Driver's Edge, which pays 3% gas, groceries, and drugstores, 1% all else. Maybe I should use this. It sits in the sockdrawer.

I am at a loss about how to use the Visa and the two Mastercards. They all come after AMEX Blue, which is my primary card. Sould I use only one as backup, or two? Should I alternate them out? Or not?

I would say we spend over $40,000 annually on credit cards, and dining out is about $3800 annually. Groceries, gas, and drugstores are huge expenses also (probably about $17,000 a year)

Any opinions?

[Creditnet.com]

Hi Michael,

I'd recommend you keep using all three cards! Cash back at restaurants is always great, so you should definitely keep your Professional card. An "eating out" credit card is the easiest one to remember to use, and since it's a Visa/MC, it'll be accepted everywhere you can pay using a credit card. The reason you should continue to use your Freedom card is because the last thing you want is for Chase to cancel this tradeline because you stopped using the card. That will not only affect your credit utilization, but it could also lower your credit score because this good-standing, old tradeline has been closed. You could really even stick the Freedom card in your sockdrawer, but still make sure your 3 categories are automatically billed to Freedom so you get the maximum cash back. So every month, you'll know that only $xxx.xx is spent on the Freedom card because of the auto charges.

And if you setup autopay on all three credit cards, life will be even easier (as long as you make sure you have enough funds in your bank account to pay your credit card bills!).

Hope this helps!

[MrCreditCard]

Michael

I have doing more detailed investigation into the whole credit card rebate thing. Another card to add to your arsenal is actually the Discover Gas Card. Here's why

5% on gas (up to $100 a month) - yes, silly cap, but no tiers like blue cash.
5% on travel, home improvement + other stuff (which changes every quarter every year).
5% to 20% from over 100 online retailers - this one is key I think. You can really save a lot of money using the card through Discover's online shopping portal.