Credit Card Tips How to combine credit cards to earn maximum cash rebates

Credit Card Tips How to combine credit cards to earn maximum cash rebates
Nick Lian

Before we look at how to best combine cash rebate credit cards to maximize the cash rebates you can earn, it is very
important to understand the different types of cash rebate credit cards available and
also how the type of purchases you make is defined and segmented in this market.

Types of Cash Rebate Credit Cards

The first type of cash back credit card is what we call the "basic no-frills" cash
rebate credit card. These pay the standard 1% cash rebate on your spending.

The second type is what we call the "everyday purchase" cash rebate credit card. They pay
more than 1% rebate on "everyday purchases", which in most cases is defined as purchases
made at standalone supermarkets, drugstores and gas stations (Discount outlets are
excluded). They will pay 1% rebate on "other purchases".

Then there are "tiered rebate" cash back credit cards. These cards pay more than 1% on
all purchases after your annual spending exceeds a certain amount. Some credit cards
require that you carry a balance to earn "maximum rebates". Spending below the threshold
level will earn less than 1% rebates. Some tiered rebate credit cards also pay
different rebates for "everyday purchases" and "other purchases".

Understanding "Everyday Purchases" and "Other Purchases"

The key to maximizing the rebates you can earn from cash back credit cards is to realize
that your spending can be split into "everyday purchases" and "other purchases". Just to
recap, "everyday purchases" in most cases is defined as purchases at standalone
supermarkets, gas stations and drugstores (discount stores are excluded). If you
have just a basic, no-frills cash rebate credit card, all you can earn is 1% rebate.
You can improve this by getting a "everyday purchase" cash rebate credit card and earn
more than 1% on your "everyday purchases".

Many people do not like tiered rebate cash back credit cards because of its complicated
tiered rebate formula. You have to spend above a certain amount to earn the maximum rebates.
In some cases, you have to carry a balance to earn maximum rebates. However, tiered
rebate credit cards have something that neither a "basic no-frills" or "everyday purchase"
cash back credit card has. It allows you to earn more than 1% rebate on "other purchases".

Combine "everyday purchase" and "tiered" cash rebate credit cards

Hence, the best strategy to earn the most rebates is to combine an "everyday purchase"
cash rebate credit card and a "tiered rebate" credit card. The strategy would be to charge your
"everyday purchases" to the "everyday purchase" cash back credit card (earn more than
1% rebate) and charge the rest of your "other purchases" to the tiered rebate card.
Once you exceed the annual spending threshold on the tiered rebate card, you will earn
more than 1% rebate on your "other purchases". This combination allows you to maximize
your rebates for both your "everyday purchases" and "other purchases".


This strategy requires that you charge quite a bit to your credit cards. It will not work for those who spend only up
to around $10,000 to $15,000 a year because with most tiered rebate credit cards, you probably need to
spend above $6,000 to earn maximum rebates. Any annual spending below that amount
will only earn you less than 1%. Hence, you need to charge about $15,000
to your tiered rebate card to earn more than 1% rebate on your total spending. You also
have to be diligent in using your cards at the right places and monitoring your rebates.

You can read more about cash rebate credit cards and strategies and our recommended
cash back credit cards at our
cash rebate credit card
, credit card strategy
or Editor's Choice of Best Credit Cards page.

Nick Lian
Owner of Credit Card Reviews and Tips, a credit card site which writes independent and unbiased reviews and provides tips and strategies to help those looking for a credit card.