Back to Basics: Credit Card Spending

Opening credit cards isn't the only way to gain points with credit cards, spending on them can pay out very well too, knowing how to do that is a fine art. Knowing how to pay on what card for what purchase can help bring in lots of points and be just as important as credit card signups. 

Many of the best points earning cards have bonus categories. No one card covers all bonus categories that same, so knowing which one to use in which situation will help maximize your earnings. Also, being able to diversify which company you make purchases on will let you earn points with many different companies. Diversification helps protect you from what seems to be a non-stop devaluing of loyalty programs.

Lets just look at how I tend to spend as an example. In my mind, real life examples give the best learning tools. 

Lets say I have a busy day planned and need to do the following:

  • Fill my car with gas
  • Meet my fiance for lunch
  • Go grocery shopping
  • Book a vacation for us
  • Buy some cat litter

Buying Gas

I start my day by making my way to the gas station. Once there, I need to decide how to pay for the gas. Normally I spend $25-$30 for gas, lets just use $30 as an example. If you pick the wrong card, you get 30 points, choosing the correct card grabs you 90 points. There are certain cards that gain you bonuses on gas purchases, in this case I use my Citi ThankYou Premier card. This card gives 3x points for any gas purchases. If you don't have a Citi Premier card, find another card with a good gas bonus like the Amex Everday Preferred with 2x bonus on gas purchases.

Using cards like these isn't the end all be all though, my normal gas purchases are actually made on my Sapphire Reserve card.... why would I give up the points? There is always a consideration to be made with all things. If using a different card saves me money, is it worth it to pay more to gain extra points.

This is a hard question to answer, as an example my gas purchases work well. I have a Costco membership, this consistently saves me 13 cents per gallon on any gas purchase... but Costco only takes Visa cards. Citi uses Mastercard for the most part, so the dilemma is, do i save the 13 cents per gallon and lose the points, or pay more and gain more points. It's not an easy question to answer, but in many cases the saving of money should always take precedence. There are ways to figure the value of points, but they are subjective and up to you to use. Some websites can provide you their view on the actual value of points if you want to run the numbers. in this case I ran the numbers and the money savings is far more than the value of the points gained... so I purchase on a non-ideal card to save money.

Lunch Date

Next on my to do list was to go out to lunch with my fiance. We meet at a favorite restaurant for lunch and have something to eat. Now it's time to pay, what card to use? Well once again, we look for a bonus category. Right now I use the Sapphire Reserve card for this purchase, the newly released Sapphire Reserve card has 3x points on all dining purchases. Pulling out this card will triple the amount of points you earn per dollar versus another non-bonus card. Don't want to pay for an expensive card like the Sapphire Reserve, then there are other cards with lower bonuses for restaurants that will still give you a bump in points for this purchase.


After lunch I go grab groceries at my local supermarket. Once everything is in the cart and I head to checkout, it's once again time to choose the correct card. In this case I reach for the Amex Everyday Preferred card because it has a fantastic bonus on groceries, 3x points normally. It does limit you to a maximum of $6000 on groceries a year, then the bonus drops back to 1x point. However, the Amex card has a trick up it's sleeve. if you make 30 purchases a month on this card, you get an additional 1.5x bonus to all points earned. If you hit that 30 purchases, your grocery points jump to 4.5 points per dollar spent. This gem of a card has been the single best earning card for me bar none.

Trip Planning

Trip planning tends to be a little more complicated. Many of these cards offer travel bonuses, and knowing which one to use in which case can get really convoluted, but if you stick with it, it will pay off in spades. 

Starting with airfare, this can be straight forward, there are many cards that provide 3x points on travel, pick any of them for flights, whichever you want to send your points to. Do keep in mind that many cards also give a once a year refund of $200-$300 on flights, so make sure to use those up and not let free money go to waste.

Next is the hotel... yep this gets a bit more complicated. If I'm staying for 3 days or less, it's back to the same situation as the flight, choose any card that gives 3x bonus for travel. If I stay 4 nights or more, then I use the Citi Prestige card since it refunds me the 4th night. If you're staying 8 nights, you can grab the Citi Prestige 4th night free twice, but they have to be 2 different stays, so you'll have to book 2 different stays, usually at different hotels. In my opinion getting 2 nights free is well worth a hotel switch in the middle.

Last is a car rental, this is straight forward, use the Sapphire Reserve card or if you don't have it use the Sapphire Preferred card. I use these cards no matter what the bonus category and that is for one simple reason, the card has primary car insurance. Other cards act as car insurance but only after your normal car insurance is used, which means you may get rate bumps on your regular car insurance if they find you at fault in any way. Using the Sapphire family cards means that you never report your accident to your normal car insurance, so they never have the chance to bump your rates. The Chase card is your primary car insurance for the rental car.

Cat Litter

Grabbing some cat litter is my last stop. no there is no bonus category for cat litter. I threw this one in here to act as an everyday purchase. Most of your daily purchasing is going to be a non-bonus category purchase. Walgreens to Target, most of these stores aren't covered by a bonus category, so you need a good everyday spender. In my case that is once again the Amex Everyday Preferred. The reason for this is that once you hit the 30 purchases a month, you get that bonus of 1.5x bonus on all your points. Most cards only offer 1x points for everday purchases, this card once you reach that 30 purchase threashold gives you 1.5x points on these purchases, not to mention boosting your grocery and gas purchases as well. Like I said before, this card brings in more points for me on a monthly basis than any other card... by a long shot. I've already doubled the sign up bonus of this card in a few months. This is my go to card, get it, love it, use it!

So that's the basics. There is of course a whole host of things that require your to adapt and adjust, but these basics will help you chose how to purchase and when.