Cashback at Mid-Year: The Report Card

by Robert McGarvey

It was about six months ago – in the midst of galloping inflation – that I decided to shift my credit card strategy from accrual of mileage and points that could be converted into miles (e.g., Amex’s Membership Rewards) into a focus on cashback, cold, hard cash. The reason: soaring, dynamic prices for rewards tickets have increasingly made that game unenticing.

And there’s an undeniable value to the cash that is on offer with cashback cards.

How has that strategy fared for me?

Consider this a mid-term report card.

The Amex Plat card for me mainly is a tool for accruing Membership Rewards points but this year already I have gotten $100 in cashback on a NYTimes subscription ($20 per month) plus $90 in Uber cash. Just this month I also got $40 back on a Zoom subscription, $50 on a Saks purchase, and $30 on a Wine.com purchase. Plus my wife gets a free Clear membership ($189 value, which covers the $175 that card costs).

All in I am up $310 so far this year.

With Amex Blue Preferred, a recently acquired cashback card, I am up $169.96 in cashback since January 1, roughly the incept date for the card. Almost all of that is in regard to grocery spending (at 6% cashback). Add in $250 for hitting a $3000 spending goal in the first six months.

The Affinity Cash Rewards card – which returns 5% on Amazon purchases and 2% on groceries, gas, and restaurants – has put $303 in my pocket since incept in late winter. $200 of that was a bonus for spending $3000 in the first 90 days. This card is fee free.

Discover has put $76 in my pocket, almost entirely produced by 5% back on groceries in Q1.

A fee free Chase Amazon card – 5% back on Amazon and Whole Foods purchases – put $187 in my hands in the first half of the year. For now I am using this card only at Whole Foods.

A Chase Southwest Air card put 50,000 miles in my account for spending $1000+ in the first month. I have no plans to use this card except for an occasional Southwest flight.

That’s $986 plus the $310 from Plat, which puts me up about $1296 in the first 6 months.

The important fact: although I had fretted that playing the cashback game would take up too much time, in reality I spend very little time or energy attempting to maximize my benefits. Let’s be honest: I am not earning enough cashback to justify a lot of effort on my part. So what I have devised is a no brainer, no thought approach that aims to produce cashback without worrying about maximizing the rewards.

Most days I carry only four credit cards with me and just about every purchase I make goes on one of the four.

But I don’t lose sight of the reality that this cashback emphasis simply is not going to make much difference to my personal finances. That’s why I have no plans to add more cashback cards to my weaponry. Probably I could eke out a few more dollars in cashback rewards by adding a few more cards but there are limits to my wallet capacity and my willingness to use brainpower to seek to put the right card in play at the right time.

So I’ll probably pull out around $2000 in cashback this year and if I succeed in continuing to put in minimal effort it will be a good return.

What about travel rewards? In the past year I added something over 100,000 to my Membership Rewards account, a mix of purchases and bonuses. I have diluted my focus on this but, obviously, old habits die hard. Besides, quite a few vendors are on auto pay with Plat and I have not wanted to put in the energy to rearrange those relationships.

The small spend I am diverting to cashback wouldn’t make much difference to my travel rewards availability. What would is if I added another credit card with a rich signing bonus that will produce a couple flights to Europe. Maybe I will. Right now I feel no urgency – prices in much of Europe have gone bonkers and I will bide my time until the current travel mania abates. But the really big gets will be had with signing bonusses, not with grinding out a couple pennies here and there with cash rewards or accumulating handfuls of Membership Rewards points with Amex Plat spends.

Call this my hybrid strategy and I plan to continue to keep it simple.