How to get 5% back on everything

Different credit cards will give 1-10% back on various purchasing categories. Obviously the higher return is better, but the trade-off is more work. At the very least, here are some strategies you don't have to research yourself to earn the most amount of points - if you're not chasing after sign-up bonuses. 

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Pros

• These cards can be used anywhere you normally use credit cards (e.g., groceries, restaurants, online bills, etc.)

• It's a simple way to get 5% back on all your purchases without figuring out which card to use

• Most credit card processors charge a 2-3% fee when using a card - so this still allows you to profit. For example, I paid my property tax which had  a 2.35% interchange fee doing increments of $200 - profiting me 2.65% back!

Caveats

There are a lot, so please be aware of all of them

• Gift cards are more easily hacked - so make sure your cards aren't tampered with and you keep track of them (or just spend them as quickly as possible). There is a claim process but obviously we'd rather not get to that point. 

• Only go to the website on the physical card to register the card or check the balance - there are a lot of lookalike scam sites that will steal your information 

• Sometimes you need to register the card under your own name in order to use it on some sites - so this may be an annoying extra step 

• Not all stores will drain down your account - meaning if you are making a $50 charge, but you only have $45 left on a gift card, your payment might be rejected. Typically grocery stores will drain down to $0 or you could reload the exact amount to your Amazon balance. 

• Obviously with multiple physically gift cards it can be hard to keep track of them all - I usually just keep two in my wallet with sharpie labels - one for small transactions and another for large ones. I then drain down when I go grocery shopping. 

• Finally, it can be hard to scale if you're spending a lot of money - thinking small business owners - as $200 increments can be very tedious. 

2) The Credit Card Mix

No card gives 5% back by itself, but you can pull several credit cards for different categories to try to achieve this. 

Method

Get a set up of cards that earn 5% back

• Chase Ink Cash - 5% back on office supply stores, internet, cable, and phone services 

• Citi Custom Cash - 5% back on your top category each billing cycle up to $500. Bonus - you can get multiple Citi Custom Cash cards through product changes

  • Restaurants, Gas Stations, Grocery Stores, Select Travel, Select Transit, Select Streaming Services, Drugstores, Home Improvement Stores, Fitness Clubs, Live Entertainment

• Rotating category cards - 5% back on rotating categories each quarter (e.g., Chase Freedom, Chase Freedom Flex, Discover It Cash Back, Citi Dividend)

  • Grocery stores, Gas,  Fitness, Retailers (e.g., Amazon, Paypal), and more

• PenFed Platinum Rewards Visa Signature OR AAA Travel Advantage Visa Signature - 5% back on gas

• AAA Daily Advantage - 5% back on groceries 

• American Express Platinum - 5% back on flights 

• US Bank Shopper - 6% back on your top two retailer stores

• US Bank Cash+ - 5% back on two selected categories (up to $2,000/quarter) 

  • Fast Food, Home Utilities, TV, Internet, and Streaming, Department Stores, Cell Phone, Electronic Stores

• Retailer Cards - Amazon, Target, etc. - store cards that give you 5% back at their store. 

• Wells Fargo Autograph Journey - 5% back on hotels

*Note, there are probably niche cards out there that may also hit other niche categories 

Pros

• Solid cash back at most of your common categories

• Most of these cards are very easy to obtain and you can get multiples to stack 

Caveats

• Most of these cards have some sort of time-bound limit

• You'll have to carry a lot of cards in your wallet (or virtual wallet) and make sure to remember which ones to use where 

• Points are spread across different ecosystems - so you'll have to remember to redeem them all and earn enough to get past any minimum redemption requirements. 

3) Bank of America Preferred Rewards Tiers

Bank of America has different rewards tiers that grant 25% - 75% bonuses on you credit card rewards so you could actually earn up to 5.25% back on many categories. 

Method

• Have at least $100K with Bank of America over a 3-month average in your checking accounts and investment accounts to get Platinum Honors 

• Get multiple Bank of America Customized Cash cards 

  • 3% back (with 75% boost is 5.25%) on a category of your choosing per quarter

  • Gas, Online Shopping/Cable/Streaming/Internet/Phone, Dining, Travel, Drug Stores, or Home Improvement Stores

Fun note - right now the offers on the Customized Cash is 6% back in the category of your choice in the first year ($2,500/quarter limit) so you don't even need to have a rewards tier 

4) Fintech Cards

Okay, I know 3% or 4% isn't 5%, but I'm sharing this strategy from a simplicity standpoint - if you manage to get these cards and fulfill their requirements, it becomes a potentially lucrative one-card set up to get solid cash back on all purchases. 

Current Options

• US Bank Smartly - 4% back on up to $10,000 purchases each billing cycle ($120,000 per year) 

  • Requirements: $100,000 or more in a US Bank Checking Account - and have a Savings Account

  • Verdict: The 4% back on everything probably isn't worth losing out on the terrible interest rate in a US Bank checking account. Maybe if you could max it out it might be worthwhile. 

• Robinhood Gold - 3% back on everything

  • Requirements: Subscribe to Robinhood Gold ($50/year) and get past the waitlist 

  • Verdict: Can be worth it if you want a one-card set-up and not worry about optimizing between cards. Cash back can be invested immediatly so that's helpful. 

• Coinbase/Gemni/Crypto.com credit cards - 3%-4% back in bitcoin

  • Requirements: Waitlists, but otherwise should be easy to get

  • Verdict: Definitely an interesting play if you have faith in crypto and its growth.