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Arguments For And Against Carrying Multiple Reward Credit Cards

Published 4/21/08 (Modified 12/19/13)
By MoneyBlueBook

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I had lunch with my brother at an Asian noodle place a few days ago and the subject of money came up. Somehow our conversation turned to credit cards, which prompted me to pull out my wallet and enthusiastically display my collection of multiple reward credit cards that I use to make virtually all of my day-to-day purchases. I carry multiple cards for different purchase functions such as having a dedicated gas credit card, grocery credit card, dining out credit card, and an all purpose credit card not covered by other reward programs. My card strategy has always been to maximize my use of credit cards to get the most out of reward points and cash back offers. Not including the ones I regularly carry around, I also have a few other balance transfer cards sitting at home, having already tapped out their 0% APR offers with no other remaining reward deals to offer me as a card consumer.

I See Reward Credit Cards As The Way To Earn Lots Of Arbitrage Cash Back and Free Gift Rewards From Everyday Purchases

What can I say - I'm a big proponent of using credit cards and rarely resort to using cash, which I see as an old school payment system that will someday be phased out in favor of more efficient and sanitary card payment methods. Since I started maximizing my use of credit by carrying around multiple reward cards, I've been consistently earning more than $1,000 in purchase rewards and cash rebates every year - and I'm not even married. Imagine if I had a family and children to shop for - imagine the sheer amount of credit card rewards I could earn from the inevitable higher spending rate.

For those who don't want to rely on credit-based payment systems and deal with the risks and spending hazards involved, there's always debit cards, which offer the same speedy and compact access to money that credit cards offer but without the potential out of control credit card debt issues. However, the biggest downside with debit cards is obviously the lack of purchase reward offers. Unlike credit cards, which tend to entice consumers with attractive cash back and rebate incentives such as airline miles or gift cards, debit cards don't usually offer rewards (although some do). A few banks and debit card issuers like Citibank do offer purchase reward incentives for customers who opt to use their ATM/debit cards to make purchases. These debit card purchase incentives are usually in the form of some type of reward points that can be accrued and redeemed for gift rewards and merchandise. In the case of Citibank, the company offers Thank You reward network points for every purchase made using their ATM/debit cards. However these debit reward points pale in comparison to the lucrative reward promotions offered by credit card issuers. Of course, in terms of money making ability, credit cards offer card issuers a much higher profit potential in the form of interest and penalties gleaned from those unable to make their monthly credit payments. That's why they are able to offer much higher reward percentages for credit users.

While They Offer The Most Efficient Use Of Your Money, Reward Credit Cards Are Powerful Financial Tools That Admittedly Must Be Used Carefully and Responsibly To Avoid Overspending

Despite my seemingly zestful support of credit cards and belief that their use can be a part of a complete and well rounded financial planning strategy, I don't necessarily recommend them to everyone. Like the powerful engines that drive today's automobiles, credit cards can be a useful tool for convenience and efficiency. But like the car you drive, a credit card can also be a tool for disaster. The unsafe and irresponsible use of credit cards can lead to major financial mistakes and rampant credit card debt. With any such powerful tool, in the hands of an uninformed and inexperienced user, both cars and credit cards can cause much heart ache. Having a credit card does not mean you have the license to spend and not reap the ultimate billing consequences. Likewise, having a license to drive does not mean you have the right to drive without regard for the safety of those around you. If you simply cannot handle the responsibility and awareness they require, it's best to resort to more primitive and basic modalities. For the car, the undeveloped and immature driver should resort to biking or traveling on foot instead. For the overwhelmed and financially uncertain credit card consumer, he or she should probably stick to cash and debit before adopting an all credit strategy. Being able to successfully juggle and handle multiple credit card statements and payments can be a daunting task, and while the practice may certainly yield very impressive rebate results, it's not for everyone.

So Who's Smarter? My Brother Who Uses A Single Non Reward Credit Card - Or Yours Truly, Who Uses Multiple Reward Credit Cards To Capture the Maximum Possible Amount Of Credit Card Cash Rebates, Airlines Miles, and Gift Cards

It took a while for me to develop the ability to manage the use of multiple reward credit cards and to develop the responsible approach of always paying them off timely every month - something I'm quite proud of. That's why I'm always a bit puzzled when I talk to someone like my brother who accepts the practice of using credit cards to pay for everything, but doesn't receive a single purchase reward incentive for using it. During our lunch together, my brother responded to my wallet collection of credit cards by pulling out his credit card collection - a single Citibank credit card - the Citi Platinum Card. While this particular card offers the benefit of a 0% balance transfer period, once the introductory promotion runs its course, it doesn't offer any further rewards for card purchases. Every single dollar spent with this non-reward credit card offers no reward rebate in return. The only thing you get is a 20-30 day grace period for payment and the usual credit card guarantee shield against unauthorized and fraudulent purchases.

My brother's explanation for not carrying more than one credit card is that he's fine and happy with just having one. The lack of any card rewards doesn't seem to faze him and my so-called dazzling display of credit card rewards didn't seem to encourage him to carry more than one card. In his view, having one card is enough for him. He sees credit cards as more of an efficient method of payment with useful purchase protections, than as a juicy arbitrage source of  money and credit card rewards. His reliance on a single non-reward credit card has always been a compromise to capture the convenience of debit cards but still enjoy the excellent purchase reward protections offered by most credit card issuers. Apparently, he views the lack of non rewards as almost a plus of sorts since it doesn't encourage any unnecessary or gratuitous spending habits that might afflict users of reward credit cards. Between my brother and I, he's probably the more frugal and thrifty spender, which now makes me wonder if that has something to do with the fact he owns and carries around only a single non-reward credit card. Although I would rather think otherwise, but have I become a more liberal and uninhibited credit card spender as a result of my long history of subconsciously justifying my credit card purchases by rationalizing that I am getting part of my money back in the form of credit card rewards?

I still tend to think I'm on the right track - that the smart and strategic use of multiple reward credit cards should be an integral part of one's financial planning, but I'm always open to better view points. So who's right - my brother or I?

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11 Responses to “Arguments For And Against Carrying Multiple Reward Credit Cards” 

  1. GL says:

    Finally, a PF blogger who dares to post in defense of credit cards. It's only a matter of time (mere minutes, most likely) before the Anti-Credit Crusaders show up and start yelling that all credit is evil. *sigh*

    I think that there are 3 types of credit card users: There are smart consumers like you and , who pay their bills in full and try to maximize the rewards. Then there are people like your brother, who pay off on time but don't care about the rewards - or don't have the drive to hunt for the best deal. And then there are those who get tempted by the availability of their credit. They buy more than they can pay for (my fellow college students are notorious for doing that...) and end up in debt. Some of them go online and become Anti-Credit Crusaders. :^D

  2. Raymond says:


    I think we are both avid credit card users probably because neither of us has been significantly slammed with credit card debt. Of course that's likely due to our consistent history of paying them off on time.

    As with any powerful tool, if you use it wisely and smartly, it can serve you quite well!

    With people like my brother, there's no point convincing them to bargain hunt or to seek out arbitrage credit rewards. They simply see things through a more cautious perspective when it comes to finances and money.

  3. Elizabeth says:

    Raymond, I with you! I, too, carry a collection of credit cards, use specific cards for specific types of purchases, and maximize my reward points. At least 95% of my monthly purchases are made on one card or another. And we ALWAYS pay off the balances every month.

    For groceries, I carry a Kroger 1-2-3 Rewards card. It combines my Kroger frequent shopper discount with cash and coupon rewards. I particularly appreciate the fact that the coupons generated are targeted toward my spending habits so they're useful to me whereas the vast majority of manufacturer's coupons in the paper and such are for cr*p I don't buy.

    For gas and Costco shopping, I use a Amex Blue Cash card.

    And for every day household expenses I use my new Capital One Cash Rewards card.

    I do carry two additional cards but they're just spares for the times when my monthly spending is particularly large -- helps spread the due dates out a bit. Those cards don't offer any reward benefits though so I don't use them often.

    Kudos to you for helping carry the "credit cards aren't evil" torch -- a rarity among PF bloggers.

  4. Raymond says:

    Hey Elizabeth,

    Well, I wouldn't refer to it as a "credit cards aren't evil" torch...more of a flash light perphaps. :)

    I totally get why some people are opposed to credit cards as they view them as the source of all evil, but what I just don't quite get is why some of the avid credit card users refuse to carry multiple reward cards to maximize their cash back and card rewards.

  5. Elizabeth says:

    Yeah, they puzzle me more than the "no credit" people as well. Although I'm not among them, I do know people who just can't control their spending if they have a credit card. And I respect people who know that about themselves. I agree that there doesn't seem to be much logic to the type of person you describe -- using a credit card but not maximizing their usage by having a rewards card. Maybe it's a "don't bother me with the details" kind of personality?

  6. Raymond says:

    I asked my brother about this again and his glib reply was "I just don't need them" - referencing the credit card cash back rewards....different strokes for different folks I guess

  7. Elizabeth says:

    My husband and I are both at points in our lives that we neither need nor have the interest in chasing every single penny. Still, it's hard to imagine anyone turning down such easy and potentially generous quantities of cash. Let's just look at some conservative numbers. We'll disregard my grocery and Amex cards and look only at my household expenses on my new Capital One card. As I said, I'm being conservative here so we'll assume I charge $1,000 per month. At 1% cash reward on every single purchase I make on the card, that's $120 per year. For doing nothing extra -- just using one card over another.

    Different strokes is right but this one baffles me. I'm usually fairly good at putting myself in other people's shoes but in this case I just don't get it.

  8. E.C. says:

    I don't think that there's really a single right answer. I have one credit card, a USAA Cash Rewards Mastercard that I pay in full each month. I might use multiple cards to maximize rewards at some point in the future, but I'm a college student with much lower expenses than the average adult and it doesn't seem like I can charge enough for variation in reward rates to make a big difference. There are a lot of other things that I can focus on that have far more impact on my financial picture.

  9. Trend Following says:

    I only have one and always pay it in full at the end of the month. The problem with those cards, especially those offered by Sears and other department store is that they have a very high interest rate if one don't pay them in full at the end of the month.

  10. Sam H. says:

    Thanks for the post. I would love to see a post where you explain in detail how you keep track of the charges and pay each card off each month.

    I'm looking into rewards credit cards but I'm worried that if I miss one payment or pay late, I get will get screwed over.

  11. ideal4investors says:

    I like the American Express card because I get cash back from my Costco purchases. Thanks for the post, I will re-examine the rest of my cards!

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