My Credit Card Strategy: Stretch the Budget With Cash Back

"I realized that with just a little extra effort I could be saving hundreds of dollars more a year. With two growing children straining my budget, that extra cash would come in handy."
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Written by Kimberly Palmer
Senior Writer/Spokesperson
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Edited by Kenley Young
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Before I joined NerdWallet, I viewed credit card rewards skeptically. I didn’t think it was worth investing too much effort in managing multiple cards or strategically selecting which card to use for which purchase.

I liked keeping my financial life simple, and for a long time that meant using a basic, 1% cash-back card — the one that came automatically with my bank account.

Then NerdWallet opened my eyes to all that I was missing. Being surrounded by people who love researching credit cards and applying for new ones to get sign-up bonuses made me realize that with just a little extra effort I could be saving hundreds of dollars more a year. With two growing children straining my budget, that extra cash would come in handy.

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Cash back for food

My first step was to take a close look at our monthly budget and figure out which card would give us the highest cash-back rate based on our spending categories. Since we spend so much on groceries, the Blue Cash Preferred® Card from American Express stood out: We could earn 6% cash back on up to $6,000 per year on our purchases at U.S. supermarkets, as well as 3% cash back at U.S. gas stations (and 1% cash back on all other purchases). Terms apply (see rates and fees).

While those rewards came with an annual fee, a quick calculation showed that we would come out ahead. If we maxed out at the $6,000 limit, which we easily spend in a year on food, we would earn $360 in cash back for our grocery spending and likely another $90 on gas, given we spend about $250 a month on gas for our two cars.

After subtracting the annual fee, that would give us at least $355 extra a year. The Blue Cash Preferred® Card from American Express also includes a welcome offer to further offset the cost. That made the card even more appealing.

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Defraying the cost of purchases

My next step was to get the Prime Visa, from Amazon. Like many busy families, we rely on Amazon for almost all of our household purchases: A week doesn’t go by without several Amazon boxes landing on our doorstep.

Not only does the Prime Visa give us 5% back on all of those purchases, but also 5% back at Whole Foods; 2% back at restaurants, gas stations and drugstores; and 1% back on all other purchases. (Note: As of May 2023, the card no longer offers elevated rewards on drugstore purchases). While the card itself charges no annual fee, you must be an Amazon Prime member to get it, and a membership costs $139 a year.

Based on my estimates, we spend:

  • About $600 a month at Amazon (including snack food, clothing, sports equipment, household supplies, birthday presents and school supplies).

  • $150 a month at Whole Foods.

  • $300 a month at restaurants.

I calculated that using this card would give us an extra $43 or so in cash back a month, or more than $500 a year.

Adapting to our new habit

With both of these cards, I added my husband as an authorized user, so he can also rack up rewards with his everyday purchases. That has made it slightly harder for him to review his purchases and check for errors each month, since I’m the one who pays the bill, but we decided that hassle is worth the benefit of the added rewards.

I still keep my old 1% cash-back card in my wallet as a backup, but I try to make most of my purchases using either the Blue Cash Preferred® Card from American Express or the Prime Visa.

When we first implemented our new credit cards rewards strategy, it was a little confusing: My husband kept asking me which credit card to use where; he never had so many choices before. But he soon began associating the Blue Cash Preferred® Card from American Express with the gas pump and regular grocery store, and the Prime Visa with restaurants and Whole Foods. (I loaded that card into both of our Amazon accounts so it is used automatically.)

One unexpected benefit to our new system is that it has made us more disciplined spenders. Since our spending is primarily broken out on two different cards based on category, it’s easier for me to eyeball the statements and notice any aberrations or overspending each month. At first, I was shocked at how much we spent at Amazon, and we have been able to cut back on a few unnecessary items, like certain overpriced foodstuffs. (I’m looking at you, individually packaged seaweed snacks.)

Bumps along the way and goals

My new credit card rewards habit did not always go smoothly. Early on, before I was used to juggling my different credit card due dates, I accidentally forgot to make a payment and was immediately hit with a late fee.

Fortunately, when I emailed the card issuer to explain that I had simply forgotten, the charge was reversed. Then I set up automatic payments so the balances are always paid in full each month before their due date. That’s one less task to worry about.

I have to admit I am still not a perfect credit card maximizer. I hesitate to apply for a new card with an appealing sign-up bonus out of fear of complicating my finances further, and I know I could do much more to maximize my travel rewards, which is a goal for my husband and me as our children get older and easier to travel with. I have my eye on the Chase Sapphire Preferred® Card and a trip to Europe sometime in the next few years.

For now, I am grateful that I got over my fear of credit card rewards so that my family has an extra $1,000-plus this year — that’s money we can put toward savings, household expenses or a fun family vacation. When you’re trying to stretch a family budget, a little bit of cash back can go a long way.

To view rates and fees of the Blue Cash Preferred® Card from American Express, see this page.
Cash Back Cards from Our Partners
Wells Fargo Active Cash Card

on Wells Fargo's website

Wells Fargo Active Cash® Card
NerdWallet Rating
Rewards rate


Earn unlimited 2% cash rewards on purchases


Intro offer


Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.

Chase Freedom Unlimited Credit Card

on Chase's website

Chase Freedom Unlimited®
NerdWallet Rating
Rewards rate


Enjoy 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.


Intro offer

Up to $300

Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!

Capital One® SavorOneSM Cash Rewards Credit Card

on Capital One's website

Capital One SavorOne Cash Rewards Credit Card
NerdWallet Rating
Rewards rate


Earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores (excluding superstores like Walmart® and Target®), plus 1% on all other purchases. Earn 8% cash back on Capital One Entertainment purchases. Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Earn 10% cash back on purchases made through Uber & Uber Eats, plus complimentary Uber One membership statement credits through 11/14/2024. Terms apply.


Intro offer


Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening.

See more Cash Back cards

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