LifeHacker has just posted a list of the “Five Best Rewards Credit Cards” according to their readers. As an aficionado of rewards cards, I figured it might be a good time to update everyone on my present system, by which I’m attempting to make the most I possibly can by combining the benefits of several cards. (My previous post on rewards credit cards can be found here.) I highly recommend rewards cards to anyone who does not carry a balance on their credit cards each month and is capable of treating a credit card like a debit card. None of the cards I carry charge a fee, and I prefer cash-back cards to other rewards programs. I carry the following cards:

PenFed Platinum

This card pays 5% cash back on all pay-at-the-pump fuel purchases and 2% back on grocery purchases. I use it year-round for gas purchases, and it serves as the grocery card whenever the Chase and Discover cards aren’t offering 5% back in that category. As such, this is probably the most valuable card I carry at this point.

Chase Freedom

This was my go-to card for most things for quite a while (when it was 3% back on the top three categories each month), but they recently changed their rewards plan to one that is slightly less rewarding for my purposes, so some of that spending has gone elsewhere. This card gives 5% cash back on up to $1500 in spending on categories that rotate on a quarterly basis and 1% back on everything else.

Discover More

When Discover crippled their Open Road card, I switched to the Discover More card, which also offers 5% cash back on rotating categories, though the cap is lower (usually $800). Discover’s excellent partner deals mean that this cash can often be redeemed for gift cards that give a better rate than just getting cash back. The Discover categories and the Chase categories are often different for a given month, so I’ll use the one that offers the biggest reward at the time (more on this below).

Citi Forward

The Citi Forward card offers 5x “ThankYou points” on restaurants, entertainment, bookstores (including Amazon.com). Unfortunately, ThankYou points don’t quite convert to a point per cent, so the returns are a bit less than 5% (usually closer to 3.5%), but this is still worth carrying as a backup for when the other cards aren’t offering extra rewards in these areas.

My System

Since the Chase Freedom and Discover More cards have rotating bonus categories, my system centers on which card offers the most at a given time of year. I also make sure I get ten swipes per month on my debit card (usually small transactions) to trigger the 4% APY interest on my checking account (through a great deal offered by Crescent State Bank). This system ensures that I get no worse than 2% cash back on groceries at any time, 5% on gas, and should come out getting just under 3% cash back per purchase as an average—in addition to making 4% on my checking account balance. This year, my system works out like this:

Year-Round:

Fuel: PenFed Platinum (5%)
10 small transactions per month = 4% APY on checking

January–March

Groceries (through February) = Chase Freedom (5%)
Restaurants =  Discover More (5%)
Travel (Hotels, Airlines, etc.) = Discover More (5%)
Bookstores, Entertainment, Online = Citi Forward (5x points)
Other purchases typically on Discover or Chase Freedom (1%)

March

Groceries = Discover More (5%)

April–June

Home Improvement = Discover More or Chase Freedom (5%)
Department Stores = Discover More (5%)
Clothing Stores = Discover More (5%)
Groceries = PenFed Platinum (2%)
Restaurants = Citi Forward (5x points)
Bookstores, Entertainment = Citi Forward (5x points)

July–September

Hotels, Movies, Theme Parks = Discover More (5%)
Airlines = Chase Freedom (5%)
Groceries = PenFed Platinum (2%)

October–December

Restaurants = Chase Freedom (5%)
Department Stores = Chase Freedom (5%)
Movies = Chase Freedom (5%)
Groceries = PenFed Platinum (2%)
Bookstores = Citi Forward (5x points)
(Discover has not announced their categories for this quarter yet.)

It’s a little more complicated than just having one card to swipe everywhere, but I think the extra payoff is worth it.