Credit Card Strategy: Rewards Without Debt

Three rules: pay in full, automate, track categories.

The Three-Card Strategy

Card 1: Daily Driver

• 2% cashback on everything, or
• High cashback on your biggest spending category
• Examples: Tangerine Money-Back, CIBC Dividend Visa Infinite

Card 2: Category Bonus

• Rotating categories or specific bonuses
• Gas, groceries, restaurants
• Examples: Scotiabank Momentum Visa Infinite, TD Cash Back

Card 3: Travel/Premium (Optional)

• For when you want perks and status
• Only if you spend enough to justify annual fees
• Examples: Aeroplan, World Elite cards

The Rules That Keep You Safe

Rule 1: Pay in Full, Always

• Set up autopay for the full balance
• Interest rates are 20%+, rewards are 1-2%
• The math never works if you carry a balance

Rule 2: Automate Everything

• Autopay prevents missed payments
• Missed payments hurt your credit score
• Late fees are usually $25-40

Rule 3: Track Your Categories

• Use the right card for each purchase
• 2% on gas beats 1% on gas
• Apps like Mint or YNAB help track spending

Common Mistakes to Avoid

• Annual fee cards before you spend enough to justify them
• Store credit cards with terrible rates and limited use
• Cash advances with immediate interest and fees
• Minimum payments that create debt spirals

Building Credit Score

Your credit score depends on:

• Payment history (35%): Pay on time, every time
• Credit utilization (30%): Keep balances under 30% of limits
• Credit age (15%): Keep old cards open
• Credit mix (10%): Different types of credit help
• New credit (10%): Don't apply for too many cards at once

Credit cards are powerful financial tools when used correctly. Treat them like debit cards that happen to offer rewards and fraud protection.

The goal is to earn rewards on spending you'd do anyway, not to spend more because you have credit available.