Monday, June 15, 2015

Extra Credit

So after I mentioned that I have a credit card strategy in this post, I got a few requests for a post all about my strategy. At my last job, my main client was the credit card branch of a bank, so I learned the ins and outs of their cards as well as competitor cards, and brushed up on the trends and info in the industry, all of which helped me get to where I am today with my cards.

But first, a few words of warning:

1. These choices were very specific to my financial situation and goals, as well as my spending habits. Not recommending this approach for anyone in particular.
2. Learn about your credit score. Lots of things are tied to it (more than just credit cards--forgetting to return a cable box can follow you for years!), but your credit card activity has a huge bearing on it long-term.
3. Know thyself. You know your spending habits and goals best. And be honest with yourself. Credit cards are a one-way ticket to trouble for some people.

My cards:

1. Bank of America MasterCard: this card has had a few different names (initially it was tied to my alma mater and donated money to them annually) but it's my first and oldest card. It's now a cash back card, and one that I will never cancel. Part of your credit history is having just that--a history. So the fact that my credit history starts with this card (followed by years of paying it on time every month) means that if I ever cancel it, I'll lose those years of history. Sorry, MasterCard, you're stuck with me, your most boring customer ever. I only charge gas, groceries, cable, and my gym membership on this card #party

2. American Express Blue Card: at my first job, we had corporate American Express cards, and I racked up a lot of Membership Reward points on that card. However, using them was tricky since whatever I used the points for would show up as a charge first on my corporate card, and personal charges were frowned upon on the corporate card. So I got this American Express-lite card--no fee, and I was able to use Membership Rewards points on trips, stuff from Amazon, etc. This is also the second-oldest card I have, and handy for buying advance concert tickets and shopping at Costco.

3. US Airways MasterCard and American Airlines MasterCard: Ahhh, the beginning of the cards I got just for miles. Most of you know that AA and USAirways are merging this year. Meaning their mileage programs are merging too. However, last year, they still offered separate credit cards, with sign-up bonuses of 40,000-50,000 miles for their respective programs. When the two mileage programs merged in April, I had over 100,000 American Airlines miles, thanks largely to the sign-up bonuses from the two cards. The US Airways card has now gone away, so the window for this is over. But it was worth it--I got my flight for my birthday trip to Europe for FREE.

Also, likely cancelling both of these cards this fall--I don't fly American as much anymore now that Southwest has upped their flights to and from my commonly-visited cities. These were purely mileage-grabs.

4. Southwest Airlines Rapid Rewards Visa: Another card I got for the mileage grab (50,000 miles sign-up bonus). I will continue to keep this card though, because I fly Southwest VERY often, and you get 6,000 extra miles on your "cardmember anniversary". Softens the blow of the $89 annual fee.



5. Chase Sapphire: I've really saved the best for last. This is my go-to card. The sign-up bonus was 50,000 points which can be transferred 1-to-1 to a variety of frequent flier and hotel programs. So I really have 50,000 miles to use on a variety of airlines, not just one like the above airline cards. I also get 2 points for all $$ spent on travel (including Uber and parking) and restaurants (in case you're wondering why I keep offering to pick up the tab and have you PayPal me . . . .). The card has great travel benefits too (lost luggage reimbursements, rental car liability insurance, etc.) and no foreign transaction fee, which has been great in booking things for said upcoming trip.

As you can see, my credit card strategy is focused around one of my favorite things: travel. I feel like I'm cheating the system when I get free flights--these benefits are truly worth it for me (and worth the annual fee I pay for some of these cards).

I know you may be thinking--"OMG, her credit score must be TERRIBLE". And the answer is no, it's not. I spaced out my applications, never carry a balance, and stay within my budget when using these things. And currently only three of these cards even have charges on them (thanks a lot, Costco).

I'm no expert on this, and highly recommend following along with these bloggers if you want to get a true expert's opinion on the credit card points game (note: these all have a travel-focus)

The Points Guy
Mommy Points
Million Mile Secrets


So there you have it! So far this year, I've taken four free flights and have four more planned. Happy and smart spending!

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