Before I get into this, please take do take this with a grain of salt because it is my personal experience and may or may not be replicable.
I was someone who never really bothered with credit cards until I started reading about ways to maximize one’s returns on spends. Even after that, I never was bothered with learning how to travel for less money until I realized I’m really missing out on a lot such as free airplane tickets, hotel stays, lounge access at the airport and all that good stuff.
I started reading more on the best travel cards and soon realized I could significantly more value without having to break the bank. Hence I started my wild and crazy spree of collecting rewards credit cards two of which are the only annual fee cards – but they offer me value no “free” to keep card can.
Not everything can be assigned a number and experiences are one of those things. However not having to spend additionally out of pocket does have a theoretical number behind it (savings). Hence, I started looking at ways to maximize the value I got from doing things I normally did/going to spend on such as rentals or flights or hotel stays with the family on vacations.
If I can get things worth $500 or more in a year by spending $150 today, I will take that offer up without a moment’s notice because I am getting value of it – not to mention other’s with me can benefit too.
It all starts with collecting rewards credit cards with the mindset of getting ones with realizable minimum spends for the sign-up bonus when you know you have planned purchases coming up.
Once I personally realized the benefits of the Chase Trifecta, I immediately set to work collecting the Chase Freedom, Freedom Unlimited and Sapphire Reserve card.
Next was the American Express portfolio I wished to build up because I was above Chase 5/24. Hence I proceeded getting the American Express Gold charge card and the AMEX Blue Business Plus credit card to have a nice two card system.
My portfolio of cards was complete. I had a rewards earning card both from Chase and AMEX and with the number of transfer partners between them, I was confident I was covered incase I wished to fly any airline or stay at any hotel on a trip.
I categorize expenses and see what works best in a given month and I try my best to optimize my spending across the cards as follows:
|Groceries||4X MR Points |
5X UR Points (Quarter 2)
|Gas||5X UR Points (gift cards)|
4X MR Points (gift cards)
|Restaurants||4X MR Points||AMEX Gold|
|Travel||3X UR Points||Chase Sapphire Reserve|
|Miscellaneous||2X MR Points|
1.5X UR Points
|AMEX Blue Business Plus|
Chase Freedom Unlimited
The Sign-Up bonuses alone from meeting my own everyday spends as well as transactions for friends/family (with them paying me back) helped me collect points quickly. 15,000 UR points and 20,000 UR points respectively from the Freedom cards and 50,000 UR points from the Reserve card (not including the earnings from categorical spends).
Using 10,000 UR points I was able to a $777 two night stay at the Hyatt Hotel in Houston and using under 7500 points I was able to redeem $100 round-trip tickets between Houston and Chicago effectively for free.
Looking at the math, I effectively almost $900 in value for effectively only spending $50 on the Chase Reserve cards ($450 Annual Fee – $300 Travel Credits – $100 Global Entry). Additionally, I collected the points from my general spends to be used for further flight bookings (15,000 UR points for a $800 roundtrip ticket purchased two days before travel).
The Chase Sapphire Reserve card also provided me and upto three additional guests free lounge access and I put that to good use using airport lounges everytime I visited an Airport in India, Qatar, Tanzania and US.
Even if I assigned the limit of $28 for US airport restaurants tied up with Priority Pass (included with CSR; gives access to lounges), I was able to receive $560 in value by using the lounges/restaurants 20 times. One of the Lounges had shower facilities and you can imagine how great a shower feels in between flights.
Whenever I rented a rental car for a trip, I utilized the Primary CDW coverage offered by the CSR and that way my personal car insurance remained untouched in the case of an accident.
With American Express, I’ve not yet used my points but I’ve been accumulating a lot to use it towards a future trip where I know paying cash for it would be impossible. After working hard the whole year, the least you can do is reward yourself to a nice vacation without paying an additional dollar.
Biggest hurdle being the minimum spend requirements for some sign-up offers by credit card companies, but if you plan it out well some spends are possible. Some may involve you booking your own tickets, making an expensive electronic goods purchase or just initial costs associated with moving to a new place.
Next is the annual fee that scares some people. If you can calculate positive expected returns for a certain price you pay today, then the card makes sense for you. If you do not see such a gain and the card gives you negative expected value, try downgrading to a no annual-fee card or canceling it.
A great way to overcome minimum spend challenges is by using a service called PlastiQ which basically allows you to pay rent using a credit card for a minimal 2% fee. Now compare this to the sign-up bonus and you can see if it makes sense to you or not. Do check out a list of supported cards here.
If you wish to utilize this service and want to avoid the fee for the first $500 you pay towards rent, USE CODE 1123312 when signing up.
Make a plan for yourself and time your applications when you know you have spends coming up and which card to get. DO NOT overspend or over-extend yourself into getting rewards – if you don’t meet the requirements, don’t apply and put yourself in an awkward position. Do not take on another person’s expenses unless you trust that they will pay you back in full and on-time.
Do not spend on things you normally wouldn’t buy just to get more points as you’re then incorrectly using the cards. Always pay off all bills on time and keep track of your finances.
Planning is key even to redeeming your points towards travel. If a ticket is costing you $67 but you can use 15,000 points, you’re better off paying cash and using those points for something like a hotel stay or future flight ticket.
Read my articles on the Basics of points and miles and also on how to redeem them correctly.
Don’t fall under the false impression more credit cards and points = you being rich. That is a misconception, you’re only utilizing what you need out of what you have to gain what you want 🙂
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