Over the years Charlene and I have designed a credit card strategy. The strategy is structured to maximize the travel credit card assets we generate from our yearly credit card spend and available travel bonuses offered by the credit card companies. Like the naked god with the team of oxen you have to understand that you might have to change your strategy as the environment changes. For reasons I don’t understand credit card companies are constantly adjusting and changing their products so you have to keep up with those changes.
This article may have to be changed tomorrow because of changes in credit card policies but as of today I’m going to describe what cards we presently have and why we have them.
We only have two long-term branded cards that we hold long-term. The Citi Bank AAdvantage Platinum Select card from American Airlines and the Barclay Choice Privilege card for Choice Hotels.
We chose the AAdvantage Platinum Select because American Airlines is our Airline of choice and the Platinum Select only charges a $95 dollar fee. Other advantages the card offered that were important to us were the free bags, early boarding and 10% refund on air mile redemptions. We never use this card for purchases and only keep it for the advantages it offers when we travel on American Airlines.
We hold the Barclay Bank Choice Privileges card long term because it offers a 15 point per dollar spent Choice Hotel purchases. We only use this card when we pay for Choice Hotel nights. We chose Choice Hotels as our hotel chain of choice because their products are inexpensive, clean and offer breakfast. Choice Hotels also often run offers that allow us to stay two nights and get the third night free. Because we have chosen to build loyalty only with Choice hotels this no annual fee card makes sense for us. The value of a Choice Privilege point is about .6 cents so the return on a dollar spent at Choice Hotels is about 9%. That is the type of return that will convince me to hold a card long-term
There is a method to our madness. The AAdvantage card is in Charlene name and the Choice card is in my name. What that means is we always have these two card’s advantages and I can churn AAdvantage cards every 24 months and get the bonus and Charlene can churn her Choice Privileges card about once every 18 months. By using this strategy we have long-term cards building our credit and helping to establish our loyalty with our go to Airline and Hotel chain and we can still take full advantage of those companies offered bonuses.
Some people would argue that we should have many other branded cards long-term in our wallets but we prefer to actively churn the other brands that we now we won’t use enough to generate actual loyalty advantages thru their programs. Let me give an example the Marriott Rewards card at this time offers 80,000 Marriott rewards points that could be ten free rooms! The Marriott Rewards card is offered by Chase and as a rule of thumb will only allow you to open 5 credit card accounts over a 24 month period. That means Charlene and I can get 160,000 Marriott points every two years. That is a lot of free Marriott stays and I don’t want to give up that ability to churn to build loyalty with Marriott.
Along with our two Branded cards we also have three non branded cards that we hold long-term. We hold 3 non branded cards for entirely different reasons then the branded cards above. We held the AAdvantage and the Choice Preferred for loyalty advantages. We hold the next three cards I’m going to talk about now to maximize our spend and for reward flexibility. The three cards we hold for everyday spend are the Chase Sapphire Reserve, the Barclay Arrival Plushttp://geezerswithpassports.com/the-travel-credit-card-part-three-the-barclay-arrival-cards-statement-credit-system/ and the American Express Every Day Preferred.
The Chase Sapphire Reserve is a great long-term card. It offers amazing long-term benefits like; a $300 travel credit each year, the card includes free membership to nearly a 1000 airport lounges thru the Priority Pass program, 3X points on travel and dining and a healthy ~2 cent value for the Chase Ultimate rewards points. That means for travel and dining I enjoy a tax-free bonus of 6 cents on every dollar I spend. The big downfall of this card being a long-term card is it’s $450 dollar fee but the travel credit brings that down to a reasonable $150 fee and after we stay at a dozen of the Priority Pass lounges were way ahead of the game and are still raking in 6% return on our most common expenses.
The American Express Every Day Preferred is a no brainer for a great long-term card. We get 3X points off this card for groceries and gas and the value of an American Express point is ~2 cents for a return on your spend of 6 cents. 6% back on your money is good but this card has more icing on the cake. If you make 30 purchases in your billing cycle you get an additional 50% bonus that takes the spend return on this card for groceries and gas up to 9 cents on the dollar. Every one spends money on groceries and gas and this card insures a high rate of return on those items. At $95 a year this card is a bargain.
The final card we hold for spend is the Barclay Arrival Plus card. Unlike the Sapphire and the Every Day Preferred the Arrival plus only offers a 2 cent return on the dollar but that’s for every purchase so we use it to fill the gaps the other two cards. The Barclay Arrival Plus is not a long-term keeper because of the return on spend it generates but instead because it’s “credit statement” form of redemption allows us to shop on-line for bargain travel on small discount vendors like Ryan Air and pay for unusual travel benefits like timeshare costs and taxis with our travel rewards. One of the gaps in traveling for free are the incidental costs and this card covers those costs. The $89 fee is a little steep but this cards flexibility, at least for the time being makes it one of our choices for a long-term card.
The final card on our list of long-term cards is the American Express Platinum Card. We rarely use the card for spend but we keep this $450 a year card for some very specific reasons. First, we have had this card for over 30 years so it’s a central part of our credit score. If we dropped the card it would drop our credit score to some degree. Second, the Platinum card gets us into our favorite lounges the Centurion airport lounges which we love. Third, the Platinum card allows us to designate an Airline each year and gives us a 50% refund on our miles spent purchasing flights on that airline. Because it has become our go to Airline we have chosen American Airlines. American is a very weird airlines sometimes it’s tickets are cheap and some times their stupid expensive. As a Geezer I’m a patient guy and I have been know to wait for months to find the best flights our overseas destinations such as Europe and Asia. The other day I found the cheapest flight to Paris was with American and by paying for the flight thru American Express I was able to get Charlene and I a round trip flight to Paris for both of us for 45,000 points using the 50% refund program. Those types of deals don’t show up very often but because I have the Platinum card I take advantage of them even if the points come from other American Express Cards.
The Barclay Arrival Plus and the American Express Platinum are two cards that may get changed out in the future but for right now they work in our wallet.
While were talking credit card strategy there are a few other things we should talk about. Right now Charlene and I spend about $10,000 of our annual spend churning cards. This is the highest value you can get for your spend. I we spend $3000 in spend to get the 80,000 Marriott point bonus is worth ~$800 so the return on that spend is about 30%. Bonus points can have an amazing impact on the power of your yearly everyday spend.
In manipulating travel awards you also have to consider the added value of dining clubs and shopping portals can also significantly increase the travel rewards you every day spending can generate. I have my AAdvantage dining club membership tied to my Chase Sapphire Reserve so when I dine at a dining club restaurant I get as much as 14% back on my spend in travel assets.
So in closing this little set of articles I’d like to draw all the pieces together by showing a conservative year of spend for a family that spends ~ $40,000 on their credit cards and uses the tools that have been mentioned in these articles.
|TYPE OF SPEND||SPECIFICS||CARD USED||BONUS POINTS||SPEND||DOLLAR VALUE
|BONUSES||AADVANTAGE CARD (1)||NEW AADVANTAGE CARD||30,000||$1000||(30,000 + 1000) X 1.5 CENTS = $465|
|NEW MARRIOTT CARD||80,000||$3000||(80,000 = 3000) X 1 CENT = $830|
|BARCLAY ARRIVAL PLUS CARD (1)||NEW ARRIVAL PLUS CARD||50,000||$3000||(50,000 + 3000) X 1 CENT = $530|
|DELTA SKY MILES CARD||NEW DELTA SKY MILES CARD||30,000||$1000||(30,000 + 1000) X 1.2 CENTS = $372|
|CITI THANKYOU PREMIER CARD||NEW THANKYOU PREMIER CARD||30,000||$3000||(30,000 + 3000) X 1.6
CENTS = $528
|REGULAR DINING||CHASE SAPPHIRE RESERVE (3X)||14,400||$4800||14,400 PTS X 2 CENTS = $288|
|DINERS CLUB DINING||CHASE SAPPHIRE RESERVE (8X)||9,600||$1200||9,600 PTS X 2 CENTS
|TRAVEL COSTS OUT OF POCKET||CHASE SAPPHIRE RESERVE (3X)||3000||$1000||3,000 PTS X 2 CENTS
|GAS||AM EXPRESS EVERY DAY (3X)||10800 X 1.5 BONUS= 16,200||$3600||16200 PTS X2 CENTS
|GROCERIES||AM EXPRESS EVERY DAY (3X)||18000 X 1.5 BONUS= 27000||$6000||27000 PTS X2 CENTS
|CAR EXPENSES||BARCLAY ARRIVAL PLUS (2X)||4800 (X2)||$2400||4800 PTS X 1 CENT
|CLOTHING BOUGHT IN SHOPPING PORTAL||BARCLAY ARRIVAL PLUS (2X)||4000 (X2)||$2000||4000 PTS X 1 CENT
|MISC. MERCHANDISE PURCHASED||BARCLAY ARRIVAL PLUS (2X)||16000 (X2)||$8000||16000 PTS X 1 CENTS
|CLOTHING AND MURCHANDISE BOUGHT ON AADVANTAGE SHOPPING PORTAL||AMERICAN AIRLINE MILES||9600 (X4)||( $2800 SPENT ABOVE) = -0-||9600 PTS X 1.5 CENTS
|TOTALS||$40,000||$4441 IN TRAVEL ASSETS. THIS REPRESENTS A 11.1% RETURN ON MONEY|
Just following the guidelines outlined in the ten articles on Travel Credit Cards could conservatively net a couple with $40,000 in credit card expenditures a year a total of $4,441 in travel assets.
As you will see in other articles getting the travel assets is only half the message from Geezerswithpassports.com the other half is taking those travel assets and stretching them into the dreams of a lifetime