Double Duty Daddy

Credit Card Rewards: What’s Your Type?

Credit card map photo

 

Disclaimer: I am not a financial professional or credit card consultant, nor do I claim to be. Do your research before applying for credit cards and understand how it impacts your overall credit health. 

Before I start posting about specific topics in the points & miles world, I wanted to lay the groundwork with regards to who the heavy hitter banks are in the hobby.

The 3 main players in the credit card rewards game are Chase, American Express and Citibank with an honorable mention to Barclays. There are 2 approaches most people take when entering the world of credit card reward programs; deciding whether to accrue cash back OR points/miles. Some do both but for starters, it’s probably best at analyzing what your personal goals are and choosing one rewards-earning currency: cash back via statement credit or points and miles to use towards travel.

I’m heavily invested into accruing points and miles rather than cash back. After 17 new credit card openings in the last 2 years, each of them are of the points and miles variety. Cash back cards may make a lot of sense for you if you don’t travel much and want to earn cash but whatever you do, avoid using a debit card for your spend. Debit cards will earn you a whopping ZERO points and they generally serve as backups incase you go to a place that doesn’t accept credit cards or need to take out cash from an ATM.

You may be wondering, what impact all those new credit card account openings have had on my credit score? My score has improved to the mid to upper 700’s from the low 700’s since  I started opening up new accounts. There is an old wives tale that claims credit cards are bad for your score and signing up for them will only hurt your future credit worthiness. It couldn’t be further from the truth. If you’re responsible with your finances, pay your bills on time and pay your balance in full each month, credit cards will only help your credit score.

One of the first points blog I started following in 2013 was Frugal Travel Guy. Rick and his knowledgeable team of points and miles enthusiasts provide a “Rookie Guide” on their site that is a great place to start for the newbie that wants to learn about the points and miles hobby. Read Rick’s post earlier this year on his credit cards outlook: Credit Scores and Cards.

Back to the 3 main players. My favorite award currency to accrue are Chase Ultimate Reward points. Chase has some awesome partners like Southwest, British Airways, United and Hyatt amongst some other well known brands. Plus, they have an extensive portfolio of credit cards that consist of the Chase Freedom, Chase Sapphire Preferred and Chase Ink Plus.  Since I live in Miami, one of American Airlines hubs’, I love transferring my Chase UR points to British Airways Avios and booking AA short-haul flights with BA Avios for a lot less miles than if I booked same flight with AA miles. Confused? Don’t worry, detailed post to come next week.

So now, you should ask yourself: “do I want a fixed point/miles currency where I can earn one type of point/mile like American Airlines miles?” OR “do I want a variable point currency like Amex Membership Rewards points where I can earn points that can be transferred to many airlines/hotels?” In the future, you can mix and match and even add cash back cards if you’d like. To start, keep it simple and choose one type.

Finally, you may want to reassess your current credit card portfolio and/or decide on future credit card products. Either way, this post should get you thinking about your credit card situation and your personal reward-earning goals.

 

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1 Comment

  1. Adrienne August 12, 2015 at 3:29 am

    BRAVO! Amazing first post about the complex yet rewarding world of travel hacking! Juan you’ve got me back in the game! For everyone reading who’s interest is piqued keep reading. Learning this process is a mind-f** at first and I wish I knew Juan/he had his blog a few years back when I started delving into this world. I too started with reading Frugal Travel Guy who gives a lot of great laymens intro education into the world of travel hacking/accumulating miles/points with CC’s. I NEVER use my debit card it’s worthless! As Juan is, I am a also firm user of the Chase Sapphire Preferred and now (thanks to Juans help) all be applying for the Chase Freedom to double up my UR points. I’m sure he’ll be delving into why these cards (in my opinion are the best way to go so keep your eyes out)! Stick with DOUBLE DUTY DADDY, .he’s the real deal that will help break this process down for you to understand and get excited about stockpiling points so you can travel for virtually free…(and if you’re a wanderluster like me you’ll need to)!! Thanks Juan can’t wait for more!!!

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