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My wife and I churn credit cards for miles and points.
We don't spend above our means at all. Both of our credit scores are in the 800's. Our combined income is about 140K, our mortgage is about 680 a month. Small car payments, I think combined they are about 500-550 a month.
We charge everything all month.. it is rare for me to have cash, and the only time I use my debit card is to get cash out. We then pay the bills in full every month.
In the last 5-6 years, we have flown to Europe at least 7 times for nearly free, Colombia, Costa Rica, Mexico, cross country for a wedding, etc. In fact, I think 5 of those Europe trips we flew lie flat business class on the way there, and once on the way back. The most recent Mexico one, we stayed in an All Inclusive Resort for 6 nights for completely free in Puerto Vallarta on points. We also have a trip planned for April there and back in business class. Colombia and Mexico trips recently were both in business or first class. We have done that on miles and points.
The best card to start with right now would be a Chase Sapphire Preferred.
If that is of interest to you, then credit cards can be awesome, IF you manage them responsibly.
Thanks, Ion! Since it was recommended a few times (also on another thread I perused), and I already have an account with Chase, I went ahead and applied… got instantly approved for $5000, so I guess I’ve got a Chase Sapphire card now. Figure it doesn’t hurt to try, as I can afford the bills and trust myself to use it responsibly.
Yup. Unless you're spending a lot of money, and paying it off in full every month, CCs are not going to change your life. Do what works best for you.
I have several cards and plenty of reward points, cash back is nice, but it's not life changing or absolutely necessary.
I’m not looking for it to change my life… that’s a bit dramatic! Just thought the perks might be nice, since I’m hoping to start traveling more. Plus I recently bought a home, so I have been and will be doing more big purchases (e.g. I’m shopping for a hot tub and exercise equipment right now) than usual.
What I'm doing "works for me," but free stuff (especially cash) sounds good too!
Here's what (financial 'guru' Dave Ramsey says in regards to CC s and "Perks/mileage pts/cash back":
He says 'I've never heard a millionaire say "I made all my money with CC miles/perks/cash back, EVER".
Now, I WONT dispute that there MIGHT be, CAN be "gains" from CC perks.
(I will use the term "cash back" or "cash" to signify ANY "rewards benefits".. except specifically for flyeriles here below)
But, some cash back cards have an annual fee, will you actually use it enough to get cash back in excess of the annual fee?
Some have a higher interest rate just to give you cash back, and that may be fine for those who actually do pay off and NEVER pay interest...key is NEVER...the word NEVER is often not always an "absolute".
I will grant though, that paying $10 in interest even once on an "oops I'm a day late ony payment" vs. getting $150 "cash" in a year is still a win.
Often, you only get a credit back off on whatever balance you have, it's not like they'll send you a check to do with as you will.
I have a fixed 8.9% CC and a variable 22.9% Cash back card. And while I never pay interest on either, to me, the psychology of that higher interest rate vs the fixed ...is..just a mind game that I'm being penalized to get cash.
Some cash cards really are only points, and it can take a LOT of pints just to get a few dollars in credit towards my balance.
Air mile cards are all over the place...some have black out dates you cannot fly and use those miles; we don't travel enough to actually really benefit from miles; and I've seen the requirement of lots and lots of miles for a flight I might get a discount on booking with cash for.
We have a Fidelity cash back/points card. We just let the points accumulate, and with 20,020 points, I finally decided to check into cashing those in, all those points could only be cashed in and credited to your fidelity investment accounts and 20,020 points gave us $102 to be added to our ROTH IRA s, so, all good, and I don't know how many points are earned per $1 spent..don't care as we don't get CC s just for cash back. It's just a nice bonus, is all....oh and no annual fee and we were invited to apply because of our Fidelity investments.
Yes, if you use the CC enough, and can use it to your advantage it's ok and a nice bonus, but as someone said above if what you're doing works for you, I wouldn't go after the cards just to get rewards of any type.
Oh, and I know some "miles" cards can also be used to buy say a gift card for a store you're regularly shopping at, it's not just for flights.
However, to get A $20 gift card you might need 10 million miles, whereas a cross country flight might only take 200k miles.
The Platinum Amex isn’t cheap but I disagree with a number of the comments saying you have to spend a lot to come out ahead
I think the sign up bonus is bouncing around 100k-125k points with 6k In spending over 6 months. The Resy offer was 125k plus 10x on restaurant spend in the first 6 months. That signup bonus covers the fee for the first year essentially or better I’d you use the points well
15.00 a month in Uber credit, 35.00 in December
20.00 a month in digital credit reimbursement for audible, xm, Disney plus, Hulu
200.00 annual hotel credit(this one is meh imo)
200.00 airline incidental credit, some have difficulty using it but I don’t
12.95 a month Walmart + memberhsip reimbursement
300.00 equinox reimbursement
50.00 2x a year saks credit
189.00 annual clear reimbursement
85/100 ever four years precheck or global entry reimbursement
Hilton/marriot/Hertz gold status
Centurion lounge access
Priority pass membership(not as good as chase or cap ones versions)
My closest friend, a well-paid nurse with a CEO/startup husband, keeps telling me I should get an AmEx Platinum card for all the perks.
Assuming you are using a personal card (vs a business card), you also get purchase protection when using a credit card. If the goods are not delivered/not what was promised, you can do a charge back and not lose any money. Fraud liability is limited to $50, though it seems most issuers limit it to zero.
My closest friend, a well-paid nurse with a CEO/startup husband, keeps telling me I should get an AmEx Platinum card for all the perks. Supposedly she ends up "making" more than she spends, with perks like airline mileage and gift certificates to places like Nordstrom.
Did she also tell you that the annual fee is now $695? I've had an AmEx Platinum Card for 30+ years, but I wouldn't recommend one to you unless you travel a lot because most of the benefits are travel related.
Quote:
Originally Posted by Lowexpectations
The Platinum Amex isn’t cheap but I disagree with a number of the comments saying you have to spend a lot to come out ahead
I think the sign up bonus is bouncing around 100k-125k points with 6k In spending over 6 months. The Resy offer was 125k plus 10x on restaurant spend in the first 6 months. That signup bonus covers the fee for the first year essentially or better I’d you use the points well
15.00 a month in Uber credit, 35.00 in December
20.00 a month in digital credit reimbursement for audible, xm, Disney plus, Hulu
200.00 annual hotel credit(this one is meh imo)
200.00 airline incidental credit, some have difficulty using it but I don’t
12.95 a month Walmart + memberhsip reimbursement
300.00 equinox reimbursement
50.00 2x a year saks credit
189.00 annual clear reimbursement
85/100 ever four years precheck or global entry reimbursement
Hilton/marriot/Hertz gold status
Centurion lounge access
Priority pass membership(not as good as chase or cap ones versions)
Another important benefit (at least to me) is their Cruise Privilege Program in which you receive shipboard credit and other amenities when you book through Platinum Travel Service. For example, I recently booked a Windstar cruise for this October and I will be receiving $300 to be spent onboard, which by itself represents almost 45% of my annual fee. And when you add in the $200 in credit I'm using for upgrading my seats on my airline flight, as well as the $200 hotel credit in Athens, this one trip alone will return the entire annual fee.
The Platinum Amex isn’t cheap but I disagree with a number of the comments saying you have to spend a lot to come out ahead
I think the sign up bonus is bouncing around 100k-125k points with 6k In spending over 6 months. The Resy offer was 125k plus 10x on restaurant spend in the first 6 months. That signup bonus covers the fee for the first year essentially or better I’d you use the points well
15.00 a month in Uber credit, 35.00 in December
20.00 a month in digital credit reimbursement for audible, xm, Disney plus, Hulu
200.00 annual hotel credit(this one is meh imo)
200.00 airline incidental credit, some have difficulty using it but I don’t
12.95 a month Walmart + memberhsip reimbursement
300.00 equinox reimbursement
50.00 2x a year saks credit
189.00 annual clear reimbursement
85/100 ever four years precheck or global entry reimbursement
Hilton/marriot/Hertz gold status
Centurion lounge access
Priority pass membership(not as good as chase or cap ones versions)
It has gotten ridiculous in what they offer now. I struggle to justify the $695 because most of the stuff isn't really as useful as you think. I got it for the lounge access originally and then realized unless you order a few drinks every time that access isn't really worth all that much. I get the digital stuff only because I get credit for it, but I wouldn't subscribe if not for it as an example. And just try to find anything useful at Saks for $50!
Anyways my two cents on this in responding to the OP is that of course you want to get at least a few CCs. Don't you rent cars or stay in hotels? Not having a CC for those is a mess, I would never suggest doing it without a card that provides rental insurance so you can save a lot of money there and not have to wait 10 days or more to get hotel and car deposits back to your account if you use debit. Plus the protection for fraud or warranties buying with CCs is well worth it. I never use a debit card, its an ATM card to me because the protections on them are terrible.
The benefits of paid cards can be worthwhile if you do the research, but I think the premium cards are best left for people who do travel a lot and get reimbursed for much of it. I fall into that category so I get value out of them, but I tell my wife don't spend more than $100 fee on cards because she does not get travel reimbursed. For under $100 you can get some decent benefits on cards if you are brand loyal that can be well worth the expense. You can also get some no fee cards that give you 2-5% cash/points back that are no brainers. I get 3-5% cash back on gas purchases and the cards I use for them don't charge me any fee, why wouldn't I take that?
No its not going to make you rich, but its literally free money for things you would buy anyways. I do caution about things like the Platinum card, it could get you to spend more than you were planning to so I don't suggest it to most. But get a couple of no fee cards at least to start and then consider cards with annual fees. Look for ones that will give you some coverage on rental car insurance if you ever rent cars, that alone is a huge money saver and gives you peace of mind.
So I've never been a huge fan of credit cards, mostly because in the past I simply didn't have the financial stability to trust myself - let alone to ensure the bills would be paid in full every month (to avoid interest and/or penalties).
I was in this situation until I was around 35ish. And I had gottten a credit card in college.. Thankfully with a pitifully low limit on it.. It wound up maxed out. I closed it, paid it off and didn't get another card until my mid 30's.
At that time, I felt a little more in control.. And I had learned the lessons from the first time. So, it went well. The main reason I got a card was just for an emergency plus.. Renting a car or staying in a hotel without a card is problematic.
You mentioned your credit score being in the mid 700's.. Having a card would likely bring you up into the 800's.. I'm currently sitting at 833. You sit in the 800's, ain't nobody that can tell you that you don't qualify for something, lol.
Overall, I tend to agree with @oneasterisk where they say "Hey, if it's working for you"
Are you missing out? Not a whole lot, because unless you really get in there and play the game.. Charging everything to a card, paying if off each month.. Adjusting where and when you shop to get the best cash back or points or whatever.. Which.. Not something I'm going to do.. You're not missing out on a whole lot. If you want to get in that game.. Yeah. Like the extreme couponers, you can save/earn a whole lot by playing the game.. But.. Not worth it to me. I do things as per normal and just take what I get from that.
I probably would recommend you get a card, just to have it. So a no annual fee card. There's times it is quite convenient. But don't let it change what you're doing and how you're spending. If that happens, you're kinda shooting yourself in the foot.
I currently carry about 5, I think.. I have a Walmart card, because they give cashback.. I have a Visa that gives cash back that I pay monthly bills on.. Home Depot and Lowe's cards for the 0% financing and I rarely use those. That's.. About it. Everything is paid off usually a day or two after the charges are made and only that long because it takes that before they're posted.. I was ticked about 2 years ago when I got hit with a $3.00 or so finance charge from Home Depot because I had put something like $28.00 on my card (Mostly just to make sure it stayed active) and misclicked on the payment and sent the minimum of $25.00 instead of clicking to pay the balance. So I carried a $3.00 balance and got hit with $3.00 in 'interest' on it because the minimum finance charge is $3.00.
Rather than thinking of what a credit card can offer you (but that is a bonus if you get one that gives you something free) you should be thinking about a free credit card, which perhaps the Chase one is. You do not have to use it except occasionally, if you want. The reason is because a credit card paid off promptly adds to your credit score. When you get it, set it up immediately to pay your balance in full every month automatically. Any card that charges you to keep it does not seem to fit into your lifestyle, which has been to use cash, so I wouldn't opt for this since there are so many free cards out there. Use it enough to keep it active, and have the balance taken from your checking account every month. Don't confuse credit cards with debit cards. Debit cards do not alter your credit score and are therefore useless for that purpose.
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