Frequent Miler's latest team challenge, Million Mile Madness, is almost done! The last two weeks Greg, Nick, and Stephen competed to earn 1 Million SAS miles by flying 15 airlines. But who completed the challenge with the most Speed, Affordability, and Style?
Thanks to my hobby of aggressively collecting points and miles, I’ve accumulated an overwhelming number of credit cards and prepaid cards. I can’t keep all of these in my wallet, so I need a plan for which cards to take with me and which to leave at home.
When I wrote “One card to rule them all,” card decisions became easy… for a little while. My strategy at that time was to carry my Ink Bold for business expenses and reload cards, and my prepaid American Express card for almost all other purchases. I also occasionally used my Sapphire Preferred card for dining and travel. Then I began experimenting with other prepaid cards. First a NetSpend card, then a Mio card, and later a MyVanilla card were vying for wallet share. Life became complicated again.
Then came Bluebird. The American Express Bluebird card was so much better than the other prepaid options, that I happily put away everything else. For a brief time, life was simple again. I used Bluebird almost everywhere.
Then I realized that I wasn’t optimizing my point earnings by using Bluebird for spend (see “Now that you have a Bluebird card, don’t use it“). And, to further complicate matters, Office Depot stopped selling Vanilla Reload cards (see “Office Depot discontinues Vanilla Reload cards“). So, once again, I had to rethink what was in my wallet.
After thinking about it for a while, I now have a credit card strategy that I’m happy with. Here is my current approach (which will probably change in about 5 minutes):
Credit cards in my wallet
- Hilton HHonors American Express: I use this one for groceries, gas, and drug store purchases in order to earn 6 points per dollar within those categories. Hilton points aren’t nearly as valuable as Ultimate Rewards, but even if you value these points at just half a cent each, 6X equates to a 3% rebate on all such purchases. It’s also convenient that I’ve found local drug stores (CVS and Walgreens, for example) that let me to buy Vanilla Reload cards with credit cards.
- Citi Forward: I use this one for restaurants, bookstores (such as Amazon.com!), and movies in order to earn 5 points per dollar within those categories. If used wisely, Citi ThankYou points can be worth up to 1.33 cents per point (see “Forward 5X“). This means that 5X equates to as much as a 6.65% rebate.
- Chase Ink Bold: I use my Ink Bold to pay all telecom, cable, and internet bills in order to earn 5 Ultimate Rewards points per dollar within those categories. With the Fair Trading Price of Ultimate Rewards points at 1.31 cents each, 5X equates to a 6.55% rebate (although you can easily argue that it is worth much more). I don’t need to carry the card in my wallet for those items, though. I carry the card in my wallet to pay for business expenses and office supply store purchases (5X). I also visit the Office Depot gift card rack regularly…
- US Bank Cash+: I use my Cash+ card, this quarter, for charity and department store purchases. Within those categories, I earn a 6.875% rebate (see “Cash+ Update“). Each quarter I’ll have a chance to re-evaluate which categories to select for 5X earnings (US Bank offers quite a few options).
- Chase Sapphire Preferred: I use my Sapphire Preferred card for all personal travel expenses in order to earn 2.14 points per dollar (2X for travel plus 7% annual points dividend = 2.14). With the Fair Trading Price of Ultimate Rewards points at 1.31 cents each, this amounts to a 2.8% rebate. I also use this card as my catch-all for the few times that an expense doesn’t fit in the above categories, and I don’t have a gift card or prepaid card that fits the situation.
The strategy shown above is far from optimal. It is possible to do better within specific categories. For example, one could earn 6% cash back at grocery stores with a Blue Cash Preferred card; and one could earn 5% back at gas stations with a few different cards (see “Best Category Bonuses“). There are also better options for non-category spend. One could use an SPG card, for example to earn points that are arguably more valuable than Ultimate Rewards; or use the Capital One Venture card or the Escape Discover Card to get 2% back in the form of travel credit. Another very strong contender is the new Club Carlson Premier Rewards Visa (or the Business Rewards Visa). See “Club Carlson rocks our world… Again.”
Credit cards in my travel bag
Other than my Hilton card, I don’t use my hotel credit cards for day to day spend. However, I do like to use them when I’m staying at a hotel in order to get higher point earnings. Rather than carry my hotel cards around in my wallet, I simply keep them in a bag that I take on all trips. This way, regardless of the hotel chain I happen to be at, I most likely have a matching credit card for the circumstance.
What about “5X everywhere?”
Some will ask why I don’t earn 5X everywhere through one of the many tricks I’ve written about before. For example, see “Almost too good to be true,” “One card to rule them all,” and “The 5X everywhere backup plan.” These are still great options, but as long as its possible to buy reload cards and unload them through Bluebird (or a similar means), I can do better than 5X everywhere. For details of this thinking, please see “Now that you have a Bluebird card, don’t use it.” If options for buying reload cards dry up, then I’ll probably go back to one of the “5X everywhere” options for everyday spend.
What about meeting minimum spend?
Usually, credit card sign-up offers require high spend in a short amount of time to qualify for sign-up bonus. In those cases, I may add the new card(s) to my wallet until the requirements have been met. Or, I may find other ways to spend money quickly…
- Top 10 ways spend a lot of money (and get most of it back)
- Big News at BigCrumbs
- Using the Target Amex card to run up spend
- Minimum spend requirements? Kivalens to the rescue
- Note: at the time of this writing, the Kivalens web site is down. Hopefully it will be up and running again soon!
Reader comments
Can you think of ways to improve my credit card plan? And, how about you? How do you decide which credit cards to carry, and when to use which?
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@Amitgu – not only OD, Staples & Office Max give level III detail as well
I just checked that site and Officedepot submits Level III line item detail. Does that mean they know when people are using INK cards to buy Visa gift cards?
Amitgu: That’s the theory
@FM – thanks for the link. After a quick search, it looks like ALL office supply stores around my area offer Level III details. Has anyone tried searching for the ones around their area? Does anyone know what the implications of level III are? Am I just getting really paranoid or does it mean credit card companies are paying more attention to what we are inking?
How does Hilton HHonors American Express equal to 3% rebate? I just looked at the hilton hotel in Chicago. All the hotels will cost 40K to 50K points per night. However, they just cost around 120 dollars/night. It seems like 1 hilton point only worth about 0.25 cents. Are there any ways to better utilizing the points?
Hello: As I just replied to Chris, I usually see between .5 and 1.5 per cent value from Hilton points, so 6X is like a 3 cent to 9 cent per dollar rebate. Yes, there are properties and situations where points are worth less than half a cent each, but you’ll find that in all points programs. Sometimes it makes sense to redeem points and sometimes it doesn’t. For example, I just looked at a night in Chicago and saw that SPG wants 12000 points for the W Chicago Lakeshore, but the room rate for that night is just $110. For that hotel, in that situation, SPG points are worth less than a penny each. In most cases, though, SPG points are worth much more (especially when Cash & Points redemptions are available)
Hi,
I’m not understanding why you would use the HHonors AMEX card instead of an SPG card, even at a the places that pay 6x. By my math, the 1 SPG point is worth more that the 6 HHonors points, and is more flexible. Am I missing something? Thanks.
“…Hilton HHonors American Express: I use this one for groceries, gas, and drug store purchases in order to earn 6 points per dollar within those categories. Hilton points aren’t nearly as valuable as Ultimate Rewards, but even if you value these points at just half a cent each, 6X equates to a 3% rebate on all such purchases. It’s also convenient that I’ve found local drug stores (CVS and Walgreens, for example) that let me to buy Vanilla Reload cards with credit cards.”
Chris: SPG points are definitely more flexible, but I do value 6 Hilton points above 1 SPG point for hotel stays. In my experience, I can usually get between .5 and 1.5 cents per point value from Hilton points, so 6X is like a 3% to 9% rebate. With SPG, I usually get between 2 and 5 cents per point value. So, its true that 6X Hilton points aren’t way more valuable than 1 SPG, but I still think they are more valuable. The math becomes more compelling when you use the points on top end Hilton properties for 4 or more nights (so as to get an AXON or elite discount). Hilton top properties top out at 50K points per night, but go down to as little as 37,500 points per night for a long stay (with AXON or elite discounts). Top SPG properties can be as much as 35000 points per night, which goes down to 28000 if you stay for 5 nights and get the fifth night free. So when comparing top property to top property, SPG points are worth less than twice as much as Hilton points.
does anyone know for sure what level of info is submitted to Amex for purchases at drugstores? It does look a little suspicious for a normal person to spend around $500 at a drugstore a couple times a month. Any tips on how to make the transaction appear less obvious?
Teri: Here’s a roundabout approach. Go to this site and search for drug stores that offer Level III line item detail. If the drug store you shop in is not in the list then we can guess that the detailed information is not given to the credit card companies.
PJ: As long as the charge is from an insurance company it shouldn’t matter what exactly the charge is for. I expect you’ll still get 5%
harvson3: Yes, I just keep the Delta cards at home. Good idea about a post on the levels of info submitted to CC companies. I don’t consider myself an expert with that at this point, though…
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marathon man: As others have said, there are a number of miscellaneous travel expenses that the CSP gives 2X for. Of course if you don’t use it much for those things then it makes sense to lighten your wallet
Same here Jim, 5x via prepaid etc unless getting a bonus or meeting spend via a churn. 1x..even 2x is so yesterday in this game 🙂 I have 2 inks so plenty more to get
All spend is 5x for me. No need for anything else. Only if my Ink dries up will I then go to Plan B with Amex Surpass/VR/BB and get those Hiltonpesos.
marathon man,
Sapphire Preferred is very liberal on travel expenses: on top of airline hotel car rentals booked through EXPEDIA ( ie NOT DIRECTLY) etc are still counted as travel. Parking fees ( if small I pay with freedom cards) monthly commuting tickets. Time share maintenance fees RCI or Interval Internationalannual fees etc. are all ok Best with Sapphire Preferred: when you think you deserve the 2X, call them up THEY NEVER LET ME DOWN
referring to USbank 5 % rebate card:
I understand that insurance payment (statefarm in their website is included in bill pays along with cable wireless internet payments) is a 5% rebate.
Anthem CA let you charge monthly premium with Visa/Master card. Is this counted as the 5% Bill pay category? and also the auto home liability insurances ?
Put just shy of $30k grocery store spend on Amex BCP this month. Already passed FR.
My cards are similar but i was going to take out the sapphire. I still use amex spg for much in travel because i value spg points more than most. While the sapphire gives you the 2.14 do you think its ok if i take it out? Whats “travel” expenses anyway? Im already using the hh amex for 6x gas, and an airline specific cc for any airline fee, or amex plat for multi MR, so whats left? Car rentals? I dunno.
What about those Delta cards you’re using to get status (“mileage run from home?”) Are those in your wallet, or only at your home computer desk?
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I also think that the recently-posted FT link on levels of transparency – Levels I-III and what the CC bank can and can’t see – is part of a good cautionary tale/post that should be told. Unless we want to just lead the lambs to slaughter, which might make some other people around the blogs happy.