When I started my job a little while back the first thing they recommended that I do was sign up for a few different credit cards. I was a little confused at first. Now though, it makes so much sense. With how much I travel for work purposes I rack up points like crazy. But you don’t have to travel a lot in order to build points.
First Credit Card
,The first credit card that I ever signed up for was the Discover 5% cash back card. I got this card my freshman year of college and still use it to this day. It was a fantastic first card and I would recommend it to anyone just starting out. They started me off with a low limit and then gradually increased it over time. Every so often give them a call and ask for a increased limit. Most of the time they would double mine. It was a fantastic way to help build my credit and when I graduated my score was in the 780’s. A good rule to follow is try to keep your spending less than 10% of your total limit every month.
What I currently have in my wallet
My favorite cards right now:
- Chase Sapphire Reserve (Earns a ridiculous amount of points with a lot of perks)
- Chase Marriott Rewards Card (Gets me extra points on top of my member status)
- Discover 5% Cash Back Card (No fee, only used when the 5% is in the right category)
- American Express Gold Card (One of my old favorites but is on the cutting block this year)
Although the Chase Sapphire Reserve card currently has an annual fee of $450, I find it completely reasonable for all that it offers. Right off the start you get $300 in annual travel credits. If your like me you are going to take at least one trip every year so you will use every bit of that credit on a rental car, plane tickets, or even a hotel room. The card also pays for the application fee to get TSA Pre-check or Global Entry up to a $100 value. Those two perks alone counter the $450 annual fee and from then on you earn points on all purchases.
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Best uses for credit card points
There are so many fantastic uses for points, but it all comes down to getting the best return rate. When we exchanged American Express points for Home Depot gift cards we were getting a exchange rate of 10,000 points = $100. If we look at what we can get with the Chase Sapphire Reserve points we find that we can get a 50% bonus when we use it towards travel. The only catch is that the travel has to be booked through Chase’s travel site.
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Here are the 3 thing I like to spend points on:
- Gift Cards
Chase Sapphire Reserve
So far this year we have earned 33,250 points on top of the 100,000 we got for signing up for the Chase Reserve Card. If we exchanged just the points we have earned (33,250) it would be worth $300 in gift cards or $450 in travel.
American Express Gold
We have earned 11,000 points on our American Express Gold Card this year and the best exchange we have found that benefits us is for gift cards towards Home Depot or Marriott hotels. This year we have shifted most of our spending to the Reserve card so there is a good chance we will cancel this card at the end of the year. The annual fee is typically $195 but the first year is waived. This year I talked them down after planning to cancel to a fee of $95. I feel like in our situation that we do not spend enough in order to make having multiple cards with annual fees worth it.
Discover 5% Cash Back
For our Discover Card we earn cash back which we either use towards our statement balance or towards purchases on Amazon. The card is only good for those times of year when it offers the 5% back on categories we typically spend in. For instance this spring the category was Home Improvement and we took advantage of it for our landscaping project. In the past they have offered cash back on fuel purchases but since I only commute 2 minutes to work it really was not a super useful category for me.
Finally I use my Chase Marriott Rewards card exclusively for work purchase which keeps everything separated and simple. The amount of points that I earn with it varies based on the amount of travel I am doing. We jut recently visited friends in Saint Louis over Independence Day weekend and our hotel was booked solely with points. The card comes with 1 free anniversary night every year at a category 1-7 hotel which pretty much covers any hotel in the United States and some resorts even. The other night we used 20,000 points. For a hotel that typically charges $250 per night I think we did well. Besides I earn 5 points for every dollar spent at a Marriott or SPG property with the card.
The World of Points
The Points Guy has a fantastic site for tips and tricks as to maximize your points value. Check out all of the loopholes he uses to maximize his value. I like to keep things simple but will definitely be trying to find a way to maximize our point value when we start planning a trip to Europe.
What tips and tricks do you have for using credit card points? How do you take advantage of your credit card spending?