Do credit cards points make sense for us
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Anonymous
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Dh and I are very HHI, almost exclusively from investment income. We have never paid much attention to credit card reward programs. I primarily use discover and he primarily uses a Costco card. Both pay 1% cash on everything with some things paying more.
We have never been loyal to an airline and typically fly 2-3 times per year, of which one is usually to the Caribbean and one to Europe although we’d like to travel more with the kids and go further. The last flight is usually intra us. We fly economy although in theory of love to fly business. We can afford it but I cannot reason spending that much on a flight for 5 of us. We also aren’t large people so we do in fact fit comfortably in economy. Typical credit card spending is $15k-$25k per month. We often book flights last minute (30-60 days out) and just go with whomever is direct and out of National unless flying out of bwi or Dulles is significantly cheaper. Stick with what we are doing or learn the miles games and if so where would I start? |
Anonymous
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https://thepointsguy.com/credit-cards/cash-back-vs-points-and-miles/
I don't know the details, but you could probably figure out some way that would save you money, by getting a different card, and even allocating your spending among different cards to maximize the benefits, then figuring out how best to use the points. But you know why I don't know? Because I figure that I have enough money that doing all that work isn't worth my time, and I don't have nearly as much as you do. (I just use a points card and every 4-5 years pay for a large family trip with the points. I don't know if cash back would be better, but again, I prefer simplicity to maximizing reward value.) With a 1% back and $20,000 in spending, you're getting $200 a month. Say using points would bump that up to $300. Is it worth the effort? $400? Different people have different preferences; some people enjoy the game. |
Anonymous
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A significant feature of rewards programs are the sign up bonuses. The good ones will have a redemption value of $1,000-$1,200. People who have been doing this longer or at a higher level than I am can probably do better, but that’s my guideline for opening a new credit card. You spend so much each month that you could quickly rack up tens of thousands of rewards points with several different programs pretty quickly.
In general, the more limited the redemption options (ie, American Airlines or Hilton…Fairmont was awesome back in the day), the higher the value of the points. You trade value for flexibility. More general credit cards, like Chase Sapphire, will have lower value rewards (but higher than cash rebates) in exchange for more options for how to redeem the rewards. 1% cash back is the worst choice. |
Anonymous
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I hate airline miles game, so I don’t do that.
I have an amazon prime card. I spend so much on amazon and Whole Foods that the rewards really add up and I feel like it’s “good enough” as far as maximizing rewards for daily spending. DH uses AmEx and does the travel booking with that, but he loves all the little reward games it comes with. I think he buys miles with points, or something like that. |
Anonymous
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OP, you don't need to play the points game to get more value out of your spending and credit cards.
You just need better credit cards that provide more benefits. 1% cash back is ridiculously low. This is the bare minimum that even the worst credit card would offer. For example: The Citi Double Cash card gives you 2% cash back on everything and has no annual fees. If you don't want to play the purchase categories game, this card is great because with no additional efforts, you could already double your cash back return. Because you travel 2-3 times per year and I think playing the points game would make sense for you given your level of spending. Points cards are generally superior to cash back cards for three reasons. 1- points can be redeemed for cash. the reverse isn't generally possible. This gives you the flexibility to use your Points card as cash back when you want, while still enjoying the additional options that Points provide. 2- points can often be redeemed at higher value than cash back. This is one of the best benefits of Points. You can transfer your points to Airlines or Hotel programs, and get up to 10x higher value than cash back. I had 50000 Amex points. Their basic cash back value is $500. I transferred these points to Delta Airlines and used them to purchase a one way Business Class ticket to Europe that would have cost me $3000. You can see how the points in this case were 6X more valuable than cash back. That's easy, simple redemption, no need to play games. People who play the points game would often find even better deals up to 10X or more. 3- points cards are often premium cards that offer many premium perks My recommendation for you: - Get one of these premium travel cards (Amex Platinum, Chase Sapphire Reserve or Capital One Venture X) and use it for all of your travel purchases. For example, Amex would give you 5X points on travel purchases. Spend $10000 and you have 50k points (good for a 2-way economy ticket to Europe or 1-way business ticket to Europe). That's the very simple and basic game. If you want to play more, you can get other cards that give you more points on other categories to boost your points. But you don't need to if you don't want to go to that level of the game. |
Anonymous
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High HHI here also. My CC bills are $10-20k/month. I have an AmEx Platinum and a Chase Sapphire Reserve. Both will give 3-5x points depending on waht you spend on. AmEx gives great status, like Gold level on Hilton and Marriott, which I use all the time. Also Global Entry/TSA Pre fees are covered, and Clear (Amex) and a bunch of other stuff. At your spend, it's worth it.
I think I have 800k AmEx points currently. I can convert them directly to buy _any_ ticket at $0.01 per point, but more beneficial is I can convert to miles at bunch of airlines. For example, I can fly tomorrow to London using United miles, for 88k miles in business class on Lufthansa (great service, better than United) via Frankfurt or Munich. That same ticket would cost me $6,361 if I bought it. On Chase, I get 3x points for spending on lots of categories like dining and travel, so I'd need to spend $30k on Chase to get 90k points that I convert to 90k United miles. $30k of spending for a free one-way business class, leaving tomorrow, to London. You do that in 1-2 months. On your 1% cash back card, you'd need to spend $630k (!) to get the $6,300 to buy the same ticket. |
Anonymous
| I consider it the biggest luxury not to go nuts over this stuff. My coworker keeps 8? cards and has a cheat sheet. Gas goes on this one, food on that, travel #3. Enjoy Larla.. |
Anonymous
+1 Just get Chase Sapphire or Capital one Venture or Venture X and call it a day. |
Anonymous
| AmEx Platinum offers great travel benefits like upgrades, lounge access, amenities, etc. That would prob be your best bet. |
Anonymous
| I’m not willing to pay the annual fee right now but my friend really like the AmEx Platinum perks and feels she gets her money’s worth. |
Anonymous
She’s also getting big rebates against the annual fee. |
Anonymous
+100 |
Anonymous
| No |
Anonymous
Op here. The headache of managing this does not seem worth it to me for $100-$200 per month. My time has more value than that. |
Anonymous
| We travel fairly regularly and I'm not even very savvy at the miles game, but I still think it's worth it. I'm flying to Paris in two weeks with my husband and daughter on United Polaris, which I upgraded from economy using points/miles. |