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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!
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?