I’ve Failed My Dad When It Comes To Credit Cards

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I’m responsible for the miles & points strategy for my family, just as I’m sure that many of you are responsible for this with your families. Does someone need help redeeming miles? They call me. Does someone have a question about which credit card to use? They call me.

I appreciate that they do this, because I get extremely annoyed when they do things on their own, say “I didn’t want to bother you,” and then redeem miles sub-optimally. However, at times it can be a lot of work to make sure that your family and friends are “on track” when it comes to points, and over the years I’ve also realized that I need to be proactive in making sure they’re doing the right things.

One of the biggest challenges in helping my parents maximize points is finding that happy middle ground between maximizing points on every purchase while keeping the strategy simple. I have no problem using a dozen different cards to maximize my spend in every category, but I also recognize that for others there’s value in a simple strategy.

This morning I was talking to my dad about his current credit cards, and was surprised by how few cards he had. I also helped him look up his credit score and credit history, and was shocked when I saw the below, as he hasn’t applied for a credit card in nearly three years!

How could I let this happen?!

With that in mind, my task right now is to help him fix his current credit card situation, since that just seems unacceptable.

My dad’s current credit cards

Which credit cards does he have right now?

His current strategy for spend is as follows:

It’s not a terrible strategy, though I’d say he has lots of potential to optimize his points earning, especially as he hasn’t applied for any cards in over two years.

How I plan on improving my dad’s credit card portfolio

I think it makes sense to take a slow and steady approach here. Here’s what I’m thinking:

Get the Ink Business Preferred Card

My dad owns a small business, and his first priority should be getting The Ink Business Preferred℠ Credit Card, which is one of the best business cards in the market. Getting this card is a no brainer, as it has a welcome bonus of 80,000 Ultimate Rewards points upon completing minimum spend (which I value at $1,360), making it the best welcome bonus offered by any card.

On top of that, the card offers all kinds of great perks, including triple points on travel, shipping purchases, internet, cable, phone services, and advertising purchases made with social media sites and search engines, for up to $150,000 of combined purchases per year.

He’d get a huge amount of value out of the card.

Get him the perfect Chase trifecta

My dad already has the Chase Sapphire Preferred® Card and Chase Freedom® Card, which are fantastic cards. However, I’d like to also get him the Chase Freedom Unlimited® and the Chase Sapphire Reserve® (in lieu of the Sapphire Preferred). What’s the best way of going about that?

This is a great trifecta because you end up only paying an annual fee on a single card, but you earn triple points on dining and travel, 1.5x points on everyday purchases, and 5x points in rotating quarterly categories.

Other cards he could benefit from

Once he has completed the above (which could take a month or two), I think it makes sense for him to pick up some cards with valuable ongoing perks. For example:

There are many more cards I think he should consider, though I think the above is a good starting point, as I don’t want to overdo things (because that’s how we get into a situation where he doesn’t apply for any cards for nearly three years). 😉

Would you do things differently in my dad’s shoes?

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Comments

  1. Ha, timely post. I’m about to go through a more limited version of this with my in-laws.

    I have a question about the CSP downgrade strategy. Is the following an accurate description of what will happen to your dad’s UR points?

    Upon downgrading the CSP, your dad will not lose any UR points. However, as a holder of only the Freedom and Freedom Unlimited, he will lose the ability to transfer those UR points to travel partners. Once he gets the Ink Business Preferred or the CSR, he will regain the ability to transfer his UR points to travel partners.

    The reason I ask is that I have a 4 year old CSP and I would like to apply for the CSR (and get the bonus). Because of Chase’s “only one Sapphire” policy, I would need to downgrade the CSP before applying for the CSR. I just want to cover my bases and make sure that this strategy preserves my existing UR balance (even though I won’t have the partner transfer ability in the interstitial period).

    Thanks!

  2. Don’t forget to make sure someone you know gets the 20K referral points for your dad’s Ink Preferred (I’m assuming you’re maxed out on referrals yourself).

  3. On the Chase Ink Card it says you can transfer points to other frequent flyer accounts. Do you know which airlines you can transfer the points to?

  4. Well only thing I can say is not everyone enjoys juggling multiple credit cards.
    I presume more than half the world just have 1 or 2 cards and that is it. Not everyone thinks credit cards are good thing, granted to us points collectors who are crazy and have 15 cards + its a great thing, but most of my friend think i’m mental and they worry about have 1 credit card.

  5. I’ve learned to let go of making sure my friends and relatives have the “right” credit card(s). People value different rewards and having a varying tolerance for complication in a credit card strategy.

    My mom likes to use one credit card for everything. When I looked at what she was spending on and how she likes to use points (Southwest), I *recommended* the CSR. My parents decided to get it, and she loves it. My job is done. At the end of the day, not my business (and I really don’t care) to look at their credit reports, their spending, and refer 10 cards to them.

    Same with my sisters. One likes to have all her credit cards and banking with one institution. Also likes cash back, so she picked up her bank’s cash back card and uses it for everything. Happy and loves the simplicity, and no annual fees to worry about. The other wanted hotel rewards, so she uses the Marriott rewards card. She’s been able to save a lot of money on last minute trips with those points.

    So, not sure the need to stress out about your friends’ or relatives’ credit cards. Unless of course you wanted another chance to drop several referral links in a post. 😉

  6. @Ben L. – That is correct; I did it two weeks ago. But you need to make sure the card closes completely before applying. The rep told me to wait 3 days but I waited a week before applying for the Reserved card. And I was told I could call back in and upgrade to the Preferred card if for some reason I was not approved [but thankfully, I did not have to do so].

  7. Can you imagine being faithful to just one person all your life?

    That is not natural. In fact it goes against evolutionary instincts. Even the most scientifically astute people seem to fall for this religious mumbo jumbo.

    And you are talking about credit cards.

  8. My (very successful) dentist moves $250,000 per month in purchases with his practice and puts it all on one airline credit card and redeems premium cabin award flights at “Anytime” rates. He is not interested in diversification even though I try to convince him otherwise at every appointment.

    My older relatives are only interested in their cash back cards.

  9. Ben, can you please advise what website you used to list the length of the credit cards held? I’ve pulled my bureaus in the past, but I do not remember ever seeing such a nicely summarized list.

  10. What about the additional annual fees? Will you cancel cards other than the downgrade of the CSP?

  11. @ AOH — In all cases I think the additional benefits more than offset the increase in annual fees, especially when you consider that the real “out of pocket” on the Sapphire Reserve is potentially only $150 per year, when you factor in the $300 travel credit.

  12. Great article! A more accurate headline probably would have been:

    “I’m running out of ways to pitch my Credit Card Referrals!”

    but all the same good information. I’m going to send this over to my parents.

  13. @Lucky– Thank you. I just started collecting miles & applying for cards back in August, but deciding on which cards to keep and justifying the fees is becoming a bit difficult. I have the SPG card for example and don’t know if it’s worth keeping for $100/year. So if I add new cards, I’m thinking maybe I should get rid of some of the older cards (those with annual fees) whose bonuses I’ve already received. Do you think this is good strategy?

  14. FYI
    For some reason I’ve been getting these redirect spam addresses a few seconds after your articles load. I click though via Twitter. It’s been happening for about 10 days now.

  15. unless your dad buys a lot of facebook ads, wouldn’t he be better off with the ink cash if he is getting the CSR?

  16. 29 Years ?? It should be 29 months – MAX. Why not go for the big upfront jolt of 50-100,000 points/miles and then move on? It takes a long time to spend $50,000 when you can achieve it easy for a $95 fee … and collect points, miles, rebates on top of it!

  17. Don’t feel Bad I just point to the websites and say Go for It ..They change their minds or the cards CHANGE u really have to stay on top of this.
    It really is a Fun Game Burning the Banks.

    CHEERs

  18. Touch of hyperbole Lucky. Of course, we all want to help our parents, and of course we only wish the best for them. However, if he is happy with the rewards he gets, thats all that matters. Dont beat yourself up about it

  19. Lucky, I want to do what you want to do for you dad in regards to the Chase Sapphire Reserve card but I was going to cancel my Sapphire Premier card after transferring the points to my Ink card. Is there any downside to doing that? I don’t think I really need the Freedom Unlimited card and I was worried about having enough credit limit to get another credit card with Chase. Is it easier to get approved for the Reserve card by keeping and downgrading the Sapphire Premier?

  20. Will it be a great miss for his credit report if cancel CSP and get a CFU with 15000 bonus UR points instead of downgrading?

  21. I think that this is an advertisement for the credit cards you mentioned more than anything else, which is really annoying.

    I would have approached the situation differently. It depends as a family unit (e.g. your parents and you) how you plan to spend the points and with which providers. While keeping in mind what others said that many people not not want to juggle too many cards, I would have suggested a different route in no particular order.

    First – Chase Reserve card. This earns 3x points per dollar on travel and dining and importantly earns a 50% bonus when redeeming. The travel credit counterbalances most of the annual fee. It also provides a Priority Pass card among other benefits.

    Second – Amex Platinum. I would only use this card for the travel credit that it earns and the fact that it earns 5x points per dollar on airfare direct with the airline. The reason this is important is because of the amount of travel that you do, it could cash in well. Also, if you check the providers that Amex partners with, you can usually get a 1:1 ratio when transferring. This is important because of how Amex charges a high number of points and a service fee to redeem with them and some of the transfer partnerships charge a fee.

    Third – SPG Amex. The reason I would suggest this is because of all of the one point charges from the other cards should go on to the SPG Amex. This would give you a 1:3 ratio when converted to Marriott, which is a good deal. Furthermore, due to this partnership there are many more options in the SPG/Marriott group than other hotel groups.

    You may decide to have other cards on your own or because the benefits outweigh the drawbacks, such as the IHG card because you can easily have the hotel stay more than equal the annual fee, but these would be only necessary for those that travel a lot and if you are trying to not have too many cards to use then it’s not important.

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