Questions and Answers

I was wondering if you could help me with my plan a little. I am wanting to get a credit card with one simple goal of trying to get a couple of first class plane tickets for my wife and I every 5 years on our anniversary. I have a Citi card we have used over the last 10 years, we usually have just used points on local hotels or plane tickets over the years but I still currently have 100000 points on it. I was thinking of waiting until the premiere card returns with a point bonus and signing up for it and then use that card only for the next 4 years. I figure that should get me to the 4-500000 point range in the next 4 years. I was then going to look to exchange them for loyalty points and possibly a couple of first class tickets. I’m not real picky of airline or even destination. Being honest just somewhere international probably from DFW. I know most people like the Chase Sapphire card. I just didn’t know if it would benefit making the jump to that card although I would lose using my 100000 TY points. I know Chase has their new card, my credit score is over 800 so I could qualify. I just know that I’m not going to want to pay the 450 annual fee. Any direction you have would be helpful. No hurry on response. I have time, just trying to be proactive. Thanks for your input. I appreciate it.

Jake–welcome. What are your usual expenses? Both cards (the Sapphire and Premier) that you have identified are strong earners for travel and dining expenses. If you are going to accumulate miles via everyday spend, it will be important to identify and maximize your bonus categories.

Also with regards to the new CSR, yes the AF is 450 but you also get $300 in travel credits every year. If you are able to get these at least for the first year you will come out ahead by $150 plus the 100,000 sign up bonus. After the first year, the card is $150 AF card assuming you keep using the benefit. If that is too much you can always downgrade to the CSP (same price as Premier) or either of the Freedoms.

[QUOTE=”Gaurav, post: 20137, member: 79″]Jake–welcome. What are your usual expenses? Both cards (the Sapphire and Premier) that you have identified are strong earners for travel and dining expenses. If you are going to accumulate miles via everyday spend, it will be important to identify and maximize your bonus categories.

Also with regards to the new CSR, yes the AF is 450 but you also get $300 in travel credits every year. If you are able to get these at least for the first year you will come out ahead by $150 plus the 100,000 sign up bonus. After the first year, the card is $150 AF card assuming you keep using the benefit. If that is too much you can always downgrade to the CSP (same price as Premier) or either of the Freedoms.[/QUOTE]
Thanks for the response. This will be normal everyday spending. If I was planning this trip in the next 12-18 months the 300 dollar travel perks may be nice. My international travel right now will probably only happen about every 5 years, with three young kids I just don’t have time or resources to do it more frequently. Most travel is family road trips to the mountains. Do you think staying the course with the Citi card would be OK since I have already accrued some reward points?

It should be fine in that you’ll continue to accrue points but again, the cards you are using maximize returns on travel. If that is not a significant portion of your expenses you should be trying to maximize those. For example there are cards that will allow you to maximize groceries, cards like the Ink that allow you to buy gift cards at office supply stores at 5x, cards that are great for gas etc. Just like interest, over time the effects can be magnified. So for example. the AmEx Everyday preferred offers 4.5 points on groceries if you meet requirements. With unbonused spending over five years and assuming you are spending say $6K a year on groceries (choosing this since it is the cap for the EDP) you would earn 30k TYP or UR but 135,000 MR points. Of course you want to be strategic and not fragment your points too much but it is important to pay attention to spend categories to maximize your returns.

[QUOTE=”Gaurav, post: 20162, member: 79″]It should be fine in that you’ll continue to accrue points but again, the cards you are using maximize returns on travel. If that is not a significant portion of your expenses you should be trying to maximize those. For example there are cards that will allow you to maximize groceries, cards like the Ink that allow you to buy gift cards at office supply stores at 5x, cards that are great for gas etc. Just like interest, over time the effects can be magnified. So for example. the AmEx Everyday preferred offers 4.5 points on groceries if you meet requirements. With unbonused spending over five years and assuming you are spending say $6K a year on groceries (choosing this since it is the cap for the EDP) you would earn 30k TYP or UR but 135,000 MR points. Of course you want to be strategic and not fragment your points too much but it is important to pay attention to spend categories to maximize your returns.[/QUOTE]
Thanks for taking time to talk this through with me. I did look at the AMEX everyday preferred and it is interesting in that you also get 50 percent bonus points if you do 30 or more purchases a month on the card (I would meet that). Over a course of 4 years it appears these would add up quicker than a Citi or Chase card. They also have a lot of the same loyalty programs available to transfer points to for air travel. Am I thinking that through correctly? I am just looking to maximize reward over the next few years and then about 12-18 months prior to when we decide to book a trip maybe getting a card that would even more so maximize air travel and also maybe each getting the Hyatt Chase card to earn 2 free nights a piece. The goal would be to get 2 free business or first class tickets and possibly have most of the nights paid for in a hotel. Your help and input is greatly appreciated.

When your spending horizon is five years, even average spending will add up to a sizeable balance. The key point is analyze where most of your spending is going and then to choose cards that maximize your returns, preferably in the form of a flexible transferable currency.