I’m visiting my parents in Florida this weekend and nearly had a heart attack at dinner last night.
I’ve explained my credit card spend strategy in the past. It might seem complex to an outsider, though to me it’s quite easy. And that’s probably because I eat, sleep, and drink miles & points.
So I instinctively know subtleties, like that I should use The Platinum Card® from American Express for airfare purchased directly with an airline, while I use the Citi Premier® Card (review) for airfare purchased through an online travel agency, for example. I get that’s something most people wouldn’t understand, but then again, we’re not most people.
Fast forward to dinner last night. My dad insisted on paying, but when the check arrived he took out the Chase Freedom FlexSM.
“Dad, what are you doing??”
“I thought I was supposed to use this card for dining purchases?”
“No, that was last quarter, when they were offering 5x points at restaurants. Oh boy… so which credit card are you using for all your other purchases?”
He pulls out The Platinum Card® from American Express.
“That’s not the card you’re supposed to use for everyday spend!”
“I thought you said I was supposed to use the American Express?”
“Yes, but not that American Express. You should be using the Amex EveryDay® Preferred Credit Card.”
That’s sort of the point at which I realized I had overcomplicated my parents’ credit card “system.” I was so focused on them maximizing spend in every category that they just got everything mixed up, which is my fault.
Here’s the approach I’ve convinced them to take:
- Use the Chase Sapphire Preferred® Card for all dining and travel purchases including parking, as they’ll earn 3x on dining and 2x on travel.
- Use the Amex EveryDay® Preferred Credit Card for everything else. They’ll earn 3x points at US supermarkets (on up to $6,000 of spend per year), 2x points at US gas stations, and 1x point per dollar spent on everything else. They’ll also get a 50% bonus when they make at least 30 purchases per billing cycle (which they’ll do), meaning in reality they’ll be earning:
- 4.5x points at supermarkets
- 3x points at gas stations
- 1.5x points on everything else
Do the above two cards mean they’ll 100% maximize their return on every dollar they spend? Nope, but it’s pretty close, and I’d say it’s a great “compromise” between keeping things simple and making sure they’re maximizing their return.
I value Membership Rewards points at 1.8 cents each, so even on everyday spend they’ll be achieving a return of 2.7%, by my valuation.
While I can maximize my own credit card spend in my sleep, it’s a bit more challenging to make sure my family & friends are maximizing their points. And I guess I’ve come to realize that the simpler the strategy the better, even if it means sometimes forgoing points at the margins.
Based on my parents’ spend profile I’m almost wondering if I should just have them use the Amex EveryDay® Preferred Credit Card for everything. They’d be giving up 0.5 points per dollar spent on travel and 1.5 points by not using the Chase Sapphire Preferred® Card, but at least I’d know they wouldn’t end up using the wrong cards altogether!
What approach do you take to ensuring that your friends & family are using the right credit cards to maximize their spend?