Travel Credit Cards - Maximizing Regular Spend

Chapter 1 - Three Types of Travel Credit Cards
Chapter 2 - Credit Card Churn Example
Chapter 3 - Credit Score FAQ
Chapter 4 - Tracking Your Points/Miles
Chapter 5 - Meeting Minimum Spend Requirements
Chapter 6 - Maximizing Regular Spend

So far, I've explained how to think about which travel cards to get, how to apply for a few at a time, how to reach your minimum spends to earn your big sign -up bonuses.

Now you have a few tens of thousand of miles and points sitting in your multiple accounts, and you're able to keep track of the balances by using AwardWallet. But obviously, you're going to continue spending money for basic living expenses as well as the occasional splurge when your budget allows for it.

One wasteful simple approach would be to just pick the one credit card that's affiliated with the loyalty program that you want to accrue the points/miles for. For example, my father LOVES the Starwood Hotels SPG program and would use just his SPG Amex for all spending if all else were equal.

But with travel credit cards, as in life, all else is not equal. As you may recall, certain cards give certain bonuses based on where you're spending. Not every merchant category is a bonus category, but most of your usual spending will/can be covered, if you use a little strategy. But because I know that not every LapChild is as neurotic OCD methodical, I'll break it down into best strategies for your individual personality type.

Type 1 - Lazy

Are you the type who likes to "let the dishes soak" for a while in the sink? Do you find that your local pizza delivery place is often in your Recent Calls list? Do you have a hard time remembering to check LapChild Diaries every morning without being prompted by a Facebook post? Well, then this strategy is probably for you!

Basically, you're going to use only 1 credit card. It's just a matter of which card you should pick based on your individual spending habits.

Figure out what you spend most of your money on every year. Chances are, if you're like my parents, most of your spending falls into food. In that case, you should pick a primary credit card that gives you bonus points/miles (2x points or more per dollar spent) for either restaurants or grocery spend. You'll also use this single credit card for everything else (and earn 1 point per dollar spent).

• For example, if you're a foodie who spends more time on Opentable.com than Recipes.com, then I'd go for a card like Citi Forward (5x Citi Thank You points on restaurants) or the Chase Sapphire Preferred (2x Chase Ultimate Reward points on restaurants).
• If you spend more time at Whole Foods and Trader Joe's however, then perhaps a card with extra points for groceries makes more sense for you such as Amex Hilton card (6x Hilton HHonors points on groceries, gas, cell phone) or Amex Premier Rewards Gold card (2x Amex Membership Reward points on groceries and gas; 3x on airfare).

Type 2 - Willing and Able
Maybe you're a bit more engaged than most lazy folks but not quite 100% all-in. Maybe you'll iron your dress shirts but decide that t-shirts could have creases. Perhaps you go to the gym 2x a week, but refuse to do the rubber band exercises to sculpt those weird side abdominal muscles. Possibly you're the type to let your father read you a book but don't want to sit through all 5 pages. Maybe you enjoy Thai food, but haven't ordered anything other than pad thai.

If this sounds like you, then you should have 2-4 different cards in your wallet to use when they're appropriate.  You have 1 card for taxi rides, another for buying groceries, and yet another when you pay for a hotel room when your significant other kicks you out for being so points/miles obsessed.

This strategy is more like using a Swiss army knife. A different tool for different needs. By following this strategy, you're rarely missing opportunities to get at least double miles/points for almost all your regular monthly spending. This also means you're spreading out your point balances across multiple programs, but you're getting to your goals at least twice as fast (or by spending half as much as normal).

Here's how my parents used to roll:

• Groceries and drugstore - Citi Thank You Preferred (5x for first 12 months)
• Restaurants - Chase Freedom (5.5x for April-June)
• Travel/Transportation - Chase Sapphire Preferred (2.14x)
• General Retail Shopping - SPG Amex (1x)
• Charity - AA Amex (1x)

Type 3 - Crazy

Are you the type who got really excited when you find a new $0.25 coupon for toothpaste? Do you happily jump out of bed 3 minutes before your alarm goes off? Do you find yourself eating strange ethnic foods you can't pronounce? Well, then, you're in luck, because there's a credit card strategy for you too.

Somewhere along the line, my father got more and more sucked into this world of points and miles. When he's not preaching to his friends over dinner or trying to sign me up for additional credit cards (yes, at 18 months old), he's reading about new schemes to further optimize his regular spending. Frankly, I think he needs serious help, but I do like the extra space we get from a free hotel room upgrade now and then.

This is where Gift Cards and Manufactured Spend come in. After reading countless blogs that teach you such tricks, my father now has 2 key credit cards that let him play at this extra crazy level - the Chase Ink Bold (business) card and the Citi Thank You Preferred (personal) card. These two credit cards get you 5x points at office supply stores and drugstores, respectively.

5 points per dollar is a lot (valued at about a 5-10% discount), but how much copy paper and ballpoint pens can anyone really use from Staples or Office Depot? Not much really, but in addition to buying ink toner and vanilla folders, you can also buy Gift Cards for other retailers and chain restaurants like Best Buy, Amazon, Gap, Macy's, etc.

So now, when my mother needs to go to Old Navy for my summer outfits, my father makes her stop at Staples first so they can buy a $25 Old Navy gift card (earning 5x Chase UR points using the Ink Bold credit card) instead of just 1x SPG points if she went straight to Old Navy and used her regular Starwood Amex. This trick was discussed in the prior post about hitting minimum spend requirements, but that was for accelerating future spending you were going to do anyway months later. This time, we're doing this strategy to maximizing the points earned for current spending.

Similarly, the thousands of CVS and Duane Reade drugstores all over Manhattan also sell a variety of retailer gift cards. But my parents prefer Chase UR points over Citi Thank You points because they can be transferred to their beloved United Airlines and Hyatt Hotels so they generally go to Staples instead of CVS.

However, CVS has something that Staples doesn't. At the drugstore, they can also buy prepaid Visa cards for up to $500 each for a fixed $4.95 activation fee using a credit card. So for $504.95, they get a $500 prepaid Visa card and 2,525 Citi Thank You points (worth $25.25 if redeemed for cash or $33.58 if redeemed for travel purchases). At this point, my father only really "spent" $4.95 for the activation fee. Last I checked, $25 value > $5 cost.

Then my parents use the $500 prepaid Visa card to make purchases that they would otherwise only get 1x from (pediatrician co-pays, charitable donations, dry cleaners, hair salons, etc). Now, they don't get any points for actually using the prepaid gift card, but they've already received 5x from buying the gift card.

Again, to do this specific "trick" you'll need to apply for the Chase Ink business credit card and/or the old version of the Citi Thank You Preferred card. But make sure it's the right version of the Citi Thank You Preferred, because the normal version only gives you 1x on all spending.