Wednesday, June 18, 2014

Our Travel Wallet

Over a year ago, my father was kind enough to open up his wallet with my LCD readers. There, he offered an inventory of all the various credit cards he and my mother currently had open (though not all of them were actively used).

Big warning! We are not suggesting that any of you fine upstanding readers follow my crazy parents down this financial rabbit hole. Unlike the popular bloggers, we don't get paid if you sign up for credit cards. 

If you have any outstanding debt at all (student loans, credit card, personal loans or mob gambling debt), then you're better off not opening more credit cards, because you're probably spending more than you're making and ruining your future. The interest charges alone will destroy any point/mile value you may receive. The last thing you need is another credit card.

Recall, there are 3 different types of reward credit cards.

A. One Night Stands (for the sign up bonus)
B. Booty Call (ongoing benefits)
C. Marriage (bonus spending)

Despite having 33 open credit cards from 7 different banks, we only regularly use 8 of them each month (Booty Call). And of those 8, we primarily use just 4 of them (Marriage). The remaining (One Night Stand) cards sit quietly in a zip lock bag hidden somewhere where my toddler hands can't get to them.

Which three cards does my father keep in his excessively slim wallet? Well, I'm glad you asked...

1. Amex Blue - earns 5% cash back on all spend at gas, grocery and drugstores.
2. Citi Thank You Premier - earns 3x on all restaurant spend
3. Amex Starwood - earns 1x on all regular spend and 2x on Starwood Hotel spend (our personal favorite)
4. Chase Ink Bold - earns 5x on internet, cable, cell phone and office supply stores and 2x on hotels and gas

The above lineup is his regular "starting rotation" when he's in the United States.

Sidenote: I tried to find a photo with the 2014 Yankees starting rotation, but there weren't any magazine covers including David Phelps, Chase Whitley, Vidal Nuno with the regular starters Hiroki Kuroda and Masahiro Tanaka.

I qualify that this is his US wallet because a few of these cards aren't as rewarding when you step outside America. The two American Express cards charge an additional Foreign Exchange (FX) fee of 2.7% when used abroad. Since my father hates sub-optimal outcomes within his direct control, he sits those cards on the bench whenever he grabs his passport.

So on this current trip to Israel (via Switzerland), we had to re-shuffle the deck a bit. Kind of like when the Yankees are in the playoffs and are facing a dominantly left-handed batting lineup.

Both the Citi Thank You Premier and Chase Ink Bold were created for travelers so they don't have FX fees. Since we do plan to eat while traveling, we were definitely keeping the Thank You card. However, we use the Ink Bold card primarily for utilities at home and small businesses expenses at Staples, so we left that card at home as well since our monthly cable/internet bill is set on auto-pay anyway.

So out of the 4 card slots, we had 3 open.

First, we needed an ATM card to access cash. So we took our Charles Schwab ATM card which as I mentioned before does not charge any ATM fees worldwide. We've found getting cash from a reputable foreign bank's ATM is the best exchange rate.

Second, we needed a FX fee-free Mastercard to pair with our Citi Thank You (Visa). Fortunately back in March, my father applied for the Barclays Arrival+ World Mastercard which offers a very interesting rewards program where you basically get 2.2% back in the form of travel spend credits.

Every charge you make earns you 2 Arrival miles which can be used to redeem against travel expenditures at $0.01 per mile. But then you also get 10% back. The Arrival miles program is exceptionally easy to use and travel redemption can be put on charges we just made, even though the monthly statement hasn't closed.

In fact, this week we used 5,000 Arrival miles to remove $50 from the Zurich taxi charge from last week and then instantly received 500 Arrival miles back (10% rebate). My father really underestimated this card, but the Arrival+ could be our Masahiro Tanaka - a new surprise addition that is really paying off!

Third, we had a utility slot available. No specific needs on this final card, so we went back and told our veteran workhorse American Express Starwood card that we changed our mind. While we wouldn't use this card at any foreign locations, invariably, there are times when my parents need to make an online charge based in the United States (daycare, medical bills, shopping, etc). Since those transactions would be processed in America using US dollars, the 2.7% FX fees wouldn't come into play at all.

So there you have it, the starting international rotation:

1. Citi Thank You Premier Visa - for all restaurant spend or where only Visa is accepted
2. Barclays Arrival+ Mastercard - for all other international spend or where only MC is accepted
3. Schwab ATM card - for cash withdrawls in local currencies
4. Amex Starwood card - for any US-based transactions that we need to make while abroad

Now, if only my father would agree me to add this adorable little kitten to my rotation.

1 comment:

  1. Great post! Thank you. I didn't know that Charles Schwab doesn't charge ATM fees worldwide, good to know. With 33 credit cards, how many years/months did it take you to open this many cards? For a beginner starting to earn mileage, how many cards would you recommend applying per time? Like two different cards at 2 different company per time or one at a time with a few months in between? How about authorized user and spouse account? If my husband open one card, do/can I become authorized user and can I open the same card in a few month also (for sign up bonus)? How long did you wait to apply for each cards from the same bank in between (33 cards from 7 banks)? Did they ever ask you why opening so many cards from the same bank and what would be the wise answer to that lol?
    So when you are in the US, you use Amex Blue, Citi Thank you premier, Amerx Starwood, Chase Ink Bold. When you go to overseas, you carry Charles Schwab, Barclay Arrival and Amex Express Starwood (did I get it right)?
    When I researched cards, the first thing people recommend is Chase Sapphire Preferred. Do you not use that card anymore (assuming you have one)?
    Is Chase Ink Bold better than Chase Sapphire Preferred?
    Thank you for your time sharing all of these. Of all the blogs I've been so far, your blog is very concise and well-directed.