One of the things that Mrs. Money and I love to do is to travel. We love exploring new cities, relaxing at the beach or hitting the slopes in the winter on some snow. We also love to not pay for this travel whenever possible and we have found that reward credit cards are a great way to help with this. In fact we just booked a flight to Italy for next summer – on Emirates business class and it was all on points! I have from time to time felt like things got a bit out of hand with credit cards – like the time I was paying nearly $1,000 in annual fees and not travelling that much but feel like post-COVID I’ve reigned it in a bit more and now that we’re able to travel more often (lol except everything is so expensive now)!

Once a year or so I like to do a post “what’s in my wallet” to give you a sense of my credit card strategies and also for me to reflect to make sure I’m following the right strategy! In this post I’ll cover my current credit card strategy and how I’m trying to maximize my points!

Disclaimer

Credit card rewards are awesome, I love the perks and the trips we’re able to take but I will say that this can be a dangerous game. Credit cards in general are a way for banks to lend you money, and if you don’t pay that money back in a timely manner (approx. one month), you’ll be charged interest. This interest can vary from a few percentage points to above 20% interest. That can be a LOT of money you’re paying for the right to borrow that money. So, my disclaimer here is that credit cards are a powerful financial tool and with great power comes great responsibility. If you end up carrying a balance on your credit card and are paying interest, you’ve effectively lost the game and any free trip/flight/cash back you’ve earned is negated by that interest. So, if you continue reading I’m going to assume you’ve raised your right hand and promised to follow responsible credit card usage.

My Strategy Journey

*So I realize as I type about my reward credit card strategy that it sounds kind of silly and very much a first world problem. I realize this is my privilege to be in a financial situation where I can pause to reflect on which credit card I’m going to use so I can get a free fancy flight somewhere cool. I just wanted to call that out!

I’ve been in the credit card game for over a decade now starting with the Capital One Venture card in 2012. I was intrigued by ‘double miles’ and signed up! From there it’s been more cards, more research, more bills to juggle and things to keep up with!

For the first few years of playing the credit card game, I was a one card kind of a guy. I figured the best way to maximize my points was to focus on one card and put as much of the spending as I could. I watched other friends diversify and have a bunch of cards and a bunch of different use cases for them; i.e. ok for gas I use this card because I get 3x, for restaurants I use this card because I get 4x, and for everything else I use this other card. That felt to me like a good way to have a bunch of small piles of points in a bunch of different places and when it came time to redeem for a trip, I worried my piles wouldn’t be enough. So, I basically put 98% of my credit card spending on my Venture card. I would earn Capital One miles (which were actually just points) at a great rate (2x on everything) and have plenty of points to credit a travel expense. It was great because when it came time to redeem, I’d just buy the flight/hotel/car as normal and then use my points as a statement on my account. Erased!

This worked great and we took some good trips (Belize, USVI) but then I started realizing if I wanted to take some fancier flights (i.e. first class!), that Capital One points wouldn’t cut it. What I learned was that first class redemptions in cash are always going to be stupid (err I mean silly, BabyMoneyFinance reminds us that ‘stupid’ is a bad word) expensive like thousands of dollars but on the miles side they were much cheaper. When we went to Europe a few years ago (first class), we used about 80-90K each way in United and then Delta miles. That same flight was at least $2,000 each way and there was no way I’d have enough Capital One points for it.

So, a few years ago I got into the convertible points game via the Chase Sapphire Reserve. This card was the bomb dot com and people lost their minds for it. It had a 100,000 signup bonus, got you lounge access and gave you 3x back on restaurants/travel all for a $450 annual fee of which you got back $300 in travel credits. What a time to be alive! From there I started focusing on those points and my eyes were open to the flexibility. I realized the value in having the ability to move points to one of more than a dozen travel partners. So if there was a deal to be had (there’s always a deal!) I could easily just move the points needed. We just did this with Emirates – 145,000 points round trip to Europe!

Where I’m at now

Now in 2022 (and soon to be 2023) I think my strategy has shifted to be much more focused (which ironically is my word of 2022 so glad to see it’s working!) on travel. We’ve got 2 kids and that comes with a busy schedule, limited times to travel and it’s expensive to do so, so I need to be smart about it. Conversely 2 kids comes with lots of expenses which means lots of credit card points (YMF slightly sheds a tear). So, we’re trying to get a lot better about calling out where we want to go and figuring out a plan to get there. In 2023 we’ve got plans to go to: Panama, USVI, and Italy. Picking your destination starts making things easier in terms of decisions. From there I start researching the best ways to get there. Is it Delta? American? Some local airline? I’ll start looking at prices in points and miles to get a sense of what I’ll need to make it happen. Same with hotels – are hotels there cheap or pricey? Or would AirBnb make more sense? From there I start determining my points strategy, ok I’ll need this many Marriott points, this many United points, this many Delta points etc and from there I start figuring out which cards I need to be spending on!

It’s been working out so far – one thing that I love about our strategy is that the ultimate goal is to go. We love to travel and we commit to making it happen and so far we’ve been able to – even with 2 kids! Although SegundoMoneyFinance is approaching 2 which means we’ll have to start paying for a ticket – no more infant in arms!

TLDR

My advice to you is to start figuring out what you value out of credit cards – is it travel? Is it cash back? Is it quality of travel or quantity of travel? Figure out what you want and then you ca