I’m a huge fan of reward credit cards and am way more often than I should am thinking about ways to maximize my usage of them to do what I love – traveling for free. I’ve done a couple of posts on this in the past – How I earn $900 annually with reward credit cards, What’s in my wallet, and How I spent 1 million points for a European dream vacation. I’ve done well in the credit card points game so far!

Between Mrs. Money and I, we have 9 reward credit cards carrying an annual fee of $1,306. LOL, I wish I hadn’t done the math there! But, I always say to focus on the value you get and as long as that value exceeds the cost then you’re getting a good deal. Mrs. Money and I (ok mostly me lol) at least twice a year evaluate our credit cards to make sure we’re still benefiting from them more than we’re paying in annual fees. I also monthly track our points (I love spreadsheets) and set goals for ourselves and make plans to meet those goals.

As this is a new year and we’ve exhausted a lot of our points (refer back to how we spent 1 million points) and having kiddos that are of the age where they require a ticket, we are thinking and exploring new credit cards for us to get. I thought it could be cool for me to walk through my thought process here to show how we think about new cards!

Do not go into debt and do not screw up your credit score

The cardinal rule of winning with reward credit cards is to not go into debt by using them. Reward credit cards often carry high interest fees – like 15-25% and that is a quick way to get into financial trouble if you carry a balance on them. 

A lot of young professionals will worry about their credit score and if/how a new credit card could affect it. My thinking is that as long as you’re not trying to get a loan (car / house etc) in the next few months then opening a new card won’t hurt – in fact in the long run it might help as more credit to your name typically helps your credit score. The reason I say not to open one if you are i.e. applying for a mortgage it’s because typically mortgage lenders don’t like seeing new lines of credit before/during or shortly thereafter the process. 

I personally with my 6 credit cards have a credit score of just under 800. I haven’t closed an account in a few years mostly because I still find value in them all but if I did I’ve been told your credit might take a little hit but not by too much assuming you still maintain good credit practices (i.e. paying it off in time). 

Assuming we’re good with that we can continue on to the next point!

First set goals then figure out what tools you need for the goals

I’ve always told people when they ask about credit cards is that I really don’t care how many points or how many point currencies I have in my name. I’m not impressed when people tell me they have “1 million Skymiles” or anything like that. I’ve found that hotel and airlines typically devalue points in the long term – i.e. for that Emirates business class flight we took to Europe they nearly doubled the miles required a few months after we had booked it. I much more prefer to save for trips that I need and then spend them and I don’t like hoarding points/miles for the sake of having a lot. 

For me it’s important to define your goals – i.e. where you want to go and what you want to do. The world is a big place and I personally am anxious to get out and explore it! I like to start setting goals for where we want to go and what type of a trip it’ll be. For our big Europe 2023 trip we probably started planning 1.5 years in advance. I started looking up how many miles I would need for Emirates and started making moves to accumulate those miles. 

For us we’re looking to go to the west coast in fall of 2024 and the Caribbean in 2025 (yes we’re already planning that far out). For the west coast trip we’ll need Skymiles to fly on Delta. I’ve come to the sad realization that we’re not going to be able to do first class and it’s just more miles than we can accumulate in time, even with new cards. For the Caribbean we’ll probably fly Southwest and stay at a Marriott. I’ve started to lightly look into how many points we’ll need for those stays and have a target in mind!

Now that we’ve identified what we need points for we can start making plans for how to get there. For us we’re going to put a lot of spend on my Delta Amex (shameless referral link but hey we both win here) to a) get me Skymiles and b) once I spend $10,000 I’ll get a $200 flight credit. Mrs. Money will keep using her Amex Gold as those points transfer to Delta. Once we’ve booked that trip I plan to shift spend onto my Chase Sapphire card (another shameless referral plug) as the points accumulation is better than my Southwest card and Chase points move 1:1 to Southwest. 

Now there’s still a bit of a gap which is why we will get creative!

Get creative and evaluate well 

As we’ve identified, we’ve got a bit of a shortfall in our points plan to hit our goals, hence why we’re looking into some new credit cards. I personally have 6 and feel like that’s enough for me right now, so we’re more so looking into cards for Mrs. Money. Mrs. Money has received an upgrade offer from her Amex Gold to the Amex Platinum with a bonus offer of 100,000 Amex points. That was SUPER tempting for us but the extra annual fee ($695 from $250) was just too much for us to bite off on. I personally have the Amex Platinum and having two of the same cards with all those benefits seemed redundant and not as valuable.

We are exploring getting Mrs. Money a Southwest credit card as we’ll need to buy a few tickets to the Caribbean and although I have a nice chunk of Southwest points we don’t quite have enough for the 4 we’ll need to buy. We’re holding off till the spring to see if Chase releases what feels like a fairly frequent promotion whereby you can earn a companion pass if you get a Chase Southwest card. That would be huge as the companion pass is a BOGO to anywhere Southwest flies. 

It’s also important to remember that it’s possible to upgrade/downgrade within certain credit card families. This is nice because it doesn’t technically open a new line of credit or force you to close one out and re-open a new one and therefore affects your credit score less. For example the Delta Amex family has 4 cards – the free Blue, the $150 Gold, the $350 Platinum and the $650 Reserve. Mrs. Money had the Platinum for a few years but downgraded during early COVID to the free blue card. However now it feels like it could be worth it again – especially with the companion ticket. What’s nice is she can upgrade (or downgrade) at anytime, and right now she has an offer to upgrade. We thought about the Delta Reserve to get her Skyclub access and get us a first class companion ticket (Delta is just a one time use unlike Southwest) but have landed on either the Gold or the Platinum card. She can get a 10,000 Skymiles upgrade bonus to that card.

One other thing to consider is adding someone as an additional card member to your card. For example I can add Mrs. Money as an authorized user to my Amex Platinum. The fee is $189/year and she gets lounge access. All spend converts to points in my account, so not a separate card. I could also get a 10,000 Amex point bonus for adding her. The $350 + $189 < $650 for the Delta reserve and feels like a better value for us (i.e. still getting lounge access and companion pass). 

So for us I think this year we’ll upgrade Mrs. Money to the Delta Gold or Platinum. Those 5,000 or 10,000 Skymiles will help us get to the west coast and having a companion pass next year will be nice (you have to wait a year before you get it). Then we’ll get her a Chase Southwest card and the signup bonus plus hopefully the companion pass will help us get to the Caribbean! 

Summary

There are always lots of moves that can be made with reward credit cards! Opening new ones, upgrading/downgrading, authorized users, and I haven’t even gotten into Business Credit Cards which is a whole other level that I’ve not arrived at yet! Figure out your goals and then align your credit card strategy to meet those goals!