Kedrick: 2 - Min-Maxing Your Hard-Earned US Dollars

Hello everyone! As mentioned in my last post, I've been tossing around a few different blog ideas. This week, with my long-awaited sophomore article quickly approaching, I underwent the difficult process of actually choosing one of those topics to expand on. With my film rolls from California developed and ready to share, I played around with the idea of a photography blog. But, for whatever reason, I couldn't settle on one.

That is until I updated the budget file (nice, another blog post idea) that I maintain to track the income and expenses for me and my beautiful wife. While rifling through our credit card line items, I noticed a couple of interesting items. The first was a $50 hotel credit from Chase and the second was a whopping $300 travel credit from Chase. After my initial thought of "nice, free money" passed, I googled these descriptions to see why they actually appeared. I discovered that I had forgotten about a couple of bonuses provided by our new credit card, the Chase Sapphire Preferred card. The $50 is a credit we get annually and the $300 was a signup bonus past the initial one that caught our attention (60,000 Chase Travel points). "EUREKA!!" I thought. Credit card bonuses!!

Traveling before we had a good credit card and still having fun!

Making the Most of Your Expenses

This is a subject I'm both passionate and (increasingly) knowledgeable about. Whether it's tilting about people who prefer to pay for things with cash, thereby leaving thousands of dollars in free money on the table, tilting about people who pull out their cool Venmo credit card, or tilting when I found out my Southwest card kind of sucks past the initial SUB (signup bonus, just learned that lingo when researching for this article), I am typically in awe of how much power these card companies give the consumer in order to coax them into helping scrape ~2% off every transaction in the modern world. Therefore, the remainder of this article will be dedicated to explaining the benefits of choosing the correct credit card and equipping you, the reader, with the tools you need to make this choice for yourself.

Pretty sure I used my Discover card for these tickets

Let's start with the mistakes I've made in this realm. Mir boys will be quite familiar with the first one: using my Discover It Cash Back card for far too long. While this is a great starter card that lets you earn money and build credit with your brain off, the benefits really end there (As an aside, this is not discounting what our father did for us. Building credit as soon as you are able is both important and extremely helpful). The Discover It card has no annual fee and offers 1% cash back on every purchase and 5% cash back on up to $1,500 in purchases for categories that rotate quarterly. That 5% can be amazing when the category is good, like grocery stores or restaurants, but kind of sucks when it's things like gas stations. You're not going to spend more than a few hundred dollars on gas per quarter. The second mistake was mentioned above, signing up for a cheap Southwest card for the points earned from signing up. The points were awesome and worth a fair amount of money, but now I'm stuck holding the bag with a $69 annual fee when I really don't use the card all that much because of its so-so-point earnings. In hindsight, I should've opted for the more expensive Southwest card since the incremental benefits outweigh the annual price. We live and learn!

My "Eureka" Moment

Now for the success story. I am absolutely in awe of both the signup and ongoing benefits offered by the Chase Sapphire Preferred card. Lizzie and I signed up for this card last November at the suggestion of her coworker, who raved about both the signup bonus and point-earning potential. As huge fans of traveling, a card based around incentivizing travel spend was the ideal choice for us. The signup bonus is 60,000 Chase Travel points, which equates to roughly $1,200 to spend on flights, hotels, and rental cars. These points can be transferred at a 1:1 ratio with most major hotels and airlines (I use The Points Guy's valuations to easily identify which points have the best value - shoutout to World of Hyatt). You also get the benefits I mentioned in the introduction, a $300 travel credit the first time you use the Chase Travel portal and a $50 annual hotel credit. Those bonuses are great, but like I said, you need a reason to actually use this card. Without going too deep into the weeds, I'll just say the point-earning potential is incredible. The highlights are 5 points per dollar on spending through Chase Travel and 3 points per dollar on all restaurants (we like food). You get all of this for the cost of, brace yourself, $95 annually. For anyone who enjoys traveling, I have no doubt in my mind that this is the ideal starter card. I already have plans to upgrade to the $550 annual fee version, but I'll spare you the dirty details that make that upgrade worth it for us.

We like to fly Delta, so Lizzie has a Delta card

What about You?

That card is right for Lizzie and me, but what card is right for you? The first question you have to ask yourself is "How do I spend most of my money?" For us, it's travel. I can easily see that by looking at our spending categories over the past year. Even if you aren't a borderline obsessive CPA and haven't categorized every single dollar you've spent since 2019, it shouldn't be too hard to think about this question and maybe even take a look at your credit card's app. Do you have a favorite airline? Do you not travel as often as you'd like, but still love restaurants? Once you've identified your habits, shop around and read reviews of cards at The Points Guy to make sure you understand exactly how to maximize the value of your potential card. If you are in a committed relationship, you can diversify and even choose multiple cards! Remember to think about both signup bonuses and ongoing point-earning potential.

If you've read this far, I appreciate you and hope you learned something new about credit cards. Please forgive me for one moment as this is not the point of this article, but if you open up an account for the specific card I mentioned, I'd appreciate if you used my referral link here. Always feel free to reach out to me personally, I'd love to discuss any specific questions you have. Remember that credit card companies desperately want you to use their cards. Give them what they want but make them work for it!