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A Credit Card Strategy for Regular Spenders

Jan. 05, 2012
5 min read
A Credit Card Strategy for Regular Spenders
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Update: Some offers mentioned below are no longer available. View the current offers here – Starwood Preferred Guest® Preferred Credit Card from American Express, Premier Rewards Gold Card from American Express, Chase Sapphire Preferred Card

There have been many great posts on different blogs in recent weeks about 2012 miles and points credit card strategies. I think it is awesome to learn how others are maximizing what is in their wallet, as I know it helps me evaluate if I am maximizing what is in my wallet (or in my safe, in most cases). However, one thing that I have noticed in many of these posts is that the strategies are often geared towards those who have a large amount of reimbursable/business expenses going through their own credit cards. While I know there are some in the miles and points community who fall into that category, there are many others who have to rely on their own paychecks, grocery purchases, gas fill-ups, etc... to meet minimum spending requirements, and earn miles and points on their cards. I know I certainly fall into the latter category. Though don't get me wrong, I would love to be able to have tons of reimbursable expenses go through my own cards! I would say that my family averages $3,000 - $4,000 per month on credit card spending. We put everything on credit cards that we possibly can that doesn't require an additional service credit card service fee.

I have also recently received several emails from people who were interested in a "simple" credit card strategy that doesn't involve dozens of different credit cards. I know especially when your spouse isn't 100% on-board with the whole credit card game, simple can be essential. Heck, even I am trying to simplify some of my credit card usage - I'm just getting too busy to have 10-12 active accounts that I am using on a regular basis. So, here is what I am doing with my cards for this year.

1. First and foremost, if I am trying to meet the minimum spending requirement on a new credit card, then that card gets the vast majority of the purchasing action until the minimum is met.

2. I use my Continental OnePass Plus Card for all of my autopay reoccurring expenses. Things like daycare, insurance, satellite, cell phone, etc.... all are linked to that card. I also use it when purchasing Continental/United airline tickets for 2x points. With my autopay expenses, my Continental airline expenses, and a few other odds and ends, I am able to meet the $25,000 annual threshold required to get a 10,000 mile bonus annually. I really love my Continental miles, so this arrangement works out well for me.

3. I use my Chase Sapphire Preferred Card for all restaurant and most travel expenses to receive 2x Ultimate Reward points. I also use it to pay for any "foreign" purchases to avoid paying a foreign transaction fee. Finally, I use it for most things I purchase online through the Ultimate Rewards shopping portal. My husband likes simplicity, so he just uses it for most everything, and that works out okay for me.

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4. I use my Starwood Preferred Guest Amex for all SPG hotel stays, and for many everyday expenses that aren't paid at 2x on other cards. For me, SPG points have the most value per point, so it makes sense to put some effort into earning them through spending that is only going to get me one point per dollar anyway.

A good card that given an annual spending bonus I don't yet have is the American Express Premier Rewards Gold Card. If you spend $30,000 on that card in a calendar year, you receive a 15,000 Membership Reward points bonus. I recommend picking a card you want to keep for a long time that gives a good annual bonus for reaching a spending threshold (like the Amex PRG or the United Explorer card), and put all of your regular bill paying type expenses towards that card. Then maximize category bonuses (like groceries, restaurants, travel, etc... ) on other cards. Once I get a Chase Freedom in the near future, I will be using it for the quarterly bonus categories. If simple is important to you, then don't use more than two to three cards at once. It can really start to get crazy if you have expenses on tons of different cards all the time (trust me, I know!). That said, I do try to occasionally make purchases on other cards just so it doesn't look like I only go them for the sign-up bonus.

I am not getting hundreds of thousands of miles annually from my monthly credit card spending, but by being strategic I do earn a fair amount of miles and points even on a relatively "regular" amount of credit card activity. Of course, for some people it will make more sense to focus on cash-back cards for your regular credit card spending, but my currency of choice in this regard is miles and points, so that is what I focus on. While I will certainly add and lose a few cards in my collection over the next year, I don't think that my core strategy is going to change substantially. What is your credit card spending strategy? Do you keep it simple, or do you have a more elaborate system in place?