Which Credit Card Should I Use to Pay For My Divorce?

Jan 4, 2018

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“Reader Questions” are answered twice a week — Tuesdays and Thursdays — by TPG Senior Writer Julian Mark Kheel.

We’ve answered questions before about which credit card to use to buy an engagement ring, and which card is best to pay for college tuition. But TPG reader Randy has been impacted by a more unfortunate life event and wants to find a way to make the best of it…

I just finished a divorce and have to pay the legal bill. I can put it on a credit card and want to maximize what I get out of this terrible experience. Which card should I use?

TPG Reader Randy

First of all, Randy, we’re truly sorry to hear about your divorce. There’s really nothing fun about going through the breakup of a marriage, and obviously we hope you have better times ahead of you.

As you’ve discovered, some attorneys and firms will accept credit cards for payment of legal bills without charging any additional fee, which is a good chance to get at least something small back for the costs of your ordeal. However, make sure before you pay that there is in fact no additional charge from your attorney for using a card. Any fee tacked on for credit card payments will usually offset the rewards you’d earn, in which case you’d probably be better off just paying by check.

But assuming there’s no fee, you’ve got a few options to consider. We’re not aware of any credit cards that offer legal fees as a bonus category, so you’ll be looking to use one of the top options for everyday spend.

If travel rewards are your interest, then one possibility we’d suggest is the Starwood Preferred Guest® Credit Card from American Express. Starpoints earned with the SPG card are worth 2.7 cents each based on TPG’s latest monthly valuations, thanks to the ability to transfer them to 36 airline partners with a 25% bonus when you send them in batches of 20,000 points, or to Marriott at a 1:3 ratio. You’ll also find some great redemptions at SPG properties as well if you want to use them for hotel stays, making Starpoints one of the best flexible transfer currencies around.

On the other hand, maybe your attorney won’t accept American Express cards. In that case, a good backup option could be the Chase Sapphire Reserve. Ultimate Rewards points are another valuable currency to have, since transfers to its 13 airline and hotel partners are mostly instant (with a few exceptions) and you can get excellent value with several of them, including United, Singapore Airlines and Hyatt. The Sapphire Reserve also offers the ability to use points to book travel directly with airlines and hotels at a rate of 1.5 cents per point, which can be a decent value.

The small, but luxurious Singapore Airlines first class cabin.
Perhaps you can earn enough miles from paying legal bills to get away from it all in Singapore First Class.

But if you’re likely to use your points to book travel directly and can only earn them at 1 point per dollar as in this case, then 1.5 cents per point won’t be as good as just using one of the top cash back cards on the market. The Citi® Double Cash Card is an excellent choice with no annual fee and 1% cash back at the time of purchase with another 1% cash back as you pay for purchases, while the Bank of America® Premium Rewards® credit card can do even better if you have status with the bank’s separate Preferred Rewards banking program. You might also consider the Chase Freedom Unlimited as a hybrid option — it’ll earn 1.5% in cash back, but in the form of Ultimate Rewards points that could be transferred to travel partners down the line if you later combine them with one of the premium Chase credit cards.

Finally, if you’re looking at some significant legal bills, this might be a good opportunity to reach a high annual spending threshold in order to get extra credit card perks, or to cover one or more minimum spends needed to earn lucrative welcome bonuses. Don’t hesitate to ask your law firm to split your payments across several credit cards if necessary in order to maximize the benefits or bonuses on several different cards.

We know it’s not an ideal situation, Randy, but at least maybe you can earn some extra rewards to take a trip and meet someone new, or just get some time on your own away from everything. Thanks for the question, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured image by Stadtratte/Getty Images.

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