Don’t Leave Home Without It

Some people will tell you that credit cards are for suckers or that the best thing to do is just “cut up your credit cards”. This might be true if you don’t have the willpower to resist impulse purchases or if you have trouble not buying stuff you can’t afford. But if you can control yourself and you can pay off your balance in full every month, credit card reward programs can be… well… rewarding.

I can’t stress this enough, reward programs, miles, points, etc are WORTHLESS if you make a late payment or pay a finance charge even once!!! So don’t do it!

Don’t believe me? How about we think about it for a minute. Let’s say for example, you have a point card that gives you $0.01 per dollar you spend. Now, lets say you manage to spend $3,000 in a year and have earned $30 in “rewards”. Now lets say you finance this on your card at 20% interest and pay it off over the course of a single year. This $30 in “rewards” cost you $334 in finance charges. How exactly is that a deal? What else could you have spent that $334 on? What if you plan to pay it off every month, but are late one time? That will be a $30 late fee and boom your “rewards” are now toast.

For those that care, here I use 3 credit cards I use and why:

Starwood Preferred Guests
American Express

I have always liked American Express and have been a member for 10 years now. Things I like about the card:

  1. One Starwood Point is worth between 1 and 5 cents depending on how wisely you spend them. This is far better than most point programs which lock points at $0.01 or lower. Some examples: 14000 Starpoints = $150 at and 9500 Starpoints = $100 at William Sonoma. Cash your points in for “instant rewards” and the points can be worth a lot more. $100 hotel credit at the “W” was 7500 Starpoints or 12,000 points for a $600 a night stay in Hong Kong.
  2. The card sync with Microsoft Money
  3. If you spend $30k a year on your card you get free Starwood “Gold Status” which let’s you earn bonus points on stays (making those dollars worth more)
Alaska Airlines Visa

I travel a lot and I have status on Alaska Air, so it make sense I get an Alaska Airlines credit card. Other airlines have similar deals, so if you travel a lot, I would be sure to pair this with your elite status. I like this card because:

  1. I get 3 miles for every dollar I spend at (this adds up) and 1 mile for every other dollar
  2. “Miles” are worth between $0.02 cents and $0.10 cents depending on how you use them. Hint: I only use them when I am getting the best value for the mile and that is usually international First Class. If I can only get $0.02 per mile of “value”, I usually just pay for the ticket.
  3. $50 Companion Ticket – This thing is AWESOME. I fly back East once a year with my wife and a coach ticket non-stop is usually $700 or so. This perk saves me $650 a year at least.

Chase Freedom Mastercard

I have had this card since it was a Shell Gas Card and I was getting 5% cash back on gas. I still use it now, but only for gas purchases as it was getting me 3% off whatever I purchased “the most of in a month”. Over time though, this card has become less and less rewarding and I will probably cancel it before too much longer.

The thing I absolutely hate about this card though, is that it does NOT sync with Microsoft Money.


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