My Credit Card Game
- Clinton
- Aug 10, 2019
- 14 min read
I just applied for, and was approved for the AmEx Blue Cash Preferred credit card! This is the last card on my two year plan to use credit cards to our advantage. I have now reached the late game for me and am milking the most out of my credit cards in my regular spending, as well as have used large purchases in our regular spending to get new cards with minimum spend requirements to capitalize on the bonuses. I did very well at this, but made some mistakes along the way:
Here is my plan in a nutshell, correcting for my mistakes to provide a better plan for you to follow if the spirit moves you (and you have self control. If you don’t have self control: learn to cultivate it, leave this post immediately without reading another word, and don’t even think of coming back until you've proven you can live in monetary temperance, well below your means....). So here’s my plan the way it worked for me, the first few in order of acquisition:
Chase Freedom - use for 5% roving categories, mostly groceries, gas, and Home Improvement for us. This 5% is accumulated in Chase Ultimate Rewards Points which are transferable to other Chase cards. We save these points and use them for travel because you can get 1.5x to 2x (times) more per point your 5% has gleaned if you redeem them for travel with a Chase premium card. More on that later. I already had this as my only credit card for years, but this should be your start if you can get it with your credit, if not, start with the Discover IT Secured card to build your credit until you can upgrade that to a regular Discover IT and get this one. The Chase cards should all be acquired in your first 5 cards applied for because they have VERY strict rules, called the 5/24. They will not approve you for a Chase card if you have applied for 5 or more credit cards (any bank) over the course of 24 months, so for now, prioritize Chase so you don’t miss out on valuable cards due to 5/24. *Tip: make a chart of the categories for all your roving cards and update it every three months (every quarter when the roving category cards change). Keep this chart in your wallet so you make sure you are using the correct card for the correct category store (They only tell you the new categories about 15 days before the change, and you have to opt in, so you’ll have to make this a discipline as well as sign up for them to notify you to activate your new categories.)
Discover IT - also use for 5% roving categories. Discover has a wonderful cash back structure, where they don’t give you a signing bonus (neither did the Chase Freedom), but instead, after the first year (only the first) they give you all of the cash back you’ve accumulated over the first year again as a bonus; meaning that you’ll get your cash back every month as usual throughout the year, but then at the end of year 1 they add those 12 months of cash back up and give you that cash back again on top of the monthly cash back they’ve already given! That means you double all of your cash back in the first year! This is a very good deal. I redeem this cash back, as much as is feasible and I’ll spend, on gift cards through the Discover site. There are only a few gift cards that I’d use, but if you look and plan you can get sometimes a $30 gift card for $25 from your cash back account, or $50 card for $45. That’s between 10% and 20% more on the cash back you’ve already gotten back from your purchases! Sadly I don’t use all my cash back in this way, or I’d end up not using the gift cards and wasting it, or having to manage and sit on a ridiculous amount of gift cards. The remainder I use against my card balance. We played the system a bit and when my first year was up, Morgan got a Discover IT card and now we’re using that one to max out advantage. I only use my old one for a small addition to my Amazon gift card balance every few months to keep the card active and happy. I do this small spend on all of my cards that I don’t use very much, just so the issuer doesn’t see it as unused and cancel it - that could be a hit on my credit score if cards are not cancelled strategically. When I started this plan it was also possible to apply for a second Discover IT card (and have two yourself). I’m hoping to do this when Morgan’s year runs out and hopefully continue capitalizing on the first year doubling. Make sure these categories get onto your chart, Discover tells you the categories for the entire year, so you can get this done once in January!
Fort Knox Credit Union Credit Card - 5% on gas. This card was a little obscure, but I went searching for a card that gets a good cash back percentage on gas, because we spend a consistent amount on it all year long. When the Chase or Discover Card has a 5% gas category those definitely take precedence because the value of the return is greater (10% back with Discover in the first year is the first precedence, 5% in Chase Ultimate Rewards points which can be saved and redeemed at a higher value for travel when transferred to a premium Chase card), but having this at our disposal for the other quarters is indispensable! I had to create an account (obviously) at FNCU and make a one time donation to a particular cause (it was a military one I believe) to open this card, but the return is worth it, as well as having a credit union account when it comes time for real estate investments in the future. You should get this card later depending on how many Chase cards you have decided to get. if you see value in the three Chase cards that follow, dont get this yet! When I worked out my own strategy and it didn't need more than 3 (I did screw this up though - more on that later). Chase cards are still pretty valuable, so sit down and design your strategy so you don’t miss out on a Chase Card that is valuable to your long game.
Chase Amazon Prime Card - 5% on Amazon purchases. For me this card is a no-brainer. Unfortunately, I missed out on this one due to 5/24 because I started this game without the knowledge I possess now, which is why in this list it comes much earlier than I went for it (at the time I was starting 5/24 didn’t apply to this card, but by the time I got to applying for it they had added it to the 5/24 list - take this as a lesson: credit card rules change frequently, so be aware of this and work it into your plan. I had gotten a Utilities Card and the Fort Knox card, and after the other two “essential” Chase cards, I was locked out...). This is an excellent card if you already have Prime, and shop on Amazon. If not, you don’t need to bother. Fortunately I found that Amazon also has a Prime Store Card with Synchrony bank that also gives 5% on all Amazon purchases. Synchrony bank is a lot more frustrating to work with their online portal, but it serves its purpose and I didn’t totally lose out, only partially. I tried to get this card 6th, so, you know: 5/24 & Denied.
Chase Ink Cash - 5% on office supply stores, as well as internet services. this is a business card, so if you don’t have some sort of business, or a side hustle this one isn’t for you. In fact, I found that I'm not using this very much at all. The sign up bonus was excellent, so there’s that, but I’m not using it for its planned purposes, but still may in the future. I include it here along with my rationale as food for thought for you. If you want it, you have to get it before 5/24, and you’ve still got one more Chase card to get! This means if you want this one you should not get the Fort Knox card until after this and the Sapphire Card that’s next. My rationale for this one was that I could buy gift certificates at Staples for Lowe’s, as well as many other places and restaurants to extend my 5%. I haven’t really done this much, but it is an option. I was also starting my business and thought I’d keep my business expenses on this one, but since my businesses don’t really revolve around office supplies I found that I could get more bang for my buck using my strategies on other cards. I just keep a spreadsheet of business expenses with attached PDFs of receipts for tax time...
Chase Sapphire Reserve - this is a strategic card, but this is the last 5/24 slot and this is a super valuable card! If you don’t plan to travel in under a year after getting this card, I don’t think this is worth it, but I have a place holder strategy at the end of this bullet if that’s the case but you have future travel plans*. So - 3% on travel, 3% on dining, a huge bonus, Priority Pass membership (you must apply through the Chase portal to get the PP account and card, it’s not automatic), a $300 travel credit, but most Importantly: all Ultimate Rewards Points can be transferred to this card, and redeemed for 1.5x per point for travel through the Chase portal (and sometimes 2x points if you transfer them to a travel partner - but you have to research this very carefully and crunch the numbers, sometimes you get the better deal through the Chase travel portal)! This gets huge when you use the Chase Freedom to accumulate 5% back points, then transfer them to the Sapphire to use for travel. I spent time before i got the Sapphire racking up points on the Freedom, which I later transferred to the Sapphire when I got it for our trip to California. We paid for the airfare for two of us to CA and back, as well as all of our hotels but one over a 2 week stay with points in this manner. *The $450 fee is worth it if you really use it ($300 back for travel and the overwhelming returns on the points). If you don’t use it for travel it’s not worth the fee and you’d lose the $300 credit which brings the annual fee down to a more reasonable $150. I still think getting another Chase card to hold the place until you’re ready to travel might be worth it. You’ll lose the signup bonus, which is considerable, but you’ll be saving the spot so you can use the other benefits of the Sapphire Reserve without getting hamstringed by 5/24. You can get another Chase card and keep that until it’s time to travel and then call Chase and ask to upgrade that card to the Safire Reserve. The Business Ink won’t transfer because it’s a business card and you can’t switch between business and personal, so you might want to get the Chase Freedom Unlimited card to later upgrade to the Saphire. I don’t see normal value in the Freedom Unlimited, because I get similar value from a combo of other cards, but it does get 3% back on every purchase for the first year, and 1.5% subsequent years. If you use this in the cracks of your everyday spend on things that don’t earn more than 3%, you can rack up some UR points with it, and later upgrade to use these points at a greater value when its time to travel. Like I said though, you’ll miss out on the huge sign-up bonus. *You could also just not get more than 4 cards ever in the space of any 2 years, but I see a lot of other value in some of the following cards and didn’t want to live in the early game for years without being able to acquire these other cards, so I offer an “ok” possibility that still offers access to the Sapphire in the future (the Freedom is a keeper card you should always keep, and it is beneficial to have it in conjunction with the Sapphire to keep racking up that sweet 5%. Im not sure if you can get 2 Freedoms as I say later, nor am I sure if you can upgrade the Amazon card or not, which I don’t believe is an Ultimate Rewards Card, but again, I see that as a very lucrative keeper).
The following cards can be acquired in most any order, so lay out my order and thought process, and use it for your your own strategizing:
The Savor Rewards Card - 4% on dining and entertainment. $0 fee for first year, $95 annual fee subsequent years. Entertainment is pretty broad here: tickets, concerts, sports (I believe - check it out). The bonus when I got this card was $500 so this was a priority; as of posting this the bonus is $300, still a good bonus, but you’d have to look up the current bonus to decide for yourself. I plan on cancelling or product changing this card when the year’s up because the Uber Card is similar enough with no fee. We use it mostly for restaurants and not entertainment (which Uber Card doesn’t have)
US Bank Cash + 5% on two categories you can choose. There is usually a sign up bonus on this one. Categories I chose: 1. Home Utilities!! 2. Streaming Services (&TV) I have my electric bill on auto pay and the card to auto pay in full (I don’t have any other utilities...). This is an awesome card for strategic spending. Check out the other categories you can choose for yourself. You have to choose/activate your categories every quarter, but can either choose the same ones or change them every quarter based on your needs and for planned purchases.
Barclay‘s Uber Card - 4% on restaurants, no annual fee. This is a good card for eating out. I’m keeping this one and cancelling the Savor because of the annual fee, and we very rarely spend much money on entertainment. Compare the two, your habits, and run the math to see if your normal spending on entertainment (you are tracking your spending, right?) computed with the 4% bonus comes out ahead of the fee, **Note: it’s about $2400 on food and entertainment Just to break even!! (there are some other great perks of the Savor, but they don’t work for me because the ones I’d use are covered by other cards I own and the math doesn’t work out). Uber’s the winner for me.
Wells Fargo CashWise Visa - 1.5% on all purchases. There was a good bonus when I got it, not quite as good now, but I got this one to use for a largish purchase to churn the bonus. It’s not a bad card, but I don’t have a use for it really (Discover still making 2% in the first year.....)
American Express Blue Cash Preferred - 6% on Groceries and streaming services, $95 annual fee. The streaming is new, so I’ll change my Cash + category next quarter to cover something else (maybe “electronics stores”?). There’s a pretty good bonus for this one right now, and the math puts us ahead a couple hundred dollars a year on just minimum spending on groceries after the fee, so it’s worth it. For us it works out to just over 4% on groceries, so I’d probably use them during grocery categories, but we’ll do ok, and it’s my first foray into the American Express ecosystem. I should’ve gotten this card right after 5/24, but both the Chase Freedom and the Discover IT were both on the grocery category, so we maxed out both buying groceries as well as gift cards for the grocery stores to use after the grocery quarter was up, so we got 5% and 10% respectively. The other cards for utilities and restaurants made sense for us at the time, you probably might see the Blue Cash Preferred as a more important card based on grocery spend being a higher percentage spend for most people
I’m still using credit cards like cash and pay off in full multiple times per month, but we have earned thousands of dollars in rewards and strategic use of cash back and points accumulation, as well as we paid for more than half of our California trip this summer. I got the Chase Sapphire Reserve strategically for this trip and the year was up Aug. 1. I’ve now downgraded it to a second Chase Freedom, so we can start doubling up on 5% category limits (now we can get 5% on up to $3000 spend on the rotating categories, which we’ll save for years to come, upgrade one of these cards (or Morgan will apply for a new one if there’s a signing bonus) to the Sapphire again for our next adventure. I still don’t see any strategic use for the Chase Freedom Unlimited, so I went with two Chase Freedoms, I don’t know if you can just get two Chase Freedoms outright, or if the downgrade is the only path to this. If you find out you can, I’d amend my previous strategy for holding a Chase place for the Sapphire reserve until you’re ready to travel.
All of these perks and bonuses are essentially free for us, and the return is well worth researching, careful planning, and using what we would normally spend anyway (and ONLY what we would normally spend - splurging for points doesn’t make any sense, because you have to spend way more than the points are worth just to accumulate them: $1000 spend is only worth $10 in points generally, $20 if you can find a strategic way to get 2x on their redemption, so if you weren’t going to spend that $1000 anyway, you’re out $980!! So don’t be dumb... also, the second you don’t pay off your card in full you’re losing 20% on everything you spend, so that’s really dumb too!)
So, I’m proud of the way we’ve squeezed more value from our normal living, and if you are smart about it, you can do this also! YMMV depending on what your normal everyday spend is, as well as how creative you are at finding ways to pay for everything on a credit card, and maximize the benefits for everything you spend (hence: 12 different credit cards, each with their niche of maximized benefit...). Now that I’ve got the final primary card in my plan, I’m going to give my credit score a rest. Almost all of my metrics that contribute to credit score are excellent, except for the number of hard pulls (hard credit checks ding your score a bit, and so do number of them over a short period of time), and my incredible 843 score has gone down to 804. That’s still plenty high enough to get the best rates on loans, but with future real estate investing in the 10 year plan I’ll let the overheated score cool down a bit and regain itself. I am under the impression from research that these stay on your report around two years, but cease affecting your score after only one year, and then it will go back up pretty quickly. Also note that this has been almost two years in the execution, and some would say this is way too fast. I had an exemplary credit score and could absorb more risk, you need to asses your own tolerance before you lay out your timeline.
There are other good cards I didn’t go for based on the way this strategy has worked, so you should also look into it to see if there is a card that nails your spending habits and creates more value for you. The Citi Double Cash is an excellent card for instance. 1% at sale, another 1% when you pay it off = 2% back on every purchase! If you’re not into the game, it’s the all purpose card for you and it does better than the 1.5% cards out there (check intro year bonuses, you may find a one year with another card and then get the double cash may be better for you. I decided against it due to the essential 2% we‘re getting on the Discover IT: 1% on everything like every other card, plus another 1% at the end of year one, plus roving 5% was a better deal and easier to utilize for me. There‘re other ones out there too. Some use an American Express ecosystem for travel like I used the Chase (AE trifecta is the “Blue Business Plus”, the “Platinum“, and the “Gold” cards). Some also used a Citibank trifecta, but it is weaker and has just gotten weaker as they’ve just dropped a lot of perks...
Again, If you have no self control, please don’t follow this advice. Using fabled benefit as a justification that only leads you to get yourself into dumb consumer debt that negates all the benefits as well as has a 20% or more cost per dollar you earn is plain dumb. If you’re the person that can’t trust yourself not to do that, then please follow Dave Ramsey and only use cash for everything.
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