Credit Card Game
This is more of part two towards Millennial(ish) Money. You’ll be surprised at how much benefit you can get out of having the right credit cards.
I didn’t really get into the credit card game until recently. I discovered that there are many credit cards out there that offered rewards and cash-back for all purchases. For example, we all spend money on groceries and food in general. Instead of using cash or a credit card that doesn’t offer any rewards or cash-back, why not use a card that offers rewards points like the American Express Gold Card. I recently opened up an Amex Gold Card because its benefits were too good to pass up. You get 4x points per dollar spent on groceries, and 4x points per dollar spend on all restaurant/ dining worldwide. This was perfect because I get take-outs all the time during the quarantine. I was going to spend money on food anyway, so why not get some rewards for it. The cool part about this card is that every month, you have a $10 credit for Grubhub that you can spend. If you decide that this card is right for you, you should definitely check it out. The Amex Gold Card currently offers a massive sign-up bonus of 60,000 points. What does 60,000 point mean? Well, it could be used towards a round trip ticket to Europe or literally any destination for you next vacation [well, as soon as it is safe to travel again]. Honestly, this is one of the best cards in my wallet right now.
AMERICAN EXPRESS GOLD CARD
4X Points at Restaurants Worldwide
4X Points at US Supermarkets
3X Points for Flights
1X Points for All Other Purchases
Credit cards can be exciting but sometimes overwhelming with so many options. Before you get a credit card, you should find out where your credit score stands. If your credit score is on the lower end (i.e., below 650 FICO/ Vantage Score), you might not be approved for certain credit cards. For example, the Amex Gold Card is a relatively higher tier card. If you want a better chance of getting approved for the card, your credit score should be 700 and above. Perhaps your credit score is not that high, or you’re just starting out and building your credit score, that’s totally fine. There is plenty of starter credit card that you can get to start building your credit score. Before I tell you about some of those credit cards, it’s necessary to understand different credit card levels.
There are no annual fees associated with most entry-level credit cards and generally have some form of cash-back or reward point system. If you have no credit or have a low credit score (i.e., below 600), there are 2 options: secured credit cards or subprime credit cards. Secure credit cards work like this. You provide a cash deposit to the bank, let say $1000, and the bank will give you a line of credit equal to the amount you deposited; in this case, you’ll have a $1000 credit line. This is to ensure you can pay back for any purchase you placed using that credit line. This option is an excellent way to build up your credit once you prove that you are responsible for your spending and payments. The other option, which I do not recommend, is subprime credit cards. Subprime credit cards often carry higher interest rates and numerous fees since lenders view you as a greater risk. This can add up to high costs compared to traditional cards with minimal fees, or if they do charge fees, the card comes with luxury perks. In addition to more fees, you’ll typically receive a smaller credit line compared to someone with a prime credit score, and the card likely doesn’t come with a rewards program. I repeat, do not get these cards unless you have no other options.
Now for those who have a pretty decent credit score (i.e., 680 and above), there are many great started cards you should check out. I personally recommend the Chase Freedom and Chase Freedom Unlimited cards. These cards do not have an annual fee, and you can earn points for cash-back. These Chase Freedom cards are top-rated because they allow you to earn points pretty quickly. For the Chase Freedom card, every quarter of the year, there are specific categories that you can earn 5x points per dollar spend. These particular categories will rotate every quarter. For example, the current quarter category (as of August 2020) 5x points on Amazon and Whole Foods purchases. I have the Chase Freedom card, and I purchase basically everything from Amazon. So I can take advantage of the current category and earn 5x points back for all my Amazon purchases. Suppose you don’t care about these specific categories. In that case, you can try the Chase Freedom Unlimited, which earns you a flat 1.5x points per dollar for all purchases. This can be great because no matter what your purchases are, you will get 1.5x points back. Chase is currently also doing a promotional deal. New customers applying for the Chase Freedom or Chase Freedom Unlimited card will also earn 5x points per dollar on all grocery spend for the 1st year of having the card. This is honestly one of the best offers from Chase for a card that has no annual fee.
CHASE FREEDOM CARD
5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
1% cash back on all other purchases
The next tier of credit cards is for those with good credit scores and are traveling/ using points to redeem for flights. This is where the real credit card game begins. These cards typically have an annual fee ranging from $95- $250, but often comes lots of perks. These cards also usually earn more points when you spend on travel-related expenses. For example, the Amex Gold Card would fall into this category. With a $250 annual fee, this card will earn you 4x points per dollar spent on groceries and restaurants, 3x points per dollar spent on flights, $10 credit per month spend for Grubhub, and $100 airline credit used for flights. Although you are paying a higher annual fee, you can get a lot of benefit out of this card. Plus, you can flex your Amex Gold Card at restaurants because that card will catch people’s attention. If a $250 annual fee credit card is not your speed, you can look at the Chase Sapphire Preferred card. This card has an annual fee of $95 and will allow you to earn 2x point per dollar spent on all travel and dining-related purchases. This can include purchases such as hotels, Uber/ Lyft, restaurants, flights, and etc. It is a sound card if you want to get into the credit card game and earn points to redeem for flights. You can use these Chase Ultimate Reward points and transfer those points to partner airlines or hotels. You can basically then use those points to book for flights or hotels. The same goes for Amex Membership Reward points. Chase and Amex are by far the more popular credit cards because they have a solid reward program.
CHASE SAPPHIRE PREFERRED
2X Points on Travel (i.e. Uber/ Lyft, flights, hotel, and etc.)
2X Points on Dining (i.e. restaurants/ food delivery apps)
1X Points for All Other Purchases
The final tier of credit cards has an even higher annual fee and even more perks/ benefits. The most popular two are the Chase Sapphire Reserve and the Amex Platinum cards. Both have an annual fee of $550 and offers many perks for travel. I cannot personally recommend them as I do not have these cards. Given our current flight travel situation, I don’t believe these cards will benefit me.
These are the following credit cards that I have and would recommend: Amex Gold Card, Chase Sapphire Preferred card, Wells Fargo Propel Card, and Chase Freedom Card. I’ve already talked a lot about the Amex Gold Card, Chase Sapphire Preferred card and Chase Freedom Card, but I haven’t told you about the Wells Fargo Propel Card. This card, in my opinion, is the best cash-back card since the Uber credit card. The card has no annual fee, and you earn 3x points per dollar spent on travel, dining, gas, entertainment. If you’re looking for one card with no annual fee but earns you generous cash-back, I would highly recommend the propel card. There’s obviously way more credit cards out there that I haven’t covered, but I can only review and recommend the cards I have in my wallet.
WELLS FARGO PROPEL CARD
3X Points on Gas Station and Ride Shares
3X Points on Dining (i.e. restaurants/ food delivery apps)
3X Points on Travel (i.e. flights, hotel, car rental)
3X Points on Popular Streaming Services
1X Points for All Other Purchases
Whichever card you decide to get, make sure you can maximize all the rewards and benefits from that card.
Until next time!