Batch #4/5 of Credit Cards: Bringing us to Today!

So this seems kind of boring, right?  Wait around to build your credit so that you can eventually apply for the bigger cards that will warrant more points, so that you can travel further.  It is what it is though, and is part of the game.  We college students have zero trust in a financial institutions eyes, and need to build this trust.  Through making our credit score higher. As a reminder, the things that make up your credit score are:

  • 35% Payment History
  • 30% Amount Owed
  • 15% Length of Credit History
  • 10% Types of Credit
  • 10% New Credit

More details can be found here.

In the previous credit card related posts, I showed you how I slowly, with a lot of research, got to the point where I am now.  Let’s summarize:

  • Batch #1: Discover It Student card. (September)
  • Batch #2: Chase Freedom and Citi Hilton Gold. (December)
  • Batch #3:  AMEX Blue Sky targeted offer. (February)

As a reminder, these are all supposed to be three months apart, and all applied for at the same time.  That is why they are categorized as batches, or “churns.”  For more information on the Batches 2 and 3, go here.

The Next Step: Batch #4

There is a lot of thought process behind the next step in my quest for credit.  I had been paying my bills on time with little to no utilization (The amount of credit you are using. When you have $1000 credit limit, and allow a statement to produce with $100 on it, you have a credit utilization ratio of 10%.  The lower, the better.).  My credit score had gone up to something in the mid 700’s, which is not awesome, but is certainly not bad after 7 months. You can call it good to greatish on the scale of Pathetic to Awesome. We were doing well, so it was time to bite off a larger piece of the pie.

I took quite a jump in cards for my applications in April. For those of you doing the numbers, there are not 3 months between February and April. As I explained before, I went light on the February applications so that I could get some bigger cards in April before I left for the entire summer.

Since I was going to be gone, I thought it would be a good time for some bigger cards so that I could take advantage of them during my heavy travel months, which are May to August. In April, there was an offer for the Citi Executive AAdvantage card for 100k miles. Another card that I was looking at was the American Express Platinum card.  Below is my reasoning for applying for these cards:

Citi Executive AAdvantage

At this point in my miles and points research, I knew that American Airlines (AA) miles were excellent for some of the trips I wanted to do.  Some great awards are 20k miles each way to South America and Europe during off peak months, as well as 25k miles to Japan during off peak months.  Off peak months were conveniently during times I could travel, which means I could take advantage of. I will have a post about how to evaluate award charts and the sweet spots of different programs, so that you can prioritize your mileage goals and know which points are best.

I digress.

This card had some interesting features that I could take advantage of:

  • Admirals Club Lounge access, while not flying on American, for you and 2 guests. Denver had a lounge that I could use every time I fly out.
  • 100k bonus miles after $10,000 spending in 3 months. (Holy shit.)
  • No Forex Fees (foreign transaction fees) with a chip in the card.
  • $200 statement credit after spending $200.

One thing that was hard to swallow was the $450 annual fee, that was not waived the first year. I justified the $450 annual fee by reducing it to $250, using the $200 statement credit listed above.  Then I did the numbers: 110k miles is 2.5 round trips to Europe in off season, or 3.5 round trips to Peru, or 2 round trips to Japan…get the picture?  I think 2 trips to Europe is worth $250, do you?

After some research, and asking people on Flyertalk about data points for college students being approved for this card, I decided to take a reasonable gamble and apply. I was approved instantly.  This was brilliant because after spending $10k in three months I would get 110k miles, which would jump start my mileage career very quickly.

Now, $10k is money that I don’t spend on my card, or spend period.  In order to meet this spending requirement, I learned a lot about Manufactured Spending.  This is the process of spending money on your credit card that will someday be returned to you. My common method was gift cards, loaded to a program where I could then pay my credit card with the gift card.  Manufactured Spending is complex, and is for 10 different posts in the future.  I don’t do much of this anymore.

I also added my parents to the card, so that they could use it for spending in non bonus categories from our other credit cards. I met the spending limit no problem, about 2 months after applying for the card.

American Express Platinum Card

The Platinum Card is one that you get just for the benefits.  Simple as that. It has a $475 annual fee, similar to the Citi card above. The reason why this is $475 is beacues I would apply for the Mercedes Benz version, which gave you an extra 10k Membership rewards points for the difference of $25.  Let’s look at the benefits that I thought were important to justify such a large annual fee.

  • Delta Lounge Access–  This was important to me because I booked a few tickets during a Delta mistake fare.  I had 12 flights booked on Delta alone this year, and having lounge access would be nice for a quiet place to hang out, and in case abnormal operations hit…which they did.
  • Centurion Lounge Access– Centurion lounges are lounges that American Express owns and operates. They are at select airports, and said to be some of the nicer lounges in the country. My dad and I had some long layovers in Mexico City and Dallas this year on our way to and from Chile.  My dad has a brain injury, which means airports and flying are hellish for him. A quiet place to sit for 7 hours in Mexico city, with a few Margs, would be nice.
  • Priority Pass Lounge Access– Priority Pass is a membership that gets you into lounges all over the world. These lounges vary, but looking at my booked travel, I could really utilize this feature.

So those are the lounges…why is that important? At most international lounges you can get a few drinks and a meal. A meal that I would otherwise be paying for. And drinks help me sleep on the plane, I think.  Also it is nice for airline lounges to help in adverse conditions. Adverse conditions are not normal operating conditions, like weather. On my way to DC with mom and dad this year, our flight got cancelled. I went to the lounge and had seats our first class seats on the next flight within 10 minutes. We walked past our gate and it was havoc.  Lounge staff make travel a lot better, because they can pull strings.

    • $200 Airline Fee Reimbursement– You can get credited $200 on baggage fees, in flight purchase etc. Per Flyertalk, I found a way to buy $200 in United Gift Certificates. These are for flights I would have booked anyways, reducing the annual fee to $250.
    • No Forex Fees.
    • 50k Membership Rewards points after $3,000 spend in 3 months.
    • Car Rental Insurance– When you rent a car and use your AMEX card, you can get an insurance plan for $25 for the entire amount of time that you have the car rented for.
    • Baggage Insurance Plan Use your AMEX, and your bags get lost or destroyed, get compensation…a nice touch when you fly around the world with a couple grand ins ski gear.
    • Global Entry Fee Waiver– A program that lets you go to an automated kiosk when entering the US from abroad where you get to skip the line at customs.  This also includes TSA Pre-Check, which gets you expedited security screening. It is a nice touch when you fly a lot, and something that I would not have paid for otherwise.
    • Purchase, Return and Extended Warranty Protection– If it breaks, gets lost or stolen or anything of the nature, they will help you out in getting a new one or refunding you.
    • Other smaller things: Travel Accident Insurance, Starwood Gold Status, The Concierge and Mercedes vouchers.

When I look at that list, I find it worth it. From a points perspective, it diversifies my points to being earned with other airlines that I am interested in, like Singapore, Air France, British Airways and Air Canada.  Diversifying points is important because every airline has places where they are better than others.  For example, I can use 10k United miles for a flight from Lima to Cancun, whereas that same combination would be 17.5k AA miles. Because of this diversification, I have options when booking a trip. This ultimately leads to cheaper travel.

Another factor that drove me to applying for the Platinum card was the fact that our Costco spend was cash. We spend enough at Costco to get our membership for free every year, so i was losing out on a small chunk of points from there.  The goal of this game is to try and find where you can make your spending more efficient, and take actions to earn in those places. Costco was one of them for us, so this would also help earn some points there.  Yes, I could use my Blue Sky card (Costco only accepts AMEX), but those points are not worth as much.

Looking at the benefits, I decided to apply, and I am glad I did. I have used my Priority Pass in Montreal, London, Johannesburg, Toronto, Mexico City, Santiago and Anchorage this year. I will use it in a week when I come back from Barcelona, and later on for my RTW trip this winter. The Delta lounges helped a lot when shit hit the fan in Minneapolis, and that saved our weekend 4 day trip during the 4th of July. If it were not for those lounge employees in Minneapolis, our trip would have been half the amount of time it was supposed to be. That’s worth it alone. I will gladly pay a fee if it means that our family trips are better protected against delays while also making our lives just a tad better when traveling.

Many people say that the AMEX Platinum card is getting worse because it keeps taking away benefits.  I was not around for the downgrades, but, I hope they add some more benefits soon so that they are more aligned with their competition. (I am looking at the Citi Prestige Card). Extra points earnings for certain categories would drive me to use the card more, especially if it is on travel related things.

The enjoyment that my parents get while going to the lounge is well worth the price of both of these cards.  I am glad to pay the fee for these cards (and theirs) after all they have done for me. It makes our trips a tad more fun, and the attitude a bit more relaxed.  My dad is able to actually comprehend what is happening and does not shut down while traveling anymore, which is great. It is worth every penny in my opinion. If I did not fly as much as I do, I wouldn’t apply for either of these cards, now, because the sign up bonuses have changed (not on the AMEX).

Conclusion of Batch #4

The Platinum Card and Citi Executive came out to giving me 163k points after making the spending requirements. That is a huge jump in my points balance.  Add that to what I had for flights that were purchased for this year and we are looking at ~250k miles/points, just in my name.  Now, we need to use them efficiently, which I will start to talk about in later posts.

Batch #5 of Credit Cards

I only applied for one card on my fifth run, which happened three months ago in September.  My credit score is now solid, so I felt confident that I could apply for more, but in reality, it is good to spread it out, I mean, I had just about 300k miles right about now.  Chase had an increased 50k + 5k sign up bonus in September for the United MileagePlus Explorer, which is higher than the usual 30k mile offer. The 5k miles came if you added an authorized user. I add each of my parents to any new card I get so that they can control my account in case I am overseas and can’t.  They also charge things to my accounts to help me out with meeting spending requirements.

In addition to the 55k miles, I would get a $50 statement credit. This was available only if you applied through a link found while buying plane tickets on the United website. I didn’t have to buy a ticket, just act like I was…so research and patience saved me an extra $50. Nice!

We use United miles most in our family, so this was not a hard decision for me, but the benefits of the card are:

  • Free Checked Bag
  • No Forex Fees
  • Priority Boarding
  • Two Lounge Passes to the United Club
  • Waived First Year Annual Fee
  • 10k mile bonus after spending $25k in a year.
  • Trip Delay, Baggage, Cancellation/Trip Interruption, Auto/Rental Car and Travel Accident Insurances.
  • 1x points on all purchases, and 2x points on United purchases.

Many of these benefits come with my Silver status, and I have $550 in united vouchers to burn before I buy a single United ticket, but, applying for the card was worth the points. I would consider this card to be a good middle of the road card, and a logical middle step for someone getting into this hobby.

Conclusion

There is a common trend here.  The cards that are in your wallet can help you, if you choose wisely, and know your facts and benefits. For example: Chase offers trip delay insurance, which covers necessary costs in the event that your trip is delayed more than 12 hours or requires an overnight stay. Ours from Minneapolis to Washington required an overnight stay. We were reimbursed ~$300 for meals, hotels, and transport (as well as a shirt) simply because we knew our benefits. Now is getting reimbursed ~$300 worth the $95 annual fee?  You tell me.

What I am getting at is the fact that you need to always do your research and understand what you are paying for.  This hobby is all about research and trying things.  Don’t be afraid to fail, and always research ALL benefits that you are subscribed to.

This is the most up to date credit cards that I have, meaning we have reached today.  It took me nearly a year and a half to get here.  It takes time, but it’s worth it, both from a financial future perspective as well as a traveling the world perspective. I hope these credit card posts were helpful.  I agree they can be more thorough, but, I don’t want to bore you too much nor overwhelm you.

Now that you have a bit of an idea on how to get points, I will begin my analysis of award charts and frequent flier programs. This will help you to decide which points to get so that you can reach your travel goals.  The first program will be British Airways sometime this week. What I have in mind for this post is like nothing I have seen from all of my research for British Airways.  Check it out sometime this week.

On a side note, this post might sound grammatically incorrect and might not make 100% sense, but I wanted to get it done before my next flight…so cheers from somewhere over Virginia at 37,000 feet!


Screenshot 2014-11-20 at 2.59.26 PM

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