Finding Your Next Card

Commitment

While I’m no loyalist, I do value commitment in all phases of my life including credit cards. That’s because a percentage of your credit score is the average length of your accounts. If you have two cards, one you’ve had for ten years and the other brand new, your average length of your accounts is five years. If you cancel the card you’ve had for ten years, you now have a nonexistent average. On the flip side, if you retain the card(s) you’ve had longest (assuming they have no annual fees or you’re still claiming the value from the fees), your score can afford to adopt some new plastic or metal friends into your wallet.

Know Yourself and Spot the Fakes

Where do you spend your money? For me, it’s dining and travel. Nearly 100% of my discretionary income goes to one of those two categories. Find out what your category is and find a card that will bring you the most value. Whether you spend most of your money on groceries, gas, business expenses, tuition or rent, there is a card for you. I recommend a simple spreadsheet that takes your annual spending, and calculates the value in rewards provided by each card you’re considering to identify a clear choice and help you spot the fakes!

For instance, you may think you’re doing yourself a favor by charging all of your Alaska Airline purchases to the branded credit card. But let’s say for a moment your goal is to travel from Seattle to New York (JFK) RT nonstop. That itinerary in April is 32,500 miles or $426. To achieve that with your Alaska card, you’ll need to spend $32,500 dollars generally or $10,833 on Alaska Airlines flights alone. Alternatively, you would achieve the required points with just $8,520 in airfare spending with the AMEX Platinum card OR $9,467 in dining and travel with the Chase Sapphire Reserve. So while the Alaska card is great for the companion fare, don’t confuse the branding as value. In our example, using a non-Alaska Airlines credit card to pay for meals earned triple the rewards on Alaska Airlines flights when compared with its own credit card! Definitely not what you’d expect.

Using a non-Alaska Airlines credit card to pay for meals earned triple the rewards on Alaska Airlines flights when compared with its own credit card!

As you are working through the numbers on your spreadsheet, you may elect to add a powerhouse metal card in your wallet for perks or top categories, as well as an everyday spending card which helps you net the best return for all of your miscellaneous spending. This allows you to maximize your earning potential on all purchases. But the important piece is that you do the math before you start spending. So ensure that the cards you pull out for each purchase are the right ones for the job and most effectively helping you achieve your objectives. Happy traveling!