Best Credit Cards

Which credit card deal to pick?

In my previous post, I described, how without getting on an  airplane or staying at a  hotel, my family has earned close to a million points in a course of 1 year. Full disclosure: I did include about 200 thousand points, earned by my in-laws as a result of my (very forceful) assistance!  All of this was done by signing up for credit cards with bonuses. If we were to put our regular expenses of around 1800  a month on just one card instead, we would have gotten maybe 22000 miles or at best 440 dollars with 2 percent cash back card.

The biggest  barrier to entry in this very lucrative hobby is a good credit score, around 740 or better. You also don’t want to have a mortgage on a horizon or any other large loan. Another thing to consider is when a deal is good enough to pull the trigger. That is because, you can’t apply for an infinite amount of cards. After so many credit pulls, the banks will perceive you as a  risky customer, scrambling for credit, so he can max it out.

To me , I try to aim for a value of  300 to 400 dollars per card upfront. That’s when it gets a bit complicated, since everyone assigns a different value to miles and points. It’s much easier with cash: 400 dollars in my pocket has the same purchasing power as 400 dollars in the pocket  of a single person. But the same can not be said about miles.

One person with flexible schedule can usually get much more value out of 50000 miles bonus than I can with my family of 4. One person can usually find 1 award seat on an airplane with no problem but it gets trickier, the more people you have. So, with that in mind,  I value 1 mile at 1 cent and hotel points usually at  0.5 cent for most programs. So let’s look at 3 cards offers and assume you will only pick one to sign up for the next 6 months or so. All of these offers can be found on my page “Best credit card deals for family”.

1)Barclay’s US Airways card that comes with 40000 miles bonus after 1st purchase and 89 dollar annual fee.

2) Chase Sapphire preferred , with 40000 points, which can be converted to 400 dollar cash.

3)Chase  IHG visa with 80000 hotel points after 1000 in purchases, annual fee waived.

It seems , the debate should be between number 2 and 3, with Chase Sapphire being the winner, since cash can be used for anything, unlike hotel points. Well, yes and no. You see, even though 40000 miles are worth 400 dollars by my metric (and 311 after the fee is deducted), this card will be going away probably in the next year or so. US Airways are merging with American airlines , so the card will be discontinued. Its only a matter of time.

So I would argue, that in this instance it makes more sense to go with choice number 1 because the other cards will still be there later. By forgoing this card, you will have an opportunity cost of 311 dollars. Maybe its overcomplicating things, but I always try to look at the big picture. Even though I have no use for these miles now, I know I will use them in the future at some point when they become AA miles. That being said, I got all 3 cards!

Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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