CNBC has an article with advice from “financial expert” Kevin O’Leary from Shark Tank about how many credit cards you should have, and how you should use them.
And it’s really, really bad advice. Which I’m sorta sad to see, since he has always been my favorite guy on Shark Tank.
His advice centers around the following:
- How many credit cards you should have, and why
- How many credit cards he has, and the ridiculous reasons for it
- Why you should earn cash back
Let’s look at the advice more closely, and why it’s (mostly) wrong.
How many credit cards should you have
Kevin says you should have two credit cards:
- You should have one credit card with a “very low limit” (he says $2,000), and that’s the one you use for online purchases; that way if it gets hacked, nobody can spend more than $2,000, so that’s how you protect yourself
- Then the other credit card is one you use when you actually buy things that are not online; that way you haven’t “exposed that number to the internet,” with one card being “out there,” and the other being “private”
No, no, no, no. This advice really makes very little sense.
First of all, credit cards offer fraud protection, so in the event your card information gets compromised and you report it to them, you won’t be on the hook for it.
Second of all, just because you only use a card in-store rather than online doesn’t mean the info can’t be compromised. Your credit card information can also be stolen from in-store transactions, whether it’s due to credit card skimming, or someone just easily stealing your card info.
You’re harming your credit score greatly by having a card with a really low credit limit that you use constantly. One of the major factors of your credit score (30%) is your credit utilization, and if you’re using that card regularly up to close to the limit (because the limit is so low), this is going to have an adverse impact on your credit score.
How many credit cards Kevin has
Kevin says he has eight credit cards. For a moment I thought “great, he’s good at maximizing rewards, that’s at least one redeeming quality of this story.”
But nope, the premise is that Kevin travels frequently internationally, so he carries eight credit cards in multiple currencies, like Swiss Francs, British Pounds, Euros, etc. As he explains it:
“I look for efficiency, and having all these credit cards gives me diversity. It makes sure that I’m not being charged for currency conversion. Drives me out of my mind when I’m buying something in London and I’m getting whacked on a conversion price back in U.S. dollars. That doesn’t happen to me, because I have one in British pounds. My whole thing about credit cards is I don’t like fees. I’m cheap.”
It’s 2018. There are tons of amazing cards without foreign transaction fees. Maybe he’s suggesting that even without foreign transaction fees, the “spread” between the official currency conversion rate and the Visa and Mastercard rates is really bad? Well, you can find the currency conversion rates used by Mastercard and Visa online, so the math is quite easy to do.
On a card without foreign transaction fees, typically the “spread” you’ll find between the official conversion rate and bank conversion rate is somewhere around 0.1% (this cushion is built in due to account for the fact that transactions only post a couple of days later). Now, when you’re abroad you’ll want to always make sure you’re paying in local currency rather than your home currency, because if you pay in home currency you’ll get a bad rate. But that’s a choice.
Kevin says he likes to do this because he’s “cheap,” though last I checked, throwing money out the window isn’t cheap. Does he have cards that offer at least 2% cash back in Swiss Francs, British Pounds, Euros, etc.?
Because it doesn’t seem to me to make sense to use a card that “saves” you 0.1% on a transaction and forgo a 2% return in the process, no?
Why you should earn cash back
Kevin says the following:
“Forget about affinity points. There’s so much inflation in that. You get less and less every year for the points. Get the cash back.”
Okay, that’s not necessarily terrible advice, though see below. 😉
My credit card advice
I can appreciate the need to provide “simple” credit card tips when talking to the mainstream media, so I don’t blame Kevin for the lack of caveats he provides, since I’ve been in the same situation many times where there’s so much to say, but they just want one sound bite.
But this advice is just plain bad. It’s paranoid (suggesting only credit card information online can be compromised), it’s bad (having a card with a low limit and spending a significant amount on it harms your credit score), and it’s illogical (being “cheap,” and therefore getting a card in different currencies, rather than maximizing rewards on purchases).
So, what’s my simplified credit card advice?
- If you’re going to get a cash back card, make sure it has no annual fee and earns at least 2% cash back, like the Citi Double Cash® Card, which offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases (in the form of ThankYou points); don’t settle for less cash back than that (a vast majority of people do)
- To improve your credit score, open a few cards (they can even have no annual fees), hold onto them long term, make payments on time, and don’t utilize too much of your credit; having at least a few credit cards is good for your credit, as it helps you establish more positive history
- I agree in general to avoid putting your spend on an airline credit card (I’ve offered similar advice in the past), but often transferable points currency cards give you the best of both worlds and protect you from devaluations, as you can redeem points towards travel purchases, or transfer them to airline partners; so consider a card like the Chase Sapphire Preferred® Card or Citi Premier® Card (review)
Anyone have anything else to add?
Have at least 2 credit cards mainly so that if there is a problem with one, you have another. Also, only get cards with cash rewards points. Travel points are never a good option. I recommend one card with 2% cashback on all purchases. Another with 3-6% cash back at grocery stores and gasoline stations and one with 3% cashback at Walmart or the discount store of your choice. There are rotating rewards cards that...
Have at least 2 credit cards mainly so that if there is a problem with one, you have another. Also, only get cards with cash rewards points. Travel points are never a good option. I recommend one card with 2% cashback on all purchases. Another with 3-6% cash back at grocery stores and gasoline stations and one with 3% cashback at Walmart or the discount store of your choice. There are rotating rewards cards that some may find helpful although these require constant monitoring to know when the cashback rewards apply. Citi Double Cash MC 2%, AMEX Blue Preferred 3-6%, and UMB Visa 3% rewards at Walmart, Fast Food, Restaurants, Restaurants, and Grocery Stores. Should you wish to rent a car, use the Primary Insurance Coverage only offered by AMEX cards. These three cards will cover just about every purchase with at least 3% cash back with up to 6% at grocery stores. Get new cards that offer a bonus if you spend over a certain amount in 3 months, then time the new card so that you pay high ticket items and meet the 90 day requirement. Have one card that will double purchase warranties such as computers and other electronics warranties (AMEX Blue Preferred). Never buy another long-term warranty again...these are free with the right cards. Regards.
I will always select to be billed in local currency. The rates are better than the ones offered by the credit card. Also, the information is still shared digitally for in person transactions when the transaction is approved by the bank and is stored in the shop's database.
I also have a credit score of above 800, but banks still turn you down for so many other reasons, ex. chase 5/24 rule, to many recent requests for credit, etc. Seems more and more banks are doing that. Also Chase shut me down - all 6 cards in less than 24 hrs, saying that across my portfolio of cards, although no debt, I had 600k$ of open credit and to them that was a...
I also have a credit score of above 800, but banks still turn you down for so many other reasons, ex. chase 5/24 rule, to many recent requests for credit, etc. Seems more and more banks are doing that. Also Chase shut me down - all 6 cards in less than 24 hrs, saying that across my portfolio of cards, although no debt, I had 600k$ of open credit and to them that was a lot of risk. I guess they thought i could cash out and leave the country. In reality i think they audited my account and realized i'm not the kind of customer they could ever make a profit on- which i totally understand.
Dan
I don’t see how holding a bank account or credit/debit card outside from one’s permanent residence would make sense unless there was income or long-term property rental/ownership in the mix and one needs access to the local banking system.
Maybe the CNBC guy thinks Dynamic Currency Conversion isn’t a scam and that one has to choose USD when they present that option? I think he must be confused because using an American no-ftx card...
I don’t see how holding a bank account or credit/debit card outside from one’s permanent residence would make sense unless there was income or long-term property rental/ownership in the mix and one needs access to the local banking system.
Maybe the CNBC guy thinks Dynamic Currency Conversion isn’t a scam and that one has to choose USD when they present that option? I think he must be confused because using an American no-ftx card internationally is going to be cheaper than establishing an ex-USA bank account for like 99.99% of use cases.
I still keep my bank account from my parent’s origin country and it helped when I lived in Europe for a time because of the giro system (what replaced checks over there) was the only way to pay certain bills. It’s debit card has been helpful doing things such as buying train tickets at the machines in Schipol Airport and buying snacks on EasyJet where American cards were not working. I have to pay ~$40 a year for the card though, an international wire fee to send money there and do an odd online finCEN form each year.
That being said, the relatively new offline PIN system that can be set in online banking for Bank of America cards may have finally fixed the issue of American cards occasionally not working outside the USA. I was able to use my Bank of America Visa in a ticket machine in Spain, and for Apple Pay in the London Underground, where my friend’s same card who (I think hasn’t set up the PIN online) and another group of Americans were getting declined and had to use cash.
I wouldn't expect him to know or care about tracking little rewards. As for @TravelinDandy.... If this blog isn't for you, then it isn't for you. The average family can get a practically free vacay every year easily from reading these blogs. That's one more vacay than I had per year for much of my life. Now, I'm off multiple times per year.
How does one go about getting a foreign currency credit card?
That is if you aren't a billionaire shark.
@Drew and @DanielB, I totally agree. I also call this my hobby. It's 100% fun for me.
The hobby is more complex now that I'm a physician and have a little extra income to spend. But it was also important when I was a resident with no funds to spare. I used to like to fly BOS-PHX in February then to get a little break from winter. I remember signing up for the US Airways...
@Drew and @DanielB, I totally agree. I also call this my hobby. It's 100% fun for me.
The hobby is more complex now that I'm a physician and have a little extra income to spend. But it was also important when I was a resident with no funds to spare. I used to like to fly BOS-PHX in February then to get a little break from winter. I remember signing up for the US Airways credit card on that very flight while my spouse looked away in shame. But that single bonus got us round trip tickets on the same flight for the following year, free checked bags, etc. For us that savings was huge and allowed us to make it a yearly thing rather than a one-time thing.
Points are available to all!
Maybe the so-called 'credit' cards in foreign currencies he refers to are actually debit cards. Why he would need individual cards for each currency is a mystery, as most allow you to pre-load at least 10 currencies.
Well, O'L might know many things and be quite wealthy. But his knowledge on the credit card game, or even general use, is remedial. I find the game fun and enjoy it.... like a part time hobby.
Where else are financial companies going to give you $800 to $1,000 just to have you use their card? I have opened several high offer cards and with the points/miles, I have enough to fly free, and...
Well, O'L might know many things and be quite wealthy. But his knowledge on the credit card game, or even general use, is remedial. I find the game fun and enjoy it.... like a part time hobby.
Where else are financial companies going to give you $800 to $1,000 just to have you use their card? I have opened several high offer cards and with the points/miles, I have enough to fly free, and stay in nice hotels. Plus they paid for my Global Entry and one card credits me $300 for any travel cost. Another the same at $200. It PAYS to spend sometime learning the game.
I am a Canadian and I agree with a previous comment that many of us see KO'L as a self-aggrandizing Trump-like buffoon. That said, I want to point out that many of the things you post re: credit cards do NOT apply to Canadians. We do not get the huge sign-up bonuses for the branded cards in Canada as Americans do (very envious of that) nor can we get American cards or credit. The Canadian...
I am a Canadian and I agree with a previous comment that many of us see KO'L as a self-aggrandizing Trump-like buffoon. That said, I want to point out that many of the things you post re: credit cards do NOT apply to Canadians. We do not get the huge sign-up bonuses for the branded cards in Canada as Americans do (very envious of that) nor can we get American cards or credit. The Canadian AMEX SPG bonus is only 60,000 which is still 20,000 in old SPG points whereas you get around 90k or 100K I think down south. If we get a US dollar based RBC VISA which is through RBC's US division we forgo the rewards points we get on the Canadian card just to save on the currency so it is a trade off. Cash back cards, which you often pay for do work for many people, however, I am a Rewards Card guy and MANY THANKS TO YOU, have learned to use them more effectively despite lesser bonuses up here. I am a Certified Financial Planner and I am now teaching many of my clients to better us their Rewards cards THANKS TO YOU and optimize companion fare cards with carriers like Alaskan and Westjet which now allows the companion fares to be used in their new Premium Economy and Business Class. Thanks for all you do Lucky and if you can ever point out Canadian deals or credit cards I would gladly use your link to reward you for the service. I bet you have a lot of Canadian followers.
My husband is constantly asking me if all the time I spend on this is worth it. My answer: "Do you still want to fly business/first?" Because it ain't happening otherwise. My goal is essentially to get all our travel at least half off, which I easily achieve. (I can handle $1000-$2000 for business class to Europe, but not $4000+!) Of course that means he has to have labels on his cards and use the...
My husband is constantly asking me if all the time I spend on this is worth it. My answer: "Do you still want to fly business/first?" Because it ain't happening otherwise. My goal is essentially to get all our travel at least half off, which I easily achieve. (I can handle $1000-$2000 for business class to Europe, but not $4000+!) Of course that means he has to have labels on his cards and use the ones I tell him to use :-)
But it doesn't surprise me when people don't want to put this kind of time in. What *does* surprise me is when I can tell them *exactly* what to do to massively increase their return with one or two simple changes, and they still don't do it. For example, I have a friend who was thrilled to get the CSR when I told him about it. But he puts *all* his spend on it and won't get the $0 fee Freedom so he at least gets 1.5x on the non-bonused spend. He has 1 other card (Delta) and says 2 is enough.
O’Leary is entertaining but just a pitchman. For someone who is self-described as “cheap” that philosophy doesn’t apply when he is selling his branded “O’Shares” exchange traded funds with high fees. I’m sure if he put his name on a co-branded credit card his messaging will be quite different.
@drew I agree with a lot that you say except I believe on an hourly basis the (fun) time that I spend on this mikes and points hobby is actually greater than the amount I earn.
For instance I spent a frustrating hour on the line yesterday with Hyatt before I succeeded in applying the new 9000 points per night Premium Suite Upgrade to an upcoming stay. At first I questioned the use of my...
@drew I agree with a lot that you say except I believe on an hourly basis the (fun) time that I spend on this mikes and points hobby is actually greater than the amount I earn.
For instance I spent a frustrating hour on the line yesterday with Hyatt before I succeeded in applying the new 9000 points per night Premium Suite Upgrade to an upcoming stay. At first I questioned the use of my time- until I added up my savings- over $3000. I do OK but I don’t make $3000 an hour.
I’ve done a cost/benefit analysis in the past. Yes, the Points and Mikes game is a fun hobby I’ve engaged in for over 15 years. I really do enjoy the challenge. But if I didn’t believe I come out way ahead I don’t think I would devote the effort to it.
RE: the original post. In 100 articles in respected publications about credit/points/miles maybe 1 or 2 has accurate or worthwhile information and most (like this one) give TERRIBLE advice. Way to tank a credit score !
@Lucky. First, with respect to "having a card with a low limit and spending a significant amount on it harms your credit score", I am not sure your comment is correct (although the rest of your analysis is spot on). I believe your credit score is base upon credit utilization across all of your cards/credit not just one card.
As to advice on foreign currency accounts, if you are a US citizen, that is just...
@Lucky. First, with respect to "having a card with a low limit and spending a significant amount on it harms your credit score", I am not sure your comment is correct (although the rest of your analysis is spot on). I believe your credit score is base upon credit utilization across all of your cards/credit not just one card.
As to advice on foreign currency accounts, if you are a US citizen, that is just nuts. The reporting requirements for a US citizen or resident with foreign accounts are tremendous. In fact, may overseas banks will not even deal with Americans for that reason. Also, getting the funds to fund those accounts would be expensive from a foreign exchange standpoint. Generally, the least expensive way for most people to exchange foreign currency is with US card spending, and probably with a MasterCard.
Still, I agree that for most people cash back would make sense. In fact wish more people would do it so it will put pressure on the airlines/hotels to stay competitive and perhaps stop devaluing so much.
@Drew and @DanielB. I agree completely. Building some of my itineraries is like a giant puzzle. Both fun to do and a real mind game.
@Eddie. Agree. I have many cards, especially hotel cards (such as American Express Hilton Aspire) just for the perks or the free nights.
As to cards for spending, even if you do not spend that much (all relative), a Citi Prestige starting next year with 5X points can almost pay for itself with not a lot of spend (perhaps $7,000 might be the break even, if not lower).
Yes, the "advice" (sic) above is totally foolish.
But I also disagree with some of the posters here who claim that the miles/points game is only for the single/gay, and/or retired folks, who are willing to spend 20 hours a week studying our craft. Lets take the family of four mentioned above. Want to take all of them to Europe next Summer instead of just Disneyland? If each of the parents gets a Citi...
Yes, the "advice" (sic) above is totally foolish.
But I also disagree with some of the posters here who claim that the miles/points game is only for the single/gay, and/or retired folks, who are willing to spend 20 hours a week studying our craft. Lets take the family of four mentioned above. Want to take all of them to Europe next Summer instead of just Disneyland? If each of the parents gets a Citi AA card, and a Barclays Aviator card, that's usually around 240 total miles. Get one card at a time, and the minimum spend is $1K a month. Most even lower middle class families of four are going to spend at least that much on groceries, gas, various forms of insurance, utilities, medical services etc, most of which can be paid with a cc. Note that the cards I mentioned are no AF the first year.
I just picked a random itinerary, ORD-LHR, for next August. Four AA saver award seats are available on the same plane most days early enough in August to get the kids there and back in time for the start of school. Yes, they would have to go Economy, but only 30K miles pp each way, so those 4 ccs totally covers the flights.
Sure, London is expensive, but have you priced Disneyland lately? If instead they go out into the English countryside, stay in B/Bs, eat in pubs (yes the kids will be very welcome and comfortable there), and this whole trip becomes much cheaper than Disneyland. Not to mention far more educational.
If they can cover more than $1K a month in spend, or are willing to devote 2 years to this project instead of one, they can also pick up some hotel ccs to help out with housing costs in central London. Where many of the world class museums are free of charge.
Want to go to the EU instead? Easy Jet tickets from LHR to just about anywhere in the EU, booked well in advance, won't break the bank.
Probably 20 hours of study would be enough to plan this whole miles/points plan out. Planning the stay in Europe would take more time and effort than that.
So, yes, many OMAAT readers, myself included, are semi-professional Miles/Points game players who insist on FC flights, fancy hotels and gourmet restaurants. But busy parents, assuming a two parent family of 4, where both are employed, can indeed find the time to play this game, albeit at an Economy level. And it's a disservice to tell people like them that it's all just too difficult and time consuming for them to play.
"All credit card numbers can be exposed but the risk increases exponentially online. I don’t see an issue with his advice."
That is very 20-century statement. The card is much more secure with Amazon purchases then it is in your local car shop employing ex-convict with nothing to lose. Do people forget that credit card fraud was a thing waaaay before there was internet or online purchases? There is nothing in online process that makes...
"All credit card numbers can be exposed but the risk increases exponentially online. I don’t see an issue with his advice."
That is very 20-century statement. The card is much more secure with Amazon purchases then it is in your local car shop employing ex-convict with nothing to lose. Do people forget that credit card fraud was a thing waaaay before there was internet or online purchases? There is nothing in online process that makes it inherently riskier than paying at a local merchant (that uses online connectivity to get the clearance from your bank that you can afford purchase).
Any fearmongering about bad-online this and risky-online that is just preying on ignorance and it reminds me of all fear people imagined to justify burning of the witches in medieval times.
I wonder how he opens credit cards in foreign currencies. Yes, you can have a accounts in local banks in different countries but it is a total pain to open them and to keep them. I see he is not a US citizen but I would never open accounts in other countries just to pay purchases in local currencies. I tried to get a non prepaid cell phone in the UK and it is nightmare unless you have a bank account there, etc...
This guy is a total tool. How is he even getting credit card in different currencies? I assume he is implying he gets them from the country with that currency which is virtually impossible unless you actually live in that country. And then how does he explain not having to deal with the foreign currency when he's based in the US or Canada and earning money in dollars. Just makes no sense at all. So called "financial expert" my a$$.
@Lucky -
Those of us who follow this blog, i would assume, are responsible users of credit cards. I am sure all of us pay off the full balance every month, etc, and don't transfer balances, get cash advances, etc.
That said, most of America is not like us. Most of the country is up to their ears in debt and credit cards are the number one cause of layman bankruptcy.
Kevin's advice, while not...
@Lucky -
Those of us who follow this blog, i would assume, are responsible users of credit cards. I am sure all of us pay off the full balance every month, etc, and don't transfer balances, get cash advances, etc.
That said, most of America is not like us. Most of the country is up to their ears in debt and credit cards are the number one cause of layman bankruptcy.
Kevin's advice, while not ideal at all for people like us, makes a lot of sense for the average joe who lives paycheck to paycheck. Average folks out here in the country, for example, only really care about how high their monthly car payment is and really have no idea how much it really costs!!
It's to these folks who are stuck in dead end jobs with no hopes of really accumulating wealth that Kevin is preaching.
In all fairness (yes, I read that article and thought it was hilarious too), O'Leary did not advice people to cut up their credit cards. THAT advice (seriously, people, it's 21st century!) is horrible.
Also, in all fairness, not all countries have good credit cards as USA. For example, my wife is from India, and I swear it makes sense to have a low limit credit cards for online transactions. Reclaiming your money from an...
In all fairness (yes, I read that article and thought it was hilarious too), O'Leary did not advice people to cut up their credit cards. THAT advice (seriously, people, it's 21st century!) is horrible.
Also, in all fairness, not all countries have good credit cards as USA. For example, my wife is from India, and I swear it makes sense to have a low limit credit cards for online transactions. Reclaiming your money from an Indian credit card is a horrible process. My wife called 3-4 times, had to print out a claim form and filled it by hand (I kid you not; they don't even have Chase's online forms for insurance), then scanned and emailed it, then called a few more times to get action on that stupid form. Luckily, she caught the issue early enough (i.e. the charges were still pending). I don't want to imagine what would happen if she only caught it at statement time...
How would you max out a low limit $2000 cc on online purchases each month? What are you people buying? A hundred or so at most a month for the average Joe.
All credit card numbers can be exposed but the risk increases exponentially online. I don't see an issue with his advice.
O'Leary does not want to pay fx fees, so he has cards in those dominations, fair enough. You guys want multiple cards...
How would you max out a low limit $2000 cc on online purchases each month? What are you people buying? A hundred or so at most a month for the average Joe.
All credit card numbers can be exposed but the risk increases exponentially online. I don't see an issue with his advice.
O'Leary does not want to pay fx fees, so he has cards in those dominations, fair enough. You guys want multiple cards to collect points to spend more time flying in metal tubes breathing recycled air, other people would call that madness. Each to their own I say.
I bet outside of the hobby, "a lot" of people will agree with the guy. These people just mindlessly trust what media says and cannot think & judge for themselves.
If I were to ask a bank for a $2000 credit limit they’d probably cancel my card application for a number of reasons. A lot of TV personalities assume titles like “financial expert” because they appear on a show that is about finances. That’s like me characterizing myself as a “car expert” because I own two, rent many and drive daily, all over the world. Trust me, you don’t want my advice on cars!
Lots of cards in my drawer...and my credit score just hit 847!!! I know that means very little to me now but it's more like a high jump bar...I've nearly pushed the bar as high as it'll go!
This advice makes no sense. Did he forget about the Target breach? If someone had followed his advice and only used their “real” credit card at brick and mortar stores like Target it still would have gotten “hacked”.
The only times I’ve ever dealt with fraudulent use of my cards, the bank has contacted me directly to alert me to it. Their fraud detection is very good. Sadly, the risk in accepting credit cards is mostly on the merchants.
I cringed at that article. Then I thought about my dad, who has an AmEx platinum because of its reputation but doesn’t use any of the benefits except one time when he was in Houston and I directed him over the phone to the Centurion lounge. For him, the world of points and benefits and loyalty programs is one giant headache.
I understand the author’s interest in keeping finances simple. I wish he had given...
I cringed at that article. Then I thought about my dad, who has an AmEx platinum because of its reputation but doesn’t use any of the benefits except one time when he was in Houston and I directed him over the phone to the Centurion lounge. For him, the world of points and benefits and loyalty programs is one giant headache.
I understand the author’s interest in keeping finances simple. I wish he had given advice more like yours, though, to use one card for everyday spend and one for travel/foreign exchange rates.
What terrible advice. For years, I was brainwashed into thinking all credits cards with annual fees were bad. I lost out on an untold number of miles and benefits throughout the years because of this dumbed down advice. Thankfully I found blogs like this one that led me to the truth. Keep up the great work Lucky!
The points and miles “game” isn’t for everyone. Many people don’t want to put all their free time into understand the “game”. Between my wife and I, we have 19 credit cards and have annual fee of over $3,500 per year with the cards. Most normal people will consider it crazy but we consider it as part of the cost of our family travel cost per year (which we have been doing for years even...
The points and miles “game” isn’t for everyone. Many people don’t want to put all their free time into understand the “game”. Between my wife and I, we have 19 credit cards and have annual fee of over $3,500 per year with the cards. Most normal people will consider it crazy but we consider it as part of the cost of our family travel cost per year (which we have been doing for years even without the credit cards benefits). Our flying business class days are long gone after have a child and flying at the cheapest available fare is usually the way to go for us. We usually don’t consider using points on flight (there are a few exceptions - ex. LAX to HNL with Avios) because it cost way to many points for 3 people on a round trip. Rather, we usually use it on hotel stays. That’s why our credit cards are focus in hotels benefit rather then on flight. Hotels points can be “use” for the entire family (3 of us) with just one room of “free night”. Our UR points usually goes to Hyatt and our MR points would wait for a good promotion in order for us to transfer it. Everyone is different. This is the way we are playing the game right now. I would tell you if it is just my wife and I, I would most likely think the credit card game is a waste of time. Having a child changed the way we look at traveling. We see how much it would cost us more for just having one additional person in our trips. The “game” allow us to travel with our child with the same budget as a couple.
@TravelinDandy - I'd suggest looking at this from another angle. No, someone in your situation isn't going to be able to practically earn enough points for four tickets in CX F to Hong Kong. But 60k-70k points, redeemed towards airfare even at a penny a point, is probably enough, or at least close to it, to cover two tickets to LA to take the family to Disneyland if you plan ahead (half the cost if...
@TravelinDandy - I'd suggest looking at this from another angle. No, someone in your situation isn't going to be able to practically earn enough points for four tickets in CX F to Hong Kong. But 60k-70k points, redeemed towards airfare even at a penny a point, is probably enough, or at least close to it, to cover two tickets to LA to take the family to Disneyland if you plan ahead (half the cost if you want to look at it that way). It might take some time, but you can earn that number of points without paying any annual fees. I'd say that's some real value even for an average traveler, no?
@Drew. I totally agree with you, I feel exactly like what you are describing when doing this hobby. I, too love spending hours planning and searching for great itineraries, and when I succeed in booking those flight, I feel an enormous satisfaction. So on one hand, yes, if it gives us this pleasure/satisfaction, we should do it. However, in my opinion there is another benefit to being so involved in something like this hobby, even...
@Drew. I totally agree with you, I feel exactly like what you are describing when doing this hobby. I, too love spending hours planning and searching for great itineraries, and when I succeed in booking those flight, I feel an enormous satisfaction. So on one hand, yes, if it gives us this pleasure/satisfaction, we should do it. However, in my opinion there is another benefit to being so involved in something like this hobby, even if requires (just as you have said): " time I spend reading blogs, reviewing T&Cs, plotting out and tracking spending, monitoring multiple credit card and loyalty accounts....", and that is that scientific evidence is accumulating that people who constantly occupy their brain are less likely to develop Alzheimer's disease or other forms of dementia. (Regular physical exercise also does that though). So when I spend a considerable amount of time each day on this hobby, I reassure myself that with this I am looking after my health :-)))). My father had early onset debilitating Alzheimer's......
@DenB
I know that he likes having multiple credit cards. I'm asking IF he can have only 1 credit card, what would it be. I'm not telling him to cancel all of them except one. Just want his opinion.
Every time people talk about the 2% Citi card I feel compelled to mention the 2% Fidelity card (now under Visa). Your return is better because the money gets placed into a brokerage account (or other Fidelity approved account) so your "return" can potentially be a lot higher than 2% when it's all said and done.
@Drew Well said, on our experience as PointsMiles junkies (dealing with "civilians"in our lives) and on O'Leary.
What an idiot.
Having credit cards in a local currency doesn't do you any exchange rate good unless you're earning money in those local currencies to pay them off. Otherwise you're going to have to pay them off with an account holding your "home" currency and you'll take a bigger haircut on the exchange rate then.
I consider the pursuit of points and miles to be a very entertaining and rewarding hobby. I have always loved airplanes, airports, hotels, the entire infrastructure of travel, and also love making complex rules work to my advantage. Plus the rush from boarding an international first or business class flight for which I have paid next to nothing directly out of pocket, or getting upgraded to a really nice suite at a resort or top-tier...
I consider the pursuit of points and miles to be a very entertaining and rewarding hobby. I have always loved airplanes, airports, hotels, the entire infrastructure of travel, and also love making complex rules work to my advantage. Plus the rush from boarding an international first or business class flight for which I have paid next to nothing directly out of pocket, or getting upgraded to a really nice suite at a resort or top-tier urban hotel, is more than worth the strategizing to accumulate the necessary points and/or miles.
That said, if I add up all the time I spend reading blogs, reviewing T&Cs, plotting out and tracking spending, monitoring multiple credit card and loyalty accounts, I doubt very much that I come out ahead on a $/hour basis. It's just that for me, the "effort" involved is not an effort at all -- it's a lot of fun.
I have many friends and colleagues who simply can't be bothered, because to them the effort would be a nuisance, and would detract from time they'd rather spend doing something else. They have cash back cards and leave it at that. And by some metrics they may come out ahead of me, so good for them. But even those folks would see the flaws in O'Leary's "advice", because they are sophisticated, not simplistic, about minimizing fees. And BTW, does O'Leary maintain bank accounts in each of the currencies in which he has credit cards? If not, doesn't he end up paying an exchange fee anyway when we pays the balances with USD (or CAD)?
SImplification is not equivalent to stupidity or lack of sophistication. O'Leary's advice is faux simplicity that's actually pretty cumbersome and complicated.
@TravelinDandy you are right that this milieu is aspirational and that some have much higher access to the goodies than others. There are good blogs elsewhere focusing on the "game" for families with children and some of the presenters at the meetups and events focus on this aspect too. You're part of a significant group of people and there are answers and lots of blogging for that niche. OMAAT is not focused on this specialty...
@TravelinDandy you are right that this milieu is aspirational and that some have much higher access to the goodies than others. There are good blogs elsewhere focusing on the "game" for families with children and some of the presenters at the meetups and events focus on this aspect too. You're part of a significant group of people and there are answers and lots of blogging for that niche. OMAAT is not focused on this specialty and for me (single, gay, solo traveler in retirement) OMAAT is solid Gold. OMAAT would be Platinum content for me if it weren't so American.
It's not a coincidence that childless (often gay) or retired people are a big part of this game. The game is, as you say @TravelinDandy, best suited to people who travel solo, have schedules that aren't locked into school holidays, can travel anytime.
Haha well, as they used to say to gay people like me, "You chose that lifestyle!".
I believe that the best and long term profitable business deals are which both parties benefit from. In this case, Lucky, his colleagues, and several contributors of his "Ask Lucky" forum, as well as several commenters provide great advice on how to play this game. Since I personally benefited from those pieces of advice tremendously in the past, I always apply for my credit cards through Lucky's links. I feel that is the minimum I...
I believe that the best and long term profitable business deals are which both parties benefit from. In this case, Lucky, his colleagues, and several contributors of his "Ask Lucky" forum, as well as several commenters provide great advice on how to play this game. Since I personally benefited from those pieces of advice tremendously in the past, I always apply for my credit cards through Lucky's links. I feel that is the minimum I can do to help his great work.
Just to give one example about how much I benefited: I learnt from this website about the (back then) $400 AARP discount. I signed up, and a month later when there was a great promo to Europe, I bought 4 tickets and saved $1,600. And that was because I read the blog. Also, Lucky prominently displays those disclaimers everywhere, so we all know the deal.
Of course when you had $4 billion you probably aren't going to care about the same things we do! But still really bad advice...
O'Leary's advice seems more eccentric than anything else. Which I'm assuming he is, based on his TV persona. I'd have a hard time believing he was a totally down-to-earth guy.
However, would take exception with those defending the points-and-miles "game". Even as someone who does it, I see how its not applicable for, perhaps, the vast majority of people. My wife and I live in NYC. She's a school teacher on the higher end...
O'Leary's advice seems more eccentric than anything else. Which I'm assuming he is, based on his TV persona. I'd have a hard time believing he was a totally down-to-earth guy.
However, would take exception with those defending the points-and-miles "game". Even as someone who does it, I see how its not applicable for, perhaps, the vast majority of people. My wife and I live in NYC. She's a school teacher on the higher end of the pay scale. After all taxes are taken out and we pay all of our bills that can't be paid by credit card (or its not the best option i.e. rent/student loan payments) we really don't have that much real money to spend. Even if we maxed out all of our spend on 2x back categories (mixing in some 5x) there is just no way we could earn more than 60K to 70K in points in any given system. Which sounds ok, until you realize we are a family of 4 and need 4 airline tickets every time we fly, larger rooms at hotels, etc. In reality, once you get past the sign-up bonuses, unless you bust your butt MSing, are a road warrior with quite a bit of reimbursed business expenditure, or are just way above average on the income scale, the "game" is just too much effort for too little reward for most.
I'd love for Lucky to make a separate post talking about the incomes and jobs of most of the people who achieve Diamond/Platinum/etc. All of these blogs, in the end, are advertisements for aspirational lifestyles. Nothing wrong with that, and I still enjoy them. But it would be nice to see a little humility from the Points-and-Miles crowd now and then.
@Freddy it's reasonable to be sceptical but your comment is too critical.
Consider the big picture: there's an ecosystem consisting of cards, welcomes bonuses, commissions to bloggers and other online publications, that delivers real value to us.
@Freddy, how to solve the problem you're citing? If you don't trust Lucky's enthusiastic advice today to get the Ink card with the 80,000 bonus, what, exactly, will you do to protect yourself from this self-serving evil trick...
@Freddy it's reasonable to be sceptical but your comment is too critical.
Consider the big picture: there's an ecosystem consisting of cards, welcomes bonuses, commissions to bloggers and other online publications, that delivers real value to us.
@Freddy, how to solve the problem you're citing? If you don't trust Lucky's enthusiastic advice today to get the Ink card with the 80,000 bonus, what, exactly, will you do to protect yourself from this self-serving evil trick by OMAAT? Basically you have a binary decision: apply or don't. Did you already know about this card? Have you made the analysis and the comparisons Lucky shares with us? Have you reached different conclusions from his?
It comes down to the quality of the advice, more than the motive behind it. Anyway, I believe Ben's claim that he advises in our interest, notwithstanding the commissions he openly discloses. If you don't believe his claim of impartiality, I respect your choice but I think you've judged him and his enterprise unfairly.
@Freddy, no idea what you are talking about.
Yes there could be "optimization" if someone was willing to go to 5-10 card stacks. But the purpose of this article was to specifically counter O'Leary's "advise" on "simplicity". I don't see how any of Lucky's card mentions here are wrong in any way.
And what would be the advice if you deduct the commission you get for pushing specific card/s? Looking at your suggestions, it follows the same pattern as most of the US based pushers - and changes with the cut you make.
@chub I'd call this The Wrong Question. Lucky advises that one should have more than one card.
"Kevin says he has eight credit cards." Don't do as I do; do as I say. Lame advice from a hypocrite and true politician.
@Lucky
Here’s a question for you:
IF you can have only ONE credit card, which one will you choose? For me, It’ll be the Chase Sapphire Reserve.
He is simply misinformed on many things. Oh well.
O'Leary is a camera-loving creep. He's Canadian, with a higher profile in Canada than in the USA, for his time on Dragons Den, the British/Canadian show copied later by Shark Tank. He even tried to run for politics in Canada but he flopped.
O'Leary is like the American President, in that he's not the ideal person to consult, if you want the simple soundbite to actually be true. There isn't the slightest chance O'L would...
O'Leary is a camera-loving creep. He's Canadian, with a higher profile in Canada than in the USA, for his time on Dragons Den, the British/Canadian show copied later by Shark Tank. He even tried to run for politics in Canada but he flopped.
O'Leary is like the American President, in that he's not the ideal person to consult, if you want the simple soundbite to actually be true. There isn't the slightest chance O'L would take time to analyze the subject, or read blogs like this one, to gain knowledge, before obtaining credit cards. He would bark at a minion "get me cards in Brazil, UK, USA and Australia, and make sure there's no annual fees! Or you're fired!!!"... "Oh, and get me on TV to give advice about credit cards!"
He's very entertaining on Shark Tank because he's mean to people, but always has a plausible backstory for his unnecessary cruelty. Sound like anyone we know? Canadians mostly see him as a buffoon.
He was my favorite shark too...
As long as the masses continue to get bad advise, the rewards game can continue. If everyone did as you do, Lucky, the game would be over pretty quickly.