You’ve gotten over the mental hurdle and have decided that you can indeed commit to getting one (or multiple) credit cards to help you see the world at prices you can afford. Now you want to make sure you’re maximizing your return. To do this, we need to look at what each card earns when we take it out of our wallet.

Let’s not forget, one of the first things mentioned is that “a point is not a point is not a point.” Just because a card earns two miles for every dollar spent, that doesn’t mean it is the card we want to pull out of our wallet all the time. To illustrate what I mean, let’s look at my current three favorite credit cards:

• Starwood Preferred Guest Credit Card from American Express (2X points at all Starwood properties – I value these at 2.2 cents each)
• Chase Sapphire Preferred Card (2X points on dining & travel – I value these at 1.7 cents each)
• Barclaycard Arrival™ World Mastercard (2X miles on all purchases – I value these at 1.1++ cents each)

Deciding which card to pull out of my wallet depends on several things. Keeping in mind that I carry no less than 5 cards in my wallet at a time and have over a dozen more at home, the process I go through may be more (or less) complex than what you do, but I want you to have a reference point:

1. Will it cost me additional money to use a credit card versus cash? Some vendors may offer a cash discount or, if traveling internationally, there may be a foreign currency fee associated with any transaction. If it costs me money to earn points I’m likely to not use my card, as the value of points earned wouldn’t likely outweigh the cost to earn those points. For my three cards listed above, only the Starwood card charges a foreign transaction fee. If I am out of the United States (even at a Starwood property where I earn 2x points for using this card), I won’t be using this card due to the 2.7% foreign transaction fee.
2. Which points/miles do I need the most of right now? Remember, we need to keep our travel goals in mind and what points we need to achieve that goal. If I can earn 2 points using the Chase Sapphire Preferred Card for booking a flight with American Airlines and I can also earn 2 miles for using the Citi AA Mastercard and I desperately need AA miles to book an award ticket, I would use the AA Mastercard. If I only earned 1 mile with the Citi and 2 points with the Chase card, but I really needed those AA miles, I still might forego what is better in the long-run to make sure I can achieve my goal of booking that AA award ticket. Again, we always need to keep our eye on the prize. What is our goal?
3. How much value do I get out of the points I’m earning? I place a value on each point and mile that I earn, and that value helps dictate which card I use when making a purchase. All other things being equal, assuming I don’t need any particular type of point/mile right now, the raw value I’ve assigned to the point multiplied by how many of those points I earn per dollar spent, is what I use to decide which card to use.

(Slight tangent and some math: The value of a point or mile that I place on it has a direct correlation to what I’d otherwise pay in cash for the equivalent product, plus any intangible emotional value. Just because I may be able to use 10,000 Starwood points to stay at a property that has a nightly rate of $900, that doesn’t mean I value each SPG point at 9 cents, nor does it mean I would otherwise spend $900 for a single night. Sure, it effectively works out that I didn’t have to spend $900, but did I get $900 in value? For me personally, I don’t know if I would ever spend $900 a night on a hotel (unless I won the lottery). I’d much rather get 4 nights at a $225 a night hotel, or 6 nights at a $150 a night hotel! Does that $900 room get me access to a once-in-a-lifetime view of Times Square at New Years, or a view of the ocean like none other? Maybe it’d be worth the splurge for that intangible, but don’t get caught up in the list price of a hotel room or airline flight if you wouldn’t otherwise normally be okay with paying cash at that rate. Now, back to business.)

As we look at Maximizing Our Benefits with Credit Cards, we need to be aware of how many points or miles a card earns for a specific transaction. Keeping the above principles in mind, our strategy dictates that we must identify where we spend our money and figure out which cards to use for each of these transactions.

For the three cards I use for most all of my spend, here is how I use them and some reasoning behind those decisions:

• Starwood Preferred Guest Credit Card from American Express – Currently I only use this card at Starwood properties in the United States. This card used to be my #1 go-to card for all purchases (except foreign purchases), but I found that my point balance with Starwood was always relatively high. I wasn’t earning my points and then redeeming (or burning) through all of them. My goal is to earn and then use them; having a large bank of points that I’d never make it through means that while I’m earning plenty, I’m not using them as I think I would. Either I need to use more of the points or I need to adjust my strategy. The latter is what I choose to do.
• Chase Sapphire Preferred Card  – When this card was introduced a few years ago, it became the must have card and I quickly agreed. Its point program, Chase Ultimate Rewards, is extremely flexible, allowing for free point transfers to many partners or to book travel directly. The card itself, while carrying a $95 annual fee after the first year, doesn’t charge any foreign transaction fees and earns 2X points on all dining and travel.  As someone that dines out quite often and does quite a bit of travel, this card is a must have for me. I use it for all of my dining expenses and for most of my travel. I still use the SPG card for domestic U.S. stays with Starwood, but can’t turn away double points for all my dining and travel that the Sapphire card offers, especially when I’m out of the country.
• Barclaycard Arrival™ World Mastercard – This is the newest card I carry on a regular basis and represents a shift in how I use my cards. This card has its own proprietary miles program where you earn 2X points on all transactions. Each point is worth 1 penny so I’m essentially earning 2 cents for each dollar spent, or 2% back. The nice thing about this card is it also carries no foreign transaction fees and when I redeem points for travel, I get 10% of my points back. So a 20,000 miles redemption would only have a net cost of 18,000 miles. Keep in mind, these “miles” are not the same as airline miles. They are effectively cash in your travel bank that have been given the label of “miles” by the bank/award program. You can use these for any item you charge on the card, but only travel expenses get you 10% back. I made a shift to this card last year and am thrilled with it. It provides me additional flexibility and diversity in my travel bank. Cash is the most diverse instrument and it provides me just enough to cover expenses I often don’t think about or overlook, such as trains or connecting one-way positioning flights. I value these points at 1.1+ because they provide a bit of an emotional value and because they function like cash. So if I when I use these “miles” to book travel, I still earn airline miles and hotel points. Their true net value is 1.1 cents when I redeem for travel, but knowing that they are there provides a safety net to me.

In addition to my personal use, we’ve put together a series of posts on which cards earn the most points at specific shopping destinations. Take a look at see what you could be earning with different cards at: Grocery Stores, Gas Stations, Dining, Home Insurance, Cable Television/Internet/Phone, Drug Stores, Office Supply Stores and Rent/Mortgage Payments.  Figure out where you do most of your spending and make sure you’ve got a card that is earning you 2X, 3X, 5X or more each time you swipe your card.

I have friends place post-it type stickie paper on their credit cards to tell them what card to use where. You decide what works for you. The more you understand the points you earn, where you earn bonuses and where you intend on redeeming those points, the better equipped you will be to earn the most points you can every time you take out that card and swipe.

More Rookie Guide:

1. Introduction and Background
2. Set Your Goals
3. Points, Miles and Credits
   1. Airline Miles
   2. Hotel Points
   3. Rental Cars
   4. Bank Rewards
   5. Vouchers and Credits
4. How Your Good Credit Can Help You Travel For Free
   1. Myths & facts
   2. Monitoring your credit scores
   3. Maximizing your benefits with credit cards
   4. 2x, 3x, 5x category bonuses
5. Airline & Airline Alliances
6. Hotels & Their Programs
7. Program Partnerships
8. Saving with Consolidators
   1. Priceline
   2. Hotwire
   3. Expedia Express & Others
9. Double and Triple Your Bonuses with Online Shopping Portals
10. Earning Without Even Thinking About It
    1. Rewards network dining
    2. Plink and Others
11. Keeping Track of All These Points and Miles
    1. AwardWallet
    2. FTG Wallet
    3. Spreadsheets Galore
12. Review Your Goals

Howie Rappaport As a kid travel meant hopping in the family station wagon and spending a day at the park or the beach. Everyone got older and longer trips were possible; yes that meant driving from New York to Orlando...
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• Points Breakdown

Chase Sapphire Preferred® Card

• Annual Fee: $95 fee waived for the first year
• Foreign Fees: No
• Card Type: Bank

Apply Now
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• Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
• Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
• 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
• Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
• No foreign transaction fees
• 1:1 point transfer to leading airline and hotel loyalty programs
• Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
• No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards

Breakdown

Earn (pt.)

Spend

First 3 months

50,000

$4,000

Travel Purchases

2.00

$1

Restaurants Purchases

2.00

$1

Coffee Shops Purchases

2.00

$1

Fast Food Purchases

2.00

$1

Alcohol & Bars Purchases

2.00

$1

All Purchases

1.00

$1

Already have this card? Track it and maximize your rewards.

Chase Sapphire Preferred® Card

• Annual Fee: $95 fee waived for the first year
• Foreign Fees: No
• Card Type: Bank

Apply Now Add to Favorites

FTG Review	Reward Breakdown	Points Breakdown
Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards® Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases. Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening No foreign transaction fees 1:1 point transfer to leading airline and hotel loyalty programs Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards Breakdown Earn (pt.) Spend First 3 months 50,000 $4,000 Travel Purchases 2.00 $1 Restaurants Purchases 2.00 $1 Coffee Shops Purchases 2.00 $1 Fast Food Purchases 2.00 $1 Alcohol & Bars Purchases 2.00 $1 All Purchases 1.00 $1 Apply Now
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