Credit Card Usage Strategy for Someone Who Isn’t a High Spender

In response to Tuesday’s post laying out my personal credit card spending strategy for 2012, reader Andrew writes:

Gary, can you please write a post laying out a credit card strategy for those of us who don’t spend mega dollars in a year? Even with some reimbursable business spend, I’m probably not going to spend more than 50K this year, and it seems silly to split up that spending across, at minimum, three cards (as you suggest). Getting 15,000 or 20,000 points per card per year isn’t getting my wife and I closer to award travel very quickly.

I replied briefly in the comments, but will share my take on this as well.

My post was about my own personal situation which I described, and I absolutely recognize that it doesn’t apply to plenty of people — either because they don’t have nearly as much reimbursable expense as I do or because they simply won’t follow a ‘complicated’ strategy with lots of different cards for lots of different purposes.

But scenarios are far more common than mine! And having one or two go-to cards makes sense for most people. No reason to follow an overwhelming strategy, it’s best to start off simply.

And what I like more than anything is flexibility when it comes time to redeem points. Remember that everyone’s reward goals are different, different points are better for different sorts of awards (Delta is actually good for Australia and Europe, the latter especially if you live in an Air France gateway city… American is great domestically and for South America… United and US Airways are phenomenal for Asia). And of course award charts change, partners change, and you don’t want to spend time building p points in one account only to find that the rules have changed on you when it comes time to redeem.

For most situations I’ve been recommending the Starwood American Express (for general spend) and Chase Sapphire Preferred (for everywhere that doesn’t take Amex, for travel and restaurant spend, and for spending outside the U.S.).

If only one card makes sense I’d probably go with the Chase Sapphire Preferred Visa because as a Visa so it’s useful most places and bonuses plenty of spending.

I laid out the value proposition extensively for the Starwood American Express back in mid-December. But in short the points transfer to most airline programs, they transfer with bonuses so it’s often better to use the Starwood card than each airline’s own co-branded card, and the points are also valuable for hotels. Basically a good all-around go to card for everything except accumulating United miles.

Back in November I offered a full analysis of the Chase Sapphire Preferred, calling it the king of credit cards.

  • 40,000 points as a signup bonus (after $3000 in spending on the card within 3 months)
  • Points transfer to United/Continental, British Airways, Southwest, Korean Airlines, Amtrak, Hyatt, Marriott, Priority Club, and Marriott.
  • Double points on all travel and all restaurant spending
  • No foreign currency conversion fees on purchases, so you save 3% on everything when you are outside the U.S.
  • 7% annual bonus on all points earning, including on the signup bonus

Now, some specific situations could well dictate another card. If you’re intent on elite status with a particular airline, and spending on that airline’s card provides you with elite qualifying miles, it could make sense. All sorts of things we can do to complicate the equation!

But for more readers who have limited spend, I’d recoomend the Starwood American Express and the Chase Sapphire Preferred Visa. And for folks only going to focus on one card, I’d make it the Chase Sapphire Preferred Visa.

For someone who wants to complicate things a little bit, they might consider using their limited spending for meeting the signup bonus minimum spending on various credit cards with big upfront bonuses. That will be the subject of another post. But I’d consider the best current bonus on a card to be the 40,000 Chase Ultimate Rewards points given for the Sapphire Preferred Visa in any case!

As always, the links above are for the best offers I’m aware of. If you use them, I’ll receive a referral credit. You don’t need to use my links, but I very much appreciate it when you do.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Gary,
    You have been so helpful!
    I wrote you earlier, I believe, and after reading all your advice, I forwarded you info to my husband.
    As we are going to Europe this March, I suggested to him that sign up for the CHase Sapphire Preferred Visa on your link.

    I could have kicked myself when I learned that he went ahead a got the card, but since he already had a Chase account, he wasn’t eligible for 50K sign up points, although they did way the fee for the first year on this card’s upgrade. I told him we should have put the card in MY name and gotten the points. But alas, he’d already done the deed.

    We have the Delta AMEX versus the Starwood one because we live in Atlanta and can almost exclusively fly Delta, and this card gave me Medallion status.

    Any suggestions?

    Thanks again for all your great advice.
    I follow you and my Tweet Followers Now also follow you.

  2. Since I only spend at most $1,500 a month outside of my mortgage and student loans I am in a similar position. I am pretty new to getting credit cards for bonuses, but over the next five months I will be able to hit the minimum spend on the 7 cards I just got approved for totaling 395,000 miles/points. I know this may be a little bit more work than Andrew is willing to do, but that is far more miles or points than I could ever get simply by using one card for purchases.

  3. Your blog has become incredible in the past few months (as opposed to being “merely” very good previously). Thank you for stepping it up.

  4. @sherry you need to spend what you need to spend to earn elite status, i understand that. but honestly if you’re just getting Silver then you get the basic benefits of that with the Delta reserve card and I’d put my actually spending somewhere else…. like Sapphire or the SPG Amex…

  5. Just got my 2012 tax bill. A 2.49% “convenience fee” is added for using a credit card. Is there any point to using a card when such a steep fee is added? I don’t have any new cards on which I need to meet the spend threshold

  6. How about a blog post comparing the number of posts about credit cards now vs when you weren’t taking commission checks?

  7. @Phil I’ve recently posted a lot of context on my experience with receiving a credit for applications. I fully disclose in each post in addition to disclosing on the about me page. I’ve also received some of the most positive feedback I’ve ever gotten, bar none, about my credit card posts — because the world of credit cards can be confusing, but it’s also the single most lucrative opportunity for earning huge amounts of miles quickly and at low cost. I’ve said that I do write about credit cards more, because I think about credit cards more, and I think that’s to the betterment of everyone all around. And seriously we’re talking less than 10% of posts each month.

  8. @JA there are a few services that charge a slightly lower (~ 2.2%) fee. And that offer lower fees on DEBIT card transactions if you have something that rewards you at all still. It’s not generally worth it, except:

    (1) Chase AARP card which offers 5% cash back unlimited for first six months, you’ll ned 2.5%
    (2) to meet spending thresholds that trigger a big bonus or benefits like elite qualifying miles

    But not just for the miles.

  9. Not sure if everyone realizes that the Chase Shapphire card can be either a Visa or MasterCard. They normally send you a Visa but since since Sam’s Club only takes MC or Discover we called Chase and they reissued the card as a MasterCard.

  10. On the Sapphire, do you know if you can transfer UR points to the UA account of someone else? That would make it even more valuable.

  11. Gary,

    Personally, I’d pay the 2.2% fee if I’m using my SPG AmEx card. Possibly on the Chase Sapphire as well.

  12. I agree with you 100% that the SPG AmEx and Chase Sapphire visa are the 2 best cards for general spend and for those who choose to keep things simple.

    As someone without reimbursable expenses and who spends maybe $20k-$25k on credit cards/year, my strategy is mostly to go for sign up bonuses, complete their minimum spend, and then go for the next sign up bonus. Most cards have shifted from a “first purchase” to a “$2500-$5000 spend” to get the bonus miles/points. Hence, my strategy has shifted similarly.

    While 25k SPG or Sapphire points are great, I’d rather use my spend for 300k bonus points, even if across several programs. 😉

  13. With so many cards offered now, it’s a luxury to be able to have enough spend to do more than just the minimum on each one. I struggle to just get through them all. This is with *real* spending and not resorting to churning cash equivalents or payment services. Not a bad problem to have though 🙂

  14. Gary, I don’t begrudge you taking the affiliate money. You deserve to get paid for your advice and analysis, and you held out the longest of all the travel bloggers in doing so.

  15. Thanks for your great info. As my understanding, you will keep both cards and pay the renewal annual fees.

  16. @yen I do have both cards, I have had SPG Amex for years and pay the fee each year. I will keep Sapphire Preferred and pay the fee on that as well.

  17. Gary, it’s great to know that you can transfer UR points to someone else’s MP account. Is this also true for Starwood Amex? (I know the transfer rate is bad, but it could be a convenient way of keeping an infrequently flying companion’s miles from expiring.)

  18. @UAPhil – no, Starwood is going to require that names on accounts match for transfers. However Starwood does allow sharing points with other people at the same residential mailing address. So you could move STarwood points from yoru SPG account to a spouse’s, then from the spouse’s SPG account to their mileage accounts.

  19. Gary, thanks for this post. Your readers point out that everyone can’t spend at high levels and it’s also true that they don’t need the same level of quality. You travel a lot–it’s your job to do so and a nice room, good bed and good shower doesn’t cut it on an ongoing basis. So I think your readers understand your writing for a broad spectrum of card users.
    I can identify with the need to use just a couple providers or those who are flexible to my ultimate goals, like Chase Sapphire. But we have been experiencing generous mile offerings and I became addicted late—mid April 2011. and with good credit have acquired 16 cards in 6 months and 900k miles and points I missed the mega offers pre-May, ’11. Being a senior, traveling alone and not sure how to use the miles for tours, there are still challenges to overcome but you blog and several others are a help. Thanks

  20. Gary and others,

    Any good recs for obtaining hotel points? I have ~900,000 miles on AA,BA and US Airways but only about 60,000 pts on a variety of hotels (starwood, hilton,hyatt, marriott).

    I’d like to reduce the costs of a future (fall?) trip to Europe (central) as much as I can and with hotels typically being $200+ per night, free nights would help a lot.

    I do have a LLC but the expenses are minimal (strictly for a rental property) so unless the cards give bonuses w/o spending it won’t help much.

    Personal expending may be on the high side due to buying a fixer upper home (hence the need to reduce travel costs), especially if I get contractors who take credit cards.

    Thanks for any tips or links to blogs/articles about this. During my cross country move I haven’t been able to keep up with my blog reading.


  21. @rich – I just applied for and received a Hilton Amex at 60K and Hilton Visa at 40K. There is the Hilton Surpass card which is another option. I also ended up getting both Hawaiian cards – one through BofA and one through Bank of Hawaii. Both of those result in 35K miles after the minimum spend. Those 70K Hawaiian miles transfer 1:2 to Hilton. Total Hilton points from 4 cards = 240K.

    Not a ton, but it was the only way I saw to work out a decent number of nights since I don’t travel enough for work to earn them on my own.

  22. @rich Chase Sapphire Preferred transfers to Hyatt, Marriott, and Priority Club. 50k Hyatt is a good signup bonus. I’d say it’s better than 70k Marriott. And better than 2 free Hyatt nights from the Hyatt Visa. I think it’s the best hotel bonus out there, actually…

  23. Rich – for spend, I strongly recommend the Starwood Amex. You can usually get at least 2 cents per dollar spent; often 4 cents or more for “cash & points” awards. The effective points value per dollar of general spend on Hilton’s card are much lower. (For signup bonuses, others are better qualified to recommend.)

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