Determining The Value Of Your Credit Card Rewards Points

Honolulu, HawaiiI’ve only got one personal credit card and that’s my Discover rewards card. I like concentrating all my spending on one card so I can get maximum points to buy things like a home theater system, nights at the Halekulani Hotel, gasoline cards, and tennis racket grips!

Credit card reward points have value and like anything with value we tend to hoard. I know plenty of people who never use their reward points for years, only to see the cost of things skyrocket. Worse yet, some credit card reward programs expire after so many years.

My favorite example of a rise in rewards points cost is a round-trip ticket to Hawaii from California. Over the past 12 years, I’ve gone to Hawaii over 20 times. It’s a direct 4.5 hour flight from San Francisco, and I absolutely love it there for obvious reason. If any readers want to meet up in Honolulu the second half of April let me know!

Before the year 2000 it cost 25,000 points for an economy class round-trip ticket valued at roughly $350. In other words,  it took 75 points to buy $1. In 2013, the same flight now costs 35,000 to 50,000 points depending on the time of the year. Meanwhile, you can get tickets during the off season through Hawaiian Airlines, Alaska Airlines, or United for just $300 from San Francisco! It now takes ~120-170 points to buy $1.

Not only does it now take 60-100% more points to get a similar ticket, the cost of directly purchasing a ticket has stayed relatively flat. As a result, whenever I can purchase a ticket for less than $350 to Hawaii, I do so without points.

CALCULATING THE VALUE OF CREDIT CARD REWARDS POINTS

Who Should Get A Black Card? Probably Not You!

Visa Black Card CommercialThere once was a time I was rich, but never famous as I traveled internationally four times a year for business. Each destination hosted loads of other folks who wanted to learn about the next money making idea in the global financial markets. With me was an American Express corporate card where I could expense relatively freely to the tune of ~$50,000 a year. The card provided travel insurance, access to airport lounges, concierge services, and more. 50K may sound like a lot, but that’s nothing compared to the hundreds of thousands in expenses I hear from some Black Card spenders!

I don’t have much coming in anymore, but I do have a lot of freedom. It’s a tradeoff many will take at some point in their lives. Given my desire to simplify things, I’ve only got one personal credit card, which is the Discover it credit card There’s no annual fee and all my spending is concentrated here to maximize my rewards points.

Since we live in the land of consumerism where we want things and we want them now, I thought it’d be a good idea to do a post for all you Black Card aspirees out there. Some get Black Cards just for its status symbol. Meanwhile, other people are a little less vain and use their Black Card for better access and service. Whatever the case, I’d like to introduce my guidelines for those who can and should not get a Black Card.

SHOULD YOU GET A BLACK CARD? LET’S SEE IF YOU QUALIFY

How To Get The Lowest Price Guarantee: The Citi® Price Rewind Program

Tiffany's BoxI’ve been purposefully avoiding the topic of spending given the bombardment about holiday shopping. Buying things we don’t need is not exactly a path to building wealth. What’s more, I dislike buying things only to see them drop in price soon after. It makes me feel like a dummy!

That said, I’ve got needs too baby! Thankfully, my rewards credit card just got a little better. I’ve been a Citi ThankYou® Preferred Rewards Card user for the past eight years because of their comprehensive rewards program. Everything is linked up to my online account where points accrue like clockwork every month. My goal is to focus as many accounts and assets with one bank as possible to maximize the benefits.

Just in time for the shopping season, I got an e-mail from Citibank highlighting their new Citi® Price Rewind Program. I’ve been waiting for such a program for a while now. When you shop with your Citi ThankYou® Card, simply register your purchase and Citi will search retailers for a lower price for 30 days after your purchase date. If the price drops more than $25 in that time, you’ll be notified by email that you’re eligible to receive a refund!

The theme is, “You do the shopping, Citi® Price Rewind does the shopping around.” Smart!

Everybody wants the lowest price possible, but seldom do people spend enough time searching. When I see something I like that’s priced fair enough, I make a purchase. I can’t be bothered with spending more than 10 minutes trying to save $25 bucks even though I feel stupid when I see a price drop after. By registering my purchase, I don’t have to search anymore.

MY POTENTIAL HOLIDAY SHOPPING LIST AND SAVINGS EXAMPLE

Don’t Let A Credit Card Rewards Program Change Your Spending Habits

Nike Air Trainer I

The retro Nike Air Trainer 1 for $110. Tempting to buy with my credit card!

I used to receive a ton of credit card solicitations in the mail until I finally put my address on the do not spam list. Some of the offers really tried to suck people in, such as 6% cash back on groceries, or 3% on gas. Gas and groceries are the two unavoidable expenses for almost everyone and it is brilliant for credit card companies to target these two items.

Even though I have a small monthly grocery bill and only drive about 6,500 miles a year, I was tempted to sign up. The “spend more save more” mentality started taking hold! Then I read the fine print about the 29.99% APR, the limitation on how much I could get back, and the late penalty fee and decided not to sign up. The rewards program didn’t match my lifestyle.

If you are a family of five who spends $1,000+ a month on grocery and commutes 50 miles to work everyday, you probably will benefit the most from a 6% cash back on groceries/3% on gas rewards credit card vs. a city dweller like me with no dependents. You just have to look at the fine print and see what the COSTS are associated with the card.

THE BIGGEST DANGERS OF A REWARDS CREDIT CARD

Will A Late Credit Card Payment Hurt My Credit Score?

Running Late In Traffic

There’s Always An Excuse For Being Late!

I was so rushed to pack for Europe that I forgot to schedule my normal credit card payment for the first of the month! As a result, I missed my $535 credit card bill completely and didn’t realize it until three days after due date!

The first thing to realize is it’s not the end of the world if you accidentally miss a credit card payment. Things like this happen all the time, and the hammer does not fall on your credit score so quickly.

The second thing is there’s a grace period to how late you can be before getting hurt. Being three days late is much different from being 30 days late. But being 90+ days late is a disaster!

The final thing is credit card companies want to make money off you. Paying late or not in full every month makes them an estimated $60 billion+ a year! If credit card companies knew you would never default, they’d happily let you pay late all the time!

TWO STRATEGIES FOR HELPING WAIVE LATE PAYMENT FEES