Credit Cards: How I Value Them, And Why
Hey everyone, Philip here, and today we're diving headfirst into the world of credit cards! Are they a necessary evil? A path to sweet rewards? Or just a wallet full of temptation? I’m going to break down how I value credit cards, share some real-life examples, and hopefully help you figure out what works best for you.
Okay, let's get down to business. I believe there are three main reasons to think of value that you’re getting when it comes to credit cards.
1. The Benefits and Perks
Let's be real, if you're going to commit to a credit card, it needs to earn its place in your wallet. What does it bring to the table? This could be anything from travel insurance to purchase protection, to the all-important lounge access.
2. The Alluring Sign-Up Bonus
Sometimes, a card might not be a long-term love affair, but that initial sign-up bonus is just too good to pass up! These are the cards you snag for the short term, grab the bonus, and then… well, we’ll get to that later.
3. The Sweet, Sweet Spend
This is about strategic spending. You get a card because you know it will reward you handsomely for specific purchases. The goal? Racking up those points!
Examples in the Wild
Let's look at some specific cards and how they fit into these categories:
Benefits & Perks: The American Express Platinum Card
This is the heavyweight champion of perks. Let's be honest, you don't get this card for everyday spending (it only earns 5x points on airfare booked directly or through Amex Travel and hotels prepaid through Amex Travel, and 1x on everything else). You get it for the experience. Think Centurion Lounge access, Delta Sky Club access, rockstar purchase protection, and travel insurance.
Sign-Up Bonus: The American Express Business Gold Card
I snagged this one for a whopping 150,000 points after spending $15,000 in three months. That's enough for some serious travel upgrades. But with a $375 annual fee, you need to be strategic to get long-term value.
Strategic Spending: The American Express Gold Card
This card is a point-earning machine, especially if you love food. It earns 4x points on dining and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1x). If you eat, this card is a no-brainer. Plus, it looks great when you drop it on the table at the end of a meal!
Measuring the Value: It's More Than Just Points
Okay, so we know why to get a card, but how do we know if it's worth it? I look at it in (essentially) three ways:
Real-World Value: Does this card enhance my travel experiences? Does it make my life easier or more rewarding? This is the tangible stuff you can actually use.
Sign-Up Bonus Potential: What can I do with those bonus points? Can they get me a few nights in a hotel? A business class ticket overseas? This is about maximizing that initial windfall.
Spending Power: What can I do with the points I earn from everyday spending? This is where things get interesting, and often overlooked.
Diving Deeper: How I Use My Cards
Let's get into the nitty-gritty and see how these principles play out with some specific cards in my wallet:
The Platinum Card: It's All About the Experience
Yes, the Amex Platinum has a hefty $695 annual fee. But for me, it's about the access.
Purchase Protection: This is huge. If you buy something expensive, the Platinum's purchase protection can be a lifesaver. Lost your AirPods within 90 days? Amex might just reimburse you!
Lounge Access: Centurion Lounges are a game-changer. Great food, showers, even whiskey bars! Plus, you get Priority Pass access, which is clutch in many airports. And, if you’re feeling particularly business-savvy, the Delta Skyclubs are pretty reliable.
Streaming Credits: $240 a year for streaming services? If you're already paying for services like Peacock, the New York Times, Disney Plus, or Hulu, it's basically free money.
TSA PreCheck/Clear: Time is money!
The key takeaway: Don't get hung up on just trying to "break even" on the annual fee. For me, the Platinum Card is about the overall experience, the peace of mind, and the access it provides.
Hotel Cards: Hilton Aspire and Ritz-Carlton
Hilton Aspire: This card is a no-brainer for Hilton loyalists. Immediate Diamond status, a $550 annual fee, and over $600 in credits!
Ritz-Carlton: $300 in travel credits and an 85,000-point free night award make this card a solid option for luxury stays.
Airline Cards: Loyalty Pays Off (Literally)
American Airlines AAdvantage Platinum Select: Free checked bags and priority boarding for you and up to eight companions? Yes, please!
Southwest Rapid Rewards Priority Card: I have a love-hate relationship with this card, but it helps my Southwest points go further. Priority boarding and potential upgrades make it worthwhile for now.
Business Delta Gold Card: 15% off points bookings, free checked bags, and preferred boarding? Makes flying Delta a much more pleasant experience.
Maximizing Sign-Up Bonuses: The Business Gold Card in Action
That 150,000-point sign-up bonus from the Amex Business Gold Card? It's pure gold. I redeemed 100,000 points for two business class tickets from Paris to New York on Air France. It saved me $8,000!
Virgin Atlantic Upper Class: Another score! 90,000 points for a lay-flat seat on the way back from England.
These experiences simply wouldn't have been possible without strategic sign-up bonuses!
Everyday Spending: The Amex Gold Card and More
Amex Gold: Dining and groceries? This card is a point-earning machine. It earns 4X on dining AND Groceries.
Capital One Venture: A solid "catch-all" card with 2x points on everything.
Chase Sapphire Preferred: My wife uses this for Publix grocery through Instacart pick up, and earns 3x points. We like the opportunity to earn some Chase points because we just can’t quit that Hyatt habit.
The result? We turned those Chase points into a four-night stay at the Hyatt Regency in Washington D.C., saving us about $200 a night! My Amex points from the Gold card helped me book first-class seats to Washington D.C. and Philadelphia. Our airfare cost was $50, and our hotel cost was $0.
The Bottom Line
Credit cards can be incredibly valuable if you use them strategically. It's about understanding your spending habits, maximizing benefits and sign-up bonuses, and finding the cards that align with your lifestyle.
What do you think? How do you value your credit cards? Let me know in the comments below!