About a year ago, I debated on whether to give up my credit card for good. Every financial planning site says that in order to better handle your finances, you need to ditch the card. I mentioned my plan to a friend and he said “Audrey, why in the world would you do that? You’re giving up free money.”
He had a point. I always paid off the balance on my credit card with each paycheck and it never accrued interest, but I just thought that it would be easier to track my spending if it was being withdrawn directly from my checking account.
At the time, I was using the Discover it Chrome card and was pleased with the rewards. I used the card for all purchases (making sure to pay it off twice a month!!) and probably gained $100 of reward dollars within a year, which I used to buy paper towels and toilet paper in bulk, as well as my special deodorant (which I loooove). Looking back, I wish I had saved the rewards for something special– not that I really need to reward myself for spending money.
Before I went to England in October, I decided to look into getting a different credit card because Discover isn’t accepted worldwide and I wanted one with no foreign transaction fees and better travel points. After some searching, I came across the Chase Sapphire Preferred credit card, and I’ll tell you why I decided it was the right one for me:
- There is no annual fee for the first year, but it is $95 a year afterwards
- There are zero foreign transaction fees
- It is a Visa card, so it is accepted worldwide
- For every dollar you spend, you get 2X points on travel (train tickets, airfare, hotels, etc.), 2X points on dining, and 1 point for every “other” dollar spent
- It comes with trip cancellation insurance
- You can notify them of your travel plans online instead of waiting for a representative with customer service, which I always forget to do until the day before
- If you spend $4,000 within the first 3 months of having the card, you receive 50,000 points on top of what you accrued through your purchases
If that last one didn’t sink in, let me explain further: if you spend $4,000 in 3 months, you can earn over $600 to use for travel if you book through the Chase Ultimate Rewards website. $4,000 may sound like a lot to spend in a short amount of time, and it is, but if you use the card for every single purchase you make (think bills, groceries, Spotify, Hulu), it adds up quickly.
My card arrived at the beginning of October, and by the time I bought my flights for Australia at the end of January, I had over $700 travel points to spend, which means that my 4 flights (LA to Brisbane, Brisbane to Cairns, Melbourne to Brisbane, and Brisbane to LA) only cost me $455 out of pocket. $455.
I did book through the Chase Ultimate Rewards website because it was a better value than cashing the points (for a lesser value) and buying the tickets elsewhere. I also bought my flights to and from Los Angeles on Priceline because I had already used all of my Chase points and it was suuper cheap.
In two and a half months, I have already gained over 7,000 points (redeemable through Chase for $87) and there is no way I’m going to spend any of those points on toilet paper. Moral of the story: if you can be disciplined enough to be sure that you are paying off the card every month, you are throwing away free money that can take you all over the world. Utilize it!!!!
One more thing– if you refer a friend to the Chase Sapphire card and they get approved, you can earn 10,000 points each. You can only earn 50,000 extra a year from referring friends, so only refer 5 a year to maximize your profit.