The Credit Cards in My Wallet

by AJTrenkle on Thursday, January 24th, 2013 | No Comments

As a part of my yearly financial review (the one that saved me a lot of money on auto insurance which I discussed a week ago), I reevaluated all of the credit cards in my wallet. In general, you should never cancel a no-fee card as having it increases your length of credit/average account age and decreases your credit utilization rate, two key factors in a high credit score. You should also never cancel your oldest card as this keeps your credit history as long as possible. Remember, a high credit score is literally money in your pocket, in that you save big on any loans you have via lower interest rates, and the higher score qualifies you for the best signup bonuses for travel and cash back.

Anyway, I went out and cancelled a bunch that had yearly fees, and when possible tried to shift their credit lines to other cards from the same bank or financial institution. The cancelled cards included my Hawaiian Airlines Card (BofA), my British Airways Card (Chase), my United Explorer Card (Chase), my Premier Rewards Gold Card (AMEX), and my US Airways Card (Barclays). This saved me several hundred dollars and fees. These cards were great for the signup bonus (for instance I cancelled the BA card as soon as I hit $10k in yearly spend to trigger and additional 25000 avios miles), but do not have good spending multipliers or other benefits that make keeping the card worth it.

So that leaves me with:

FIA Card Services Fidelity Retirement Awards: This card gives 2% cash back on every single transaction. This can be transferred into any investment account. I plan on using this card often and investing the money. I am currently 32 years old, so if I leave the money in the account for decades, the return on this card could indeed be amazing. There is simply almost no better card, except that the rewards are a bit boring and require patience.

Chase Sapphire Preferred Card: This card is my go to for many occasions, especially for dining where the card gives me 2x points back. You can use these for cash back (which I recently did) or to transfer to travel partners like United Airlines. It is, simply, an amazing card.

American Express Platinum Business Card: I like this card even with the hefty fee. It gives you a nice $200 airline reimbursement for many incidental expenses (like baggage fees or food) and can often be used to buy gift cards. Also, I need to maintain one Membership Rewards earning card for its many options for shopping and travel transfers, even if most are now charging fuel surcharges. Its benefits are first rate and since I don’t do a lot of grocery spending and gas it made more sense to me than the Premier Rewards Gold Card. I think of it as only $75 more than the Premier Rewards Gold card, but that is worth it for the benefits.

Starwood Preferred Guest American Express: An amazing card. With a $65 annual fee it gives you effectively 1.25 points per mile to a lot of useful airline partners, as Starwood gives you 5k bonus points for every 20k you transfer. Its partners are mostly US airlines without whacky fuel charges.

Chase Freedom Card: A great card for small spending as the Chase Exclusives programs give you 10 bonus points per transaction along with 1.1 points. The points can be used for cash back, or with a Sapphire Preferred or INK Bold/Plus, transferred to airline partners. It has no fee and amazing 5% cash back in rotating categories each quarter that are really valuable.

Discover Card: I have had this since 1998 when I was just 18. It still has a great cash back program, especially in rotating 5% categories each quarter.

Citi Hilton Reserve: A great card for gold status with Hilton and a yearly free night certificate at any Hilton property after 10k spending. It also gives 3 Hilton points per dollar. The free nights, if used strategically, add value every year.

Citi AAdvantage Visa: I actually called to cancel this card, but they offered me a reimbursement on my annual fee and double points on each dollar spent up to $750 dollars a month. This week, they even sent an email bonusing me 3x points on Gas, Pharmacy, Groceries, and Restuarants. YMMV on this, but that was an offer too good to refuse.

Chase INK Bold: I put all my TV, internet, and wireless spending on this as it earns 5x points. I find this very valuable and to me is worth the $95 annual fee.

There you have it, my All-Star lineup of cards! Now if I can just keep it all straight…