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WWW.THEBJH.COM
THE BALTIMORE JEWISH HOME
AUGUST 4, 2022
Points to Ponder How to Master the Credit Card Points Game By DeBra ehrenBerg
Y
ou have definitely heard about them. It seems like everyone uses them. And you want to better understand what they are. Credit card points seem like the hot topic around town. Personally, they have afforded me and my family the opportunity to travel across the country, to Israel, and various places in between. They have also afforded me and my family the opportunity to stay in hotels that we would probably never have had the opportunity to stay at. This article will aim to give you an introduction as to what credit card points are, how to utilize them, and how to build up your credit card point portfolio to maximize your point benefits. Before we begin, I would like to make a disclaimer: I am not a registered financial advisor, nor do I play one on TV. This article is not intended to provide any sort of financial advice. Anything presented is from my own research and learning. On this note, I would like to thank Dan Eleff of “Dans Deals,” who runs a fabulous website and forum where he shares deals and delves into the ins and outs of credit card points. Much of my knowledge comes from reading through his posts and then playing the “points game.” I also would like to offer a word of caution. According to Dan Ellef, “The credit card points system is partially funded by the millions of users who do not pay their credit card in full when the bill is due. It is very enticing, and the credit card companies make it all too easy to fall into the trap of debt and then paying huge interest to the banks.” If you may fall prey to this, I recommend paying for things in cash. You can go to sleep at night knowing that you are not in credit card debt. Any gain in the “points
game” will be negated by the interest payments to the bank. However, if you stay on top of your game, aside from earning rewards, you can take advantage of many credit card benefits, such as return protection, extended warranty, car rental insurance, and much more. Assuming you can stay on top of your spending and pay your credit card bills in full and on time, then it’s time to take a dive into the benefits of credit card points. Credit card points are basically currency that banks issue to credit card holders based on spending. Different credit cards offer different “currency.” Firstly, there are cash back cards, which are a good way to get 2% back on all your purchases with no annual fee. This is a solid option, but often one can do better. The second type of card is an airline/hotel credit card that offers points in the form of the specific airline/hotel. The downside of these cards is that the points are locked to just one brand. However, many hotel cards offer a free night (within certain parameters) with the annual fee card. Additionally, almost all airlines offer one free piece of luggage for the cardholder and a certain number of companions with their annual fee card. This can be a wise option for someone who travels frequently on a specific airline. The third type of card is a transferable point-currency card. These are cards that allow you to earn points and use your points in a variety of ways, including using points towards bill payments, redeeming for travel, and even transferring points to other reward programs. Like many things in life, with a little patience and wisdom, one can build their credit card portfolio to include cards from each category to reap the most benefits. I suggest keeping a basic spreadsheet containing infor-
mation such as: credit card type, date opened, sign-on bonus, spending category bonuses, card benefits, and date closed in order to stay organized. There are a few ways to earn points from your credit card. The first is through a sign-on bonus. A sign-on bonus is basically a large chunk of points that will be issued to your account once you meet the terms of the credit card, typically in the form of spending a certain amount of money within a certain timeframe. Once you reach the spending threshold, then the bank will issue you the sign-on bonus and the points are added to your account. This is often the quickest and most “lucrative” way to earn points. The second way to earn points is by everyday spending. In order to reap the most benefits in this category, I suggest that you make a note of which credit card to use for what spending. Different credit cards earn different points at various venues. For example, certain cards earn 2X points at restaurants, others earn 3X points for travel, while another earns 5X points at office supply stores. One can really do well by using the “right” credit card for specific spending. A third way to earn points is by referring friends for specific cards. Some credit cards have a refer-a-friend offer, where you can earn a bonus if your friend applies for and is approved for that credit card using your referral link. I will now answer the question that many of you probably have had from the get-go. Doesn’t opening (and closing) multiple credit cards hurt one’s credit score? The answer is, not really. As delineated on Dansdeals.com, your credit score is broken down as follows: -Payment History: 35%. Pay your bills on time and this category should be easy. -Amount Owed: 30%. This measures your credit uti-
