Some people are scared to death of credit cards. They cringe when those two words are spoken of as if the cards will come to haunt them in their sleep. Not me though. I love credit cards and I use them as often as possible. If the merchant takes credit cards, then I take out one of my 16
12 credit cards from one of my two wallets and will use it to make my purchase. I use credit cards for almost everything including gas, groceries, bills, shopping and food. Why do I love credit cards so much? I’ll sum it in three simple words: Points, Miles, and Cash.
Not all credit cards are created equal. In terms of usage, they all work the same. It’s a classic “buy now, pay later” scheme. However, the way you collect your benefits may differ drastically. There are basically three major types of credit cards available to everyone.
Airline credit cards such as Gold Delta Skymiles credit card by American Express will earn you Delta Skymiles for each dollar you spend using your Gold Delta Skymiles credit card. Same goes for United MileagePlus Explorer credit card by Chase and Southwest Airlines Rapid Rewards credit cards. The more you spend, the more miles you will earn. If you earn enough miles, you can redeem your miles for free round trip on your next vacation. Currently, I have Delta, United, Southwest, Virgin Atlantic, and US Airways credit cards with enough miles for a round trip anywhere in the continental US for each of these airline rewards programs. This is one of the reasons why I love credit cards – free flights!
Hotel cards work pretty much exactly the same way as airline credit cards. You earn hotel points for each dollar you spend. Some programs will earn you more points per dollar than others. But that necessarily does not mean that they’re more valuable. For example, American Express Hilton HHonors credit card earns you 3 points for every dollar spent while American Express Starwood Preferred Guest card earns you only 1 point per dollar spent. I value Hilton HHonors points at around 0.50-0.75 cents per point. For instance, last year I used 30,000 Hilton Honors points to redeem for a $150 room in New Jersey, just outside of New York. However, I value Starpoints at around 2.5-3.0 cents per point. You can redeem a category 1 hotel room for as low as 4,000 points. Currently, I own American Express Hilton, Citibank Hilton, American Express Starwood Preferred Guest, and Barclay Club Carlson credit cards with enough hotel points for free multiple nights for my next vacation. This is another reason why I love credit cards – free hotel nights!
Cash Back and Points
One of my very first credit cards I applied for was the Discover card. I’m not exactly sure what they called it back then, but now it’s dubbed as the Discover More card. It gave me 1% cash back on all my purchases and additional 4% cash back on purchases that fell into a certain purchase category as part of the quarterly rotational 5% cash back promotion. I have earned more $1,000 in cash back over the years for simply using my credit card for my every day expenses. The More card is no longer available but Discover is currently promoting their new card dubbed as the Discover it®. Another type of cash back program uses points instead of cash back. It’s essentially the same as cash back, but you use points to redeem for cash or statement credits. Citibank ThankYou and Chase Ultimate Rewards are such programs that use the point system instead of cash back system. Currently, I have over $400 worth of points in my ThankYou account and almost $2,000 worth of points in my Ultimate Rewards account. This is yet another reason why I love credit cards – free money!
How To Sign Up For Credit Cards
If these three reasons are convincing enough to love credit cards as much as I do, then here are a few cards I recommend for each of these categories:
Southwest Airlines Rapid Rewards – Receive 25,000-50,000 Rapid Rewards points. Use www.southwest.com (not an affiliate link) to receive 50,000 (2 roundtrip flights). This offer is valid until August, 2013
United MileagePlus Explorer – Receive 30,000 miles
Gold Delta SkyMiles – Receive 30,000 miles (affiliate link), after spending $1,000 in 3 months
AAdvantage Visa Signature – Receive 30,000 miles
US Airways Premier World Mastercard – Receive 50,000 miles
Starwood Preferred Guest® Credit Card from American Express – Receive 25,000 points (affiliate link), after spending $5,000 in 6 months
Marriotts Rewards Premier – Receive 50,000 points
Citi Hilton HHonors Visa – Receive 40,000 points (affiliate link)
Chase Freedom Visa – Earn $100 (or 10,000 points)
Chase Sapphire Preferred – Earn $400 (or 40,000 points)
Citi ThankYou Preferred – $150 Cash Back (or 15,000 points)
Barclaycard Arrival World Mastercard – 40,000 points (affiliate link), after spending $1,000 in 3 months
All these cards can be found at Creditcards.com (affiliate link) website. Just click on menu on the left pane to find the card you are interested in. For your information, I receive a small commission if you use the link above. Before you sign up, please read all of the fine print and understand all terms and conditions. Please do your own due diligence before signing up for anything.