In part 2 of this series, I’ll be taking a deeper look at my picks from part 1. I’ll be taking my projected spend per year in all of the major spending categories and matching that up against the annual fees of all of the cards that make up this strategy. As a quick reminder, my points strategy involved 6 different cards.
- American Express Business Platinum – $450 annual fee, $200 travel credit
- American Express Premier Rewards Gold – $195 annual fee, $100 travel credit
- American Express Everyday Preferred – $95 annual fee
- Chase Sapphire Reserve – $450 annual fee, $300 travel credit
- Chase Ink Bold – $95 annual fee
- Chase Freedom – $0 annual fee
Total annual fees: $1090
Total annual travel credits*: $600
Total annual cost of credit cards: $590
*I can buy airline gift cards with my Business Platinum card and Premier Rewards Gold card for a total of $300. The Sapphire Reserve comes with a more flexible $300 travel credit that I can easily use.
In this analysis I am going to first assume that I will not be manufacturing spend at all.
Airfare – $1500 Per Year
Cash Tickets – $1000 Per Year
For this category I would use the Business Platinum card to book at AmexTravel and earn 5x points.
Resulting Points: 5000 MR Points
Award Tickets/Gift Card Tickets – $500 Per Year
The problem with getting those gift cards from the Business Platinum and Premier Rewards Gold cards is that I will need to book directly with the airlines to use them and thus won’t be able to use the Business Platinum’s 5x bonus at AmexTravel. I will put these purchases directly with airlines on my Premier Rewards Gold card. When I book award tickets directly with airlines, I will also put taxes/fees on the Premier Rewards Gold card. The Premier Rewards Gold card offers 3x MR points on airfare.
Resulting Points: 1500 MR Points
Other Travel Expenses (Excluding Gas) – $1000 Per Year
Some examples in this category are hotels, car rentals and taxis. I’ll put this on the Sapphire Reserve card and earn 3x points.
Resulting Points: 3000 UR Points
Gas – $2000 Per Year
I’ll put this on the Everyday Preferred card and earn 3x points.
Resulting Points: 6000 MR Points
Groceries – $3000 Per Year
I’ll put this on the Everyday Preferred card and earn 4.5x points.
Resulting Points: 13500 MR Points
Restaurants – $2000 Per Year
I’ll put this on the Sapphire Reserve and earn 3x points.
Resulting Points: 6000 UR Points
Amazon – $1000 Per Year
I’ll put this on the Ink Plus and earn 5x points.
Resulting Points: 5000 UR Points
Telecommunication – $800 Per Year
This category includes phone service, television, and internet. I’ll put this on the Ink Plus and earn 5x points.
Resulting Points: 4000 UR Points
Other Spend – $4000 Per Year
I will put everything else on the Everyday Preferred and earn 1.5x points.
Resulting Points: 6000 MR Points
MR Points: 32000
UR Points: 18000
Now that we have some projected point totals for how much you can earn in a year, we need to assign cash values to those points. I will be assigning the 2 cent a piece value to the MR points because my Business Platinum Card allows me to do that. For the UR points, I’ll use The Points Guy’s most recent valuation for them. He values them at 2.1 cents a point and I think that is a fair value.
MR Points Value = 32000 x $0.02 = $640
UR Points Value = 18000 x $0.021 = $378
Total Points Value: = $1018
Adding It Up
To find out the net benefit of having all of these credit cards, I’ll take the total projected point value I will earn in a given year and then subtract the annual cost of having those credit cards.
Total Point Value – Cost of Credit Cards = $1018 – $590 = $428
Making $428 off your credit cards is a pretty good deal. The problem is I know I can do better. Just by doing this analysis, I see some glaring flaws in my initial plan. For example, the Premier Rewards Gold card doesn’t offer great value. I could put the Premier Rewards Gold card spend on my Sapphire Reserve card and end up doing better. I could maybe even nix the Sapphire Reserve and the Premier Rewards Gold card and do even better… Back to the drawing board for another draft at my perfect mix of credit cards.
Stay tuned for the 3rd part of this series!