topic Re: Travel Cards and Lifestyle Creep in Credit Cards

Travel Cards and Lifestyle Creep

VanderSnoot — Thu, 06 Jun 2019 11:23:06 GMT

I'm researching travel cards, and while some of them are loaded with benefits, they're benefits that I wasn't looking for, and I'm concerned that they would lead to lifestyle creep. I've worked hard to raise my savings rate, which came in part from lowering my cost of living, and I don't want to go back to the jet-set lifestyle I had when I was younger. That said, I'm not immune to the allure of weekend getaways and luxury travel. Has anyone else here worked through these issues? Where did you land?

(In case it's relevant, I'm firmly in the garden, so any card is 16-24 months away, but I am enjoying what I'm learning here on MF and working to round out my knowledge to form a solid plan for the future.)

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 11:46:16 GMT

@VanderSnoot wrote:
I'm researching travel cards, and while some of them are loaded with benefits, they're benefits that I wasn't looking for, and I'm concerned that they would lead to lifestyle creep. I've worked hard to raise my savings rate, which came in part from lowering my cost of living, and I don't want to go back to the jet-set lifestyle I had when I was younger. That said, I'm not immune to the allure of weekend getaways and luxury travel. Has anyone else here worked through these issues? Where did you land?

(In case it's relevant, I'm firmly in the garden, so any card is 16-24 months away, but I am enjoying what I'm learning here on MF and working to round out my knowledge to form a solid plan for the future.)

While the impact is probably bigger with travel cards ("I would be an idiot not to take advantage of this J class flight to X for only 120K points!!! And if I end up spending $5000 on other travel costs it's still a bargain!") there is still some possible creep with all cards.

Getting some cash back makes things (a very little!) cheaper and so can lead to over-consumption, as does the impulse to max out quarterly categories (or else you are leaving money on the table) and same with Amex offers, things like Amex Plat credits at Saks etc.

Now you are very unlikely to find anyone here who says that applies to them:"I use it like a debit card and just buy what I would buy anyway" but that doesn't mean that it doesn't! (Of course, I only use MINE like a debit card...)

Re: Travel Cards and Lifestyle Creep

wasCB14 — Thu, 06 Jun 2019 12:17:55 GMT

It happens. I'm still quite happy with budget seats.(I sit about to board an AA flight in a domestic basic economy middle seat. I also had a good walk to a basic free breakfast at a PP lounge.)

But on vacations with family, the comfort goes up. After a nice award stay I booked (3 cpp) Hyatts are now the norm.

Partly it's because I have the points for some nice redemptions (and they pay in cash at other times for our travel).
Partly because it's harder to find common vacation time, so price per day is less of a concern.
Partly because the older generation needs a little more comfort.

And I will buy 3 pairs of socks for a net $5-$10 twice a year at Saks (ebates portal and showrunner, of course).

But I would not pay $55-$60 for them!

Re: Travel Cards and Lifestyle Creep

kdm31091 — Thu, 06 Jun 2019 12:22:51 GMT

Honestly I think it occurs with cash back cards as well. It’s very easy for 3 or 5 percent on say, dining, to reinforce your maybe not so great habit of eating out constantly. You end up spending way more in the long run chasing that tiny reward.

It’s hard to own it sometimes, but it’s important to keep rewards in perspective. The bottom line is you’ll save more by not spending to begin with, and keeping your budget and lifestyle where you want it to be. Don’t let rewards encourage you to spend more or buy things you wouldn’t otherwise. Again, it’s hard to quantify “wouldn’t buy otherwise” sometimes, but it’s important to try.

Re: Travel Cards and Lifestyle Creep

redpat — Thu, 06 Jun 2019 12:47:58 GMT

We still budget for travel and use our points to travel first class while paying economy prices for Hotels and Flights.

FHR had a great deal for the 4th at a Waldorf 3rd night free $216 per night w/ $100 property credit and free breakfast, burned some airline miles to get there. We would have never gone w/o having miles for our fights.

Now I can cross off anyother baseball park off my list and have a great 4 day long weekend, w/ 4 pm check-out we booked 7:00 pm fight departure.

Most of our points comes from business travel and spend.

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 12:59:56 GMT

I’m relatively new to the travel game, having gotten my first travel-biased cards in November 2018 (Delta Gold and Hilton Honors). Thanks to an HH membership going back a few years, and hitting the SUBs for the HH base and Ascend cards, I’ve used points for 9 free nights so far and still have over 155k points. Now that I’ve started the MR game with the Gold card, I do look forward to putting MRs towards airfare, possibly along with the Delta points I have so far, and using HH points for the stay. I’m not trying to manufacture spend to gain this stuff but the fact that I have useable points in sufficient quantity for some real savings means that I’m much more likely to travel than I might otherwise be, simply because soon I may be able to do a 4-5 day trip to San Diego for essentially the cost of food. It’s kind of hard to say no to that.

I’m keeping an eye on my possible inclination to get the Amex Platinum next year - if the savings from the current cards’ rewards make such a trip that accessible, I’ll have to seriously weigh the costs vs perks of Platinum, and see if I can make it happen logically rather than force the spend for the travel rewards.

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 13:41:48 GMT

My take is if you want to spend more than make more. I’ll pick up a bit of extra work to pay for trips/toys I want, and keep our overall saving rate the same. The majority of my travel is domestic and I don’t generally pursue first/business class for it bc it’s not really worth it to me, but save my UR/MR for first class international travel.

I haven’t lived in a city like MSP or Denver where I feel like it’d be advantageous to be loyal to one airline, either.

Re: Travel Cards and Lifestyle Creep

xaximus — Thu, 06 Jun 2019 15:34:15 GMT

Generally, rule of thumb has been to only spend what you can afford. Living above your means is a recipe for disaster. I've been doing travel cards for quite some time now but generally only travel when I can. Otherwise, there's no point in loading up on travel cards. I concentrate more now on CB and UR points from Chase. In your case, I would look for a one travel card that can fit your lifestyle. If you find yourself preferring one specific hotel brand, possibly look into that too but do the math on it. Is it worth carrying 2 cards? A simple example below -

User 1 - stays as XYZ hotel brand 5-10 times a year

User 2 - stays as XYZ hotel brand 25-30 times a year

In this scenario - it's probably more worthwhile for User 2 to obtain the XYZ hotel brand card while for User 1, it probably won't be too worthwhile. If you visit/live in a specific area where any airline is more popular, prefer a hotel brand, car rentals from a specific company, etc. then depending on how many times you do it, it may be worth looking into a specific card, but otherwise, I would recommend sticking to a single travel card. I would recommend something like the CSR/CSP/AmEx Platinum/US Bank AR/BoA Premium Rewards (esp. if you bank with them). Each card has it's own benefits so I would definitely look into which works best for you (also keep in mind - existing relations, checking accounts, etc.).

Re: Travel Cards and Lifestyle Creep

VanderSnoot — Thu, 06 Jun 2019 16:04:26 GMT

@longtimelurker and @kdm31091 - You're right, it does happen with cash back cards, which is part of how the issuers cover the cash back costs. I'm a hard core budgeter these days and I watch our spending tightly, but I definitely choose differently with a CC vs a debit card (less thinking ahead, more revising afterward). Our budget has some slack, so most months we come in 10-15% under budget, and any overages in one category are offset in another category. Our typical overspend is groceries, but it used to be dining and clothes and electronics and concerts and travel and omg Amazon was the worst!

@redpat @ImTheDevil @mystere3 and @xaximus - That's the goal: a card that doesn't lure me to change my habits and upgrade my lifestyle. I was looking through some of the options on the Chase site, and I found a great discount at a Miami beach hotel that reminded me of getaways I used to take (4 days at Fountainebleu, with spa appointments of course), and I felt that familiar pull of the want. Mind you, I just spent a week on the Florida coast for under $800 (hotel, rental car, gas, food) and had a perfectly good time (sunrise, turtle patrol, pool and beach, siesta, fresh fruit and cold drinks, live music, bonfires; repeat). I snap out of lifestyle creep mode and remember that the flights to Miami would be more than I just spent for a week for 5 on the beach. That's what I want to avoid.

@wasCB14 - I think this is close to where I'll land: doing a little more on vacations, but keeping it conservative at home. One of the reasons I prefer the CSR to the Amex cards is that the program seems more flexible, and you can still get benefits with budget travel.

I know each of you said more than what I responded to above. Just capturing some of the relevant (to me and my situation) themes.

Re: Travel Cards and Lifestyle Creep

Green456 — Thu, 06 Jun 2019 16:07:13 GMT

@VanderSnoot wrote:
I'm researching travel cards, and while some of them are loaded with benefits, they're benefits that I wasn't looking for, and I'm concerned that they would lead to lifestyle creep. I've worked hard to raise my savings rate, which came in part from lowering my cost of living, and I don't want to go back to the jet-set lifestyle I had when I was younger. That said, I'm not immune to the allure of weekend getaways and luxury travel. Has anyone else here worked through these issues? Where did you land?

(In case it's relevant, I'm firmly in the garden, so any card is 16-24 months away, but I am enjoying what I'm learning here on MF and working to round out my knowledge to form a solid plan for the future.)

Since this is mostly a credit card forum, a lot of people in here will disagree with my opinion. Having said that, I think people in general spend more using credit cards than cash. You are more likely to spend on impulse when the panelty for spending (payment) is delayed by 30 days but your reward is instant ie product: ubber ride instead of subway or walk, dining out instead of eating at home, extra apetizer, extra drink, etc. You are even more likely to "indulge yourself" when you get miles or cashback. You are more likely to think, "I have earned this," etc...

My wife and I, we did experiment not too long ago. We determined budged for vacation and food to be $1,000 a month. We used cash for couple of months and then we switched to BoA 3.3% card. The months we used cash we spent much less money.

Right now I use credit cards only for re-occuring payments that I cannot avoid: cell phone, car insurance, internet, memberships. I keep my 3.3% BoA card for buying flights to Europe and to maintain some credit history.

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 16:30:26 GMT

@Green456 wrote:
n. Having said that, I think people in general spend more using credit cards than cash. You are more likely to spend on impulse when the panelty for spending (payment) is delayed by 30 days but your reward is instant ie product: ubber ride instead of subway or walk, dining out instead of eating at home, extra apetizer, extra drink, etc. You are even more likely to "indulge yourself" when you get miles or cashback. You are more likely to think, "I have earned this," etc...

My wife and I, we did experiment not too long ago. We determined budged for vacation and food to be $1,000 a month. We used cash for couple of months and then we switched to BoA 3.3% card. The months we used cash we spent much less money.

Right now I use credit cards only for re-occuring payments that I cannot avoid: cell phone, car insurance, internet, memberships. I keep my 3.3% BoA card for buying flights to Europe and to maintain some credit history.

There was some research (although since criticised) supporting this, that credit cards (and debit cards) encourage spending, even non-rewards ones. Basically the idea is that handing over physical cash makes it seem more real, and thus gives you time to think do I really want to spend this? So for example, paying $1200 in cash for a flagship smartphone might give pause for thought! (But if you really want such a phone, using a credit card to pay is much more sensible, for protection and rewards!)

Re: Travel Cards and Lifestyle Creep

Remedios — Thu, 06 Jun 2019 16:55:25 GMT

Cash seems "not real" to me. If I end up with some, i think of it as "free money" even though it came from my account. Go figure 😐

Watching balance increase on CC between statements keeps me in check. I'm acutely aware what I'll be paying at the end of billing cycle, and when I start adding it up between various cards, it serves as impulse deterrent.

Also, knowing I was terrible at managing finances many moons ago makes me reluctant to even take advantage of 0% intros. It's been a really long time but I still dont trust myself and I wont be testing that theory any time soon.

I understand that's not necessarily in my best interest but having $0.00 debt is, so I wont grovel over it too much.

Re: Travel Cards and Lifestyle Creep

NRB525 — Thu, 06 Jun 2019 17:02:36 GMT

I am a lifestyle creep.

I am gathering and organizing my rewards CC, will cut them where it makes sense, and expanding my travel plans while I am still active.

I am also expanding my income to pay for it all.

Because at the end, you can’t take any of it with you.

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 17:15:41 GMT

@NRB525 wrote:
I am a lifestyle creep.

I am gathering and organizing my rewards CC, will cut them where it makes sense, and expanding my travel plans while I am still active.

I am also expanding my income to pay for it all.

Because at the end, you can’t take any of it with you.

That's just what they want you to think! My late uncle is currently getting 205% APR on his 10,000,000 year CDs from First Heaven Bank.

Re: Travel Cards and Lifestyle Creep

Anonymous — Thu, 06 Jun 2019 17:18:55 GMT

I also have fell into the category of lifestyle creep. I recently got a Venture card, and my first full month’s statement is due soon. Without gas included, I spent shy of 1700. To be fair though, I had run out of a lot of things for the baby and stocked up at Sam’s Club and we also bought various things that we didn’t receive prior to the baby being born. But it definitely was a reality check to us and we’ve adjusted accordingly this month; and I’m projecting a spend of about 1000 on groceries and other necessities.

Re: Travel Cards and Lifestyle Creep

xaximus — Thu, 06 Jun 2019 17:30:45 GMT

@Green456 wrote:
@VanderSnoot wrote:
I'm researching travel cards, and while some of them are loaded with benefits, they're benefits that I wasn't looking for, and I'm concerned that they would lead to lifestyle creep. I've worked hard to raise my savings rate, which came in part from lowering my cost of living, and I don't want to go back to the jet-set lifestyle I had when I was younger. That said, I'm not immune to the allure of weekend getaways and luxury travel. Has anyone else here worked through these issues? Where did you land?

(In case it's relevant, I'm firmly in the garden, so any card is 16-24 months away, but I am enjoying what I'm learning here on MF and working to round out my knowledge to form a solid plan for the future.)
Since this is mostly a credit card forum, a lot of people in here will disagree with my opinion. Having said that, I think people in general spend more using credit cards than cash. You are more likely to spend on impulse when the panelty for spending (payment) is delayed by 30 days but your reward is instant ie product: ubber ride instead of subway or walk, dining out instead of eating at home, extra apetizer, extra drink, etc. You are even more likely to "indulge yourself" when you get miles or cashback. You are more likely to think, "I have earned this," etc...

My wife and I, we did experiment not too long ago. We determined budged for vacation and food to be $1,000 a month. We used cash for couple of months and then we switched to BoA 3.3% card. The months we used cash we spent much less money.

Right now I use credit cards only for re-occuring payments that I cannot avoid: cell phone, car insurance, internet, memberships. I keep my 3.3% BoA card for buying flights to Europe and to maintain some credit history.

Somebody ban him for saying cash is better then credit cards! 🤣🤣🤣🤣🤣🤣 Just kidding.

I do understand where you are coming from, but to me, as I have done both, cash and card, I realized with cash, I end up burning more since it's in my pocket and I end up not knowing where I spend it at times. It's easy to lose track of cash if you don't write it down or don't have a good memory (I definitely do not). That alone for me is a big plus. I can always look at my statements and recall where I spent what (usually the descriptions are easy indicators).

With cards, I have all my bills pretty much set to cards, I already know how much each is (more or less), I have specific cards for groceries/dining/travel and a general spend card. Because of that, its easy for me to keep track of things. At the end of the day, self control and understanding/staying with in a budget are crucial. It's easy to overspend when you have credit cards, you just have to have self control and being financially smart.

Re: Travel Cards and Lifestyle Creep

red259 — Thu, 06 Jun 2019 22:34:02 GMT

If money is tight then maybe a luxury card is not appropriate. These cards aren't designed for everybody. I don't know what lifestyle creep is but simple answer is people should never buy stuff if they don't have the money. If people can't control their spending then maybe credit cards aren't for them to begin with. Just because I fly first class a lot doesn't mean I'm going to pay for first class tickets out of my own pocket. I'll stay at an ultra fancy resort on points but on paid stays I'm not doing that without a sale. If anything since I have soo much experience with high end hotels and flying first class I know exactly what it is and know that its not worth the massive increase in price, so I am even less likely now to splurge on first class tickets than I was before when I had no experience with them. Same for the hotels. Yes the hotels are nice but I am often just as content in a courtyard hotel.

Re: Travel Cards and Lifestyle Creep

tacpoly — Thu, 06 Jun 2019 23:22:36 GMT

I pay for my travels: I fly first/business class and stay in boutique hotels known for their service on my own dime. Eating at famous restaurants is usually part of the travel itinerary. So there is no lifestyle creep — I do not use my credit card to live a lifestyle I couldn’t otherwise afford.

When I travel for work, I stay in approved hotels and am mindful of my expenses. In general, it annoys me when my coworkers live high on the hog on expense accounts (room service, expensive meals, etc...), specially when they wouldn’t do it if it was their own money.

Re: Travel Cards and Lifestyle Creep

Anonymous — Fri, 07 Jun 2019 01:32:02 GMT

Just have a budget and be smart about it. Definitely not something can't be overcome.

Re: Travel Cards and Lifestyle Creep

Anonymous — Fri, 07 Jun 2019 01:56:30 GMT

@Anonymous wrote:
Now you are very unlikely to find anyone here who says that applies to them:"I use it like a debit card and just buy what I would buy anyway" but that doesn't mean that it doesn't! (Of course, I only use MINE like a debit card...)

Thats why you need to match the card to your lifestyle and not your lifestyle to the card. I can't say for others, but I use mine like a CC, not a Debit card. However, my spending matches my lifestyle. For example, I didn't get the CSR until I knew I would be doing more traveling, as the restaurant return was not enough. I now rotate cards to find the highest % back on every purchase.

Sure, its easier to buy stuff, but if you were going to buy it anyway - might as well get the most cash back. You're going to buy what you want to buy regardless, but if you can't control your own spending then start working on that. The point is, you will buy w/e it is, so therefore, find the cheapest price and then pay for it using the card that gets you the most back. Using a debit or cash won't curb a bad habit - let's not pretend that it does.