topic Re: What to do next? (College Student) in Credit Cards

What to do next? (College Student)

ToxikPH — Tue, 17 Sep 2019 23:41:10 GMT

I've been fairly active with credit the past ten months and on these forums but I've never really sat down and thought about my goals. Recently I've been super active on here and questioning my set up.

WasCB14 says "Until your income is significantly more than $31k, your best option may be to just occasionally get a nice bonus and not bother with airline loyalty or a focus on a particular CC rewards program". I wanted to start my own thread instead of piggybacking another. Should I shoot for high bonuses on AF cards, grab small bonuses on no-AF cards for age, or go for large bonuses with downgrade paths?

Also, should I bother sticking with one issuer or vary between a few? I've been told either way and I'm not sure which seems more efficient/effective. All the cards in my sig are acquired in the last ten months so I will be sitting in the garden for a while I just want to get some advice in order to know my goals better and have a plan for when my file looks good again.

Oh also since I am a college student I have a lot of large spend every semester as I pay out of pocket instead of student loans; other spending is travel and food majority.

Re: What to do next? (College Student)

K-in-Boston — Tue, 17 Sep 2019 23:53:00 GMT

You've acquired a staggering amount of credit in a short period. I know the SUBs are addictive (see signature, and that doesn't show closed or AU cards LOL), but it's probably time to slow down. As long as you know what you want to do with your rewards, splitting them among different rewards isn't necessarily a problem. If you have a fairly low income and are looking for premium cabin international travel with one particular transfer partner, it probably makes sense to stick with one. If you are looking to maximize cash back, be careful of cards with minimum redemption values since if you're spreading spend around to maximize that, it'll be difficult to get up to $25 or $50 with say the card you're only using for gasoline.

I think it's a good time to decide how you want to use your rewards, and then you can work on a game plan from there, and maybe go for a new card with a huge SUB each semester?

Re: What to do next? (College Student)

kdm31091 — Tue, 17 Sep 2019 23:54:52 GMT

With your lower income, I probably would be reconsidering paying for cards like Gold or Platinum. Chances are you won't spend enough to make them worthwhile compared to no AF cash back options.

wasCB's point was that because of your lower income, your rewards on everyday spend are not going to be that big in the grand scheme of things and you will probably reap more value out of the occasional sign up bonus instead of signing up for 15 different cards and trying to maximize every dollar. With lower income/spending it is important to decide what you want to redeem for and focus on 1 or 2 programs to help you with that goal because chasing every dollar is going to leave you with a tiny amount of rewards in many systems that will be of no use.

To be honest, I think you already have plenty of cards and could be too many for your income/spend but that is a personal opinion. I would say to focus your spend on 1-2 programs, maybe get the occasional signup bonus, but don't spread your spend on a dozen cards. It just won't get you anywhere.

Re: What to do next? (College Student)

ToxikPH — Tue, 17 Sep 2019 23:57:21 GMT

@kdm31091 wrote:
With your lower income, I probably would be reconsidering paying for cards like Gold or Platinum. Chances are you won't spend enough to make them worthwhile compared to no AF cash back options.

wasCB's point was that because of your lower income, your rewards on everyday spend are not going to be that big in the grand scheme of things and you will probably reap more value out of the occasional sign up bonus instead of signing up for 15 different cards and trying to maximize every dollar. With lower income/spending it is important to decide what you want to redeem for and focus on 1 or 2 programs to help you with that goal because chasing every dollar is going to leave you with a tiny amount of rewards in many systems that will be of no use.

To be honest, I think you already have plenty of cards and could be too many for your income/spend but that is a personal opinion. I would say to focus your spend on 1-2 programs, maybe get the occasional signup bonus, but don't spread your spend on a dozen cards. It just won't get you anywhere.

I've done the math on the Plat/Gold and based on my spending habits they're perfectly made up for. If I was for some reason do some serious consolidation I would be okay with only having those two and they are def my last to get rid of.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:01:17 GMT

@K-in-Boston wrote:
You've acquired a staggering amount of credit in a short period. I know the SUBs are addictive (see signature, and that doesn't show closed or AU cards LOL), but it's probably time to slow down. As long as you know what you want to do with your rewards, splitting them among different rewards isn't necessarily a problem. If you have a fairly low income and are looking for premium cabin international travel with one particular transfer partner, it probably makes sense to stick with one. If you are looking to maximize cash back, be careful of cards with minimum redemption values since if you're spreading spend around to maximize that, it'll be difficult to get up to $25 or $50 with say the card you're only using for gasoline.

I think it's a good time to decide how you want to use your rewards, and then you can work on a game plan from there, and maybe go for a new card with a huge SUB each semester?

I haven't ever thought of wanting to do international travel. Business/First class also seems like too much to me per $. I think the only international travel I would want to do is up north to Canada. The best class I've ever flown in is Comfort+ on Delta and that's good enough for me.

I have never been seriously interested in cashback as a long term strategy but would be okay with them as a sign-up or if it's a larger % card like Cash+ or Disco.

I do plan on slowing down like I said I am in the garden just looking for goals to reach for to determine a game plan.

Finally, I have been trying to hit a SUB every semester just not sure what I should be chasing now since I have so much already.

Re: What to do next? (College Student)

wasCB14 — Wed, 18 Sep 2019 00:11:22 GMT

Keep in mind airlines can sometimes make it a hassle to find partner award space (and once you learn, the search process can always change). Several have mileage expiration rules that infrequent flyers may find harsh. Keeping track of half a dozen different foreign frequent flyer account programs may not be worthwhile if you fly domestic economy just a few times a year.

With all your new accounts you may have limited options for new cards. You should make any further applications worthwhile.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:13:47 GMT

@wasCB14 wrote:
Keep in mind airlines can sometimes make it a hassle to find partner award space (and once you learn, the search process can always change). Several have mileage expiration rules that infrequent flyers may find harsh. Keeping track of half a dozen different foreign frequent flyer account programs may not be worthwhile if you fly domestic economy just a few times a year.

With all your new accounts you may have limited options for new cards. You should make any further applications worthwhile.

Worthwhile as in high SUB? or something else?

Re: What to do next? (College Student)

kdm31091 — Wed, 18 Sep 2019 00:14:42 GMT

Amex points generally are best used for international/first class travel. Outside of that, the value is only okay. If you aren't wanting to do that sort of travel it may not be worth paying those AFs. I understand you don't want a cash back strategy, but MR points really aren't great for much else outside of (typically higher end) travel. Someone with more MR expertise can chime in, but I never got the feeling they were useful for many other redemptions.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:15:24 GMT

@kdm31091 wrote:
Amex points generally are best used for international/first class travel. Outside of that, the value is only okay. If you aren't wanting to do that sort of travel it may not be worth paying those AFs. I understand you don't want a cash back strategy, but MR points really aren't great for much else outside of (typically higher end) travel.

I noticed the partners on Chase are much more economical and domestic travel-oriented; should I garden for 5/24 and aim for a mainly UR setup?

Re: What to do next? (College Student)

kdm31091 — Wed, 18 Sep 2019 00:23:34 GMT

@ToxikPH wrote:
@kdm31091 wrote:
Amex points generally are best used for international/first class travel. Outside of that, the value is only okay. If you aren't wanting to do that sort of travel it may not be worth paying those AFs. I understand you don't want a cash back strategy, but MR points really aren't great for much else outside of (typically higher end) travel.
I noticed the partners on Chase are much more economical and domestic travel-oriented; should I garden for 5/24 and aim for a mainly UR setup?

I think UR points are more flexible than MR for the simple fact you can cash them out easily, but I don't know that any of the transferable points are your best option necessarily. Generally speaking, if you're just going for cheap domestic flights, a cash back card is going to be better.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:31:22 GMT

@kdm31091 wrote:
@ToxikPH wrote:
@kdm31091 wrote:
Amex points generally are best used for international/first class travel. Outside of that, the value is only okay. If you aren't wanting to do that sort of travel it may not be worth paying those AFs. I understand you don't want a cash back strategy, but MR points really aren't great for much else outside of (typically higher end) travel.
I noticed the partners on Chase are much more economical and domestic travel-oriented; should I garden for 5/24 and aim for a mainly UR setup?
I think UR points are more flexible than MR for the simple fact you can cash them out easily, but I don't know that any of the transferable points are your best option necessarily. Generally speaking, if you're just going for cheap domestic flights, a cash back card is going to be better.

Cashback card? I feel like the benefits of the travel cards would make way more sense. If I was to pick a cashback card for travel what would it even be?

Re: What to do next? (College Student)

kdm31091 — Wed, 18 Sep 2019 00:34:37 GMT

Just because it is a "travel card" doesn't mean it is the best for every travel situation. If you saved up the cash on say, your Double Cash or Apple Card, you could simply take that cash at the end of the year, buy a cheap domestic flight to wherever you want with no restrictions, and use the cash to pay the bill. It just gives you more flexibility.

There's nothing wrong with MR points, UR points, or travel cards, but it doesn't sound like they fit your situation that well.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:38:20 GMT

@kdm31091 wrote:
Just because it is a "travel card" doesn't mean it is the best for every travel situation. If you saved up the cash on say, your Double Cash or Apple Card, you could simply take that cash at the end of the year, buy a cheap domestic flight to wherever you want with no restrictions, and use the cash to pay the bill. It just gives you more flexibility.

There's nothing wrong with MR points, UR points, or travel cards, but it doesn't sound like they fit your situation that well.

My only problem with a cashback setup is I haven't seen a card targeted at travel spend which is a large part of my current spend. Are there some I don't know about? I know the BCP has "transport" but those don't apply to me.

Re: What to do next? (College Student)

wasCB14 — Wed, 18 Sep 2019 00:48:10 GMT

The reason to get good SUBs (as in $300+ cash or 50k+ miles, assuming you use them) is that even if the card gets nerfed or your travel needs change after a year, the card will still have provided a decent overall lifetime value.

With some card that gives a $25 bonus, you don't really have that cushion.

The only card I've gotten in the last 4 years without a good SUB was BBP. I made an exception for that because I knew I'd be putting a lot of spend on it right away at 2x MRs.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 00:54:52 GMT

@wasCB14 wrote:
The reason to get good SUBs (as in $300+ cash or 50k+ miles, assuming you use them) is that even if the card gets nerfed or your travel needs change after a year, the card will still have provided a decent overall lifetime value.

With some card that gives a $25 bonus, you don't really have that cushion.

The only card I've gotten in the last 4 years without a good SUB was BBP. I made an exception for that because I knew I'd be putting a lot of spend on it right away at 2x MRs.

What card(s) would you recommend for my style? Would you go with cashback like said above or a simple travel card like CSP or Venture? Note; most of my spend is school (8-12k a year), travel (3-4k), and dining (4-5k).

Re: What to do next? (College Student)

wasCB14 — Wed, 18 Sep 2019 01:19:34 GMT

@ToxikPH wrote:
@wasCB14 wrote:
The reason to get good SUBs (as in $300+ cash or 50k+ miles, assuming you use them) is that even if the card gets nerfed or your travel needs change after a year, the card will still have provided a decent overall lifetime value.

With some card that gives a $25 bonus, you don't really have that cushion.

The only card I've gotten in the last 4 years without a good SUB was BBP. I made an exception for that because I knew I'd be putting a lot of spend on it right away at 2x MRs.
What card(s) would you recommend for my style? Would you go with cashback like said above or a simple travel card like CSP or Venture? Note; most of my spend is school (8-12k a year), travel (3-4k), and dining (4-5k).

I'm not really up-to-date as to which issuers will approve an applicant with 10+ accounts within the last 12 months.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 01:23:16 GMT

@wasCB14 wrote:
@ToxikPH wrote:
@wasCB14 wrote:
The reason to get good SUBs (as in $300+ cash or 50k+ miles, assuming you use them) is that even if the card gets nerfed or your travel needs change after a year, the card will still have provided a decent overall lifetime value.

With some card that gives a $25 bonus, you don't really have that cushion.

The only card I've gotten in the last 4 years without a good SUB was BBP. I made an exception for that because I knew I'd be putting a lot of spend on it right away at 2x MRs.
What card(s) would you recommend for my style? Would you go with cashback like said above or a simple travel card like CSP or Venture? Note; most of my spend is school (8-12k a year), travel (3-4k), and dining (4-5k).
I'm not really up-to-date as to which issuers will approve an applicant with 10+ accounts within the last 12 months.

None of this thread was supposed to be about the immediate future. I believe I did mention I'm sitting in the garden just looking for a future plan.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 01:40:59 GMT

Check my math?

If I use the platinum credit for FHR twice a year and the airline credit the effective fee comes down to $150, at 2cpp I only have to spend $1500 a year on flights and hotels. For the gold using both credits, the EF is $30, easily made up with my food spend. The BBP then covers my college spend as non-category.

It looks like I can cut down to these 3 cards and come ahead even after the $800 in AF.

Re: What to do next? (College Student)

Aim_High — Wed, 18 Sep 2019 16:22:21 GMT

@ToxikPH wrote:
Check my math?

If I use the platinum credit for FHR twice a year and the airline credit the effective fee comes down to $150, at 2cpp I only have to spend $1500 a year on flights and hotels. For the gold using both credits, the EF is $30, easily made up with my food spend. The BBP then covers my college spend as non-category.

It looks like I can cut down to these 3 cards and come ahead even after the $800 in AF.

Not just your math. Your entire frame of reference and strategy needs reevaluation, IMO.

I believe that you have added way too many cards too quickly and unless your income rises substantially after graduation, you probably will not be able to easily sustain such a wide variety of cards once you get into the real world outside of college.

If I was a college student making $31K per year, the last thing I would do is commit to paying $1,085 in credit card AFs. ($550 Plat, $250 Gold, $95 Delta, $95 Hilton, $95 Venture). Similarly, I cannot imagine splurging on AMEX's "FHR" (Fine Hotels and Resorts) at a college student level income. It sounds to me like you're trying to justify the AF cost in your head. The real question is, "If I didn't have AMEX AF cards, would I still be staying at a Fine Hotel and Resort-level property?" If the card is making you change your normal behavior, then it isn't the card for you. In the same vein, I don't regularly dine at Ruth Chris Steak House, Cheesecake Factory, or Grubhub even though I dine out frequently and could afford to do so. Therefore, I would have to adapt behavior to get the $120 back on the Gold card. That's one of the reasons it's not for me, even though I could easily afford the AF on my salary. It just doesn't make financial sense.

I was confused when you said that, "I haven't ever thought of wanting to do international travel. Business/First class also seems like too much to me per $. I think the only international travel I would want to do is up north to Canada. The best class I've ever flown in is Comfort+ on Delta and that's good enough for me."

But then you also said, "I have never been seriously interested in cashback as a long term strategy."

Travel doesn't seem a priority but you've never considered cashback? There's absolutely nothing wrong with a cashback strategy and for many consumers, it's actually the smartest type of strategy. Using travel cards does not make you a smarter consumer, because they aren't for everybody. To me, basic credit cards and simple cashback cards are where someone begins, then works up to high-AF and travel cards -- BUT ONLY when their income and travel patterns are able to support that higher level of spend. You're rushing the process. And the travel points programs like AMEX MR, Chase UR, and Citi TY are best utilized for cabin and experience upgrades, so if you're happy in lower pass-category travel, why pursue points over cashback?

Don't compare your profiles to everyone on My Fico. There are members here making 10x to 20x or more your income with heavy monthly reimbursed spend from their employers for travel. And they've been out of college for 10, 20, even 30 years or more. Their card lineup should look different from yours. Different cards are designed for different consumers and target markets. They aren't all right for everyone.

Finally, remember there are also a lot of members on the forum who carry "Business" cards but they have legitimate business needs for spending, either because they own their own business or they are expected to pay and be reimbursed from their employer. Business cards don't have the same consumer protections under the 2009 CARD act. But moreover, card agreements actually prohibit consumers from using business-level cards for personal expenses. You said, "The BBP then covers my college spend as non-category." BBP or Blue Business Preferred is a business card, so is your college spending truly a business expense?

The cardmember agreement for BBP states, "By submitting this application, you, as an individual and the Authorizing Officer of the Company, (a) are requesting us to open an Account in the name of the Company, (b) are requesting that we issue Card(s) as you direct, (c) are agreeing to be jointly and severally liable with the Company for all charges to the account, and (d) are REPRESENTING THAT ALL CARD(S) ISSUED ON THE ACCOUNT WILL ONLY BE USED FOR COMMERCIAL OR BUSINESS PURPOSES."

(*AMEX capitalized that sentence; I did not.)

It just appears to me that there is a lot about your credit card lineup and credit-seeking behavior that does not agree with your profile, spending, and expectations.

Re: What to do next? (College Student)

ToxikPH — Wed, 18 Sep 2019 03:20:18 GMT

@Aim_High wrote:
@ToxikPH wrote:
Check my math?

If I use the platinum credit for FHR twice a year and the airline credit the effective fee comes down to $150, at 2cpp I only have to spend $1500 a year on flights and hotels. For the gold using both credits, the EF is $30, easily made up with my food spend. The BBP then covers my college spend as non-category.

It looks like I can cut down to these 3 cards and come ahead even after the $800 in AF.
Not just your math. Your entire frame of reference and strategy needs reevaluation, IMO.

I believe that you have added way too many cards too quickly and unless your income rises substantially after graduation, you probably will not be able to easily sustain such a wide variety of cards once you get into the real world outside of college.

If I was a college student making $31K per year, the last thing I would do is pay commit to paying $1,085 in credit card AFs. ($550 Plat, $250 Gold, $95 Delta, $95 Hilton, $95 Venture). Similarly, I cannot imagine splurging on AMEX's "FHR" (Fine Hotels and Resorts) at a college student level income. It sounds to me like you're trying to justify the AF cost in your head.   The real question is, "If I didn't have AMEX AF cards, would I still be staying at a Fine Hotel and Resort-level property?" If the card is making you change your normal behavior, then it isn't the card for you. In the same vein, I don't regularly dine at Ruth Chris Steak House, Cheesecake Factory, or Grubhub even though I dine out frequently and could afford to do so. Therefore, I would have to adapt behavior to get the $120 back on the Gold card. That's one of the reasons it's not for me, even though I could easily afford the AF on my salary. It just doesn't make financial sense.

I was confused when you said that, "I haven't ever thought of wanting to do international travel. Business/First class also seems like too much to me per $. I think the only international travel I would want to do is up north to Canada. The best class I've ever flown in is Comfort+ on Delta and that's good enough for me."

But then you also said, "I have never been seriously interested in cashback as a long term strategy."

Travel doesn't seem a priority but you've never considered cashback?    There's absolutely nothing wrong with a cashback strategy and for many consumers, it's actually the smartest type of strategy. Using travel cards does not make you a smarter consumer, because they aren't for everybody. To me, basic credit cards and simple cashback cards are where someone begins, then works up to high-AF and travel cards -- BUT ONLY when their income and travel patterns are able to support that higher level of spend. You're rushing the process. And the travel points programs like AMEX MR, Chase UR, and Citi TY are best utilized for cabin and experience upgrades, so if you're happy in lower pass-category travel, why pursue points over cashback?

Don't compare your profiles to everyone on My Fico. There are members here making 10x to 20x or more your income with heavy monthly reimbursed spend from their employers for travel. And they've been out of college for 10, 20, even 30 years or more. Their card lineup should look different from yours. Different cards are designed for different consumers and target markets. They aren't all right for everyone.

Finally, remember there are also a lot of members on the forum who carry "Business" cards but they have legitimate business needs for spending, either because they own their own business or they are expected to pay and be reimbursed from their employer. Business cards don't have the same consumer protections under the 2009 CARD act. But moreover, card agreements actually prohibit consumers from using business-level cards for personal expenses. You said, "The BBP then covers my college spend as non-category." BBP or Blue Business Preferred is a business card, so is your college spending truly a business expense?

The cardmember agreement for BBP states, "By submitting this application, you, as an individual and the Authorizing Officer of the Company, (a) are requesting us to open an Account in the name of the Company, (b) are requesting that we issue Card(s) as you direct, (c) are agreeing to be jointly and severally liable with the Company for all charges to the account, and (d) are REPRESENTING THAT ALL CARD(S) ISSUED ON THE ACCOUNT WILL ONLY BE USED FOR COMMERCIAL OR BUSINESS PURPOSES."
(*AMEX capitalized that sentence; I did not.)

It just appears to me that there is a lot about your credit card lineup and credit-seeking behavior that does not agree with your profile, spending, and expectations.

I would totally be willing to stay at these hotels even without the Platinum and the dining credit on the Gold is totally worth it because I go to Shake Shack all the time. Travel is a priority for me but domestic not international like Europe.

I'm currently majoring in Finance so after college income should shoot up considerably. I also don't think that my travel would change in quality just quantity. I love flying comfort+ and staying at FHR style hotels. I have no problem affording these things as I don't have any other expenses besides a $410 car payment and school.

The school can totally be put on the BBP as well because I run a photography business and going after a business degree like finance would be fine for such an expense.

Finally, my problem with cashback is I just don't see any cards that line up for me as well as the Plat/Gold. Given that I don't see any error in my math I don't see a problem with using these cards as my main/only cards. Is there something I'm missing?