@Anonymous wrote:
@elixerin wrote:dang, who woulda thought it was just that simpL
It's pretty similar to any consumer thing. You might ask "Why do people have such expensive cars/houses/private schools?" Some percentage might be doing it for perceived status reasons, another set for well thought out reasons ("I need this large urban house for my meth lab. Lots of space to store product and dealers close by, police wouldn't think of looking here"), and others simply because they can afford to and don't see any reason not to.
I come to the MyFICO forums to learn, but I stay because of the witty repartee. I actually laughed out loud on the meth lab reference. Continue...
@elixerin wrote:i can see houses or cars for personal enjoyment but what "enjoyment" tbh comes from a plastic or "metal" squares nowadays. You can chalk up the cars and houses as an enjoyment expense but how does that genuinely apply to credit cards? lol
For some of us, what we've been through in the credit game/war/ life lol, just getting a certain piece of plastic makes us feel like we accomplished something. Sure its only plastic and doesnt mean much in grsnd scheme of life but heck, msny of us wouldnt be on this board if we didnt find some joy with this plastic
@AverageJoesCredit wrote:
@elixerin wrote:i can see houses or cars for personal enjoyment but what "enjoyment" tbh comes from a plastic or "metal" squares nowadays. You can chalk up the cars and houses as an enjoyment expense but how does that genuinely apply to credit cards? lol
For some of us, what we've been through in the credit game/war/ life lol, just getting a certain piece of plastic makes us feel like we accomplished something. Sure its only plastic and doesnt mean much in grsnd scheme of life but heck, msny of us wouldnt be on this board if we didnt find some joy with this plastic
Or metal as the case may be sometimes as @Anonymous pointed out lol
I can’t speak for the folks have the high end cards, but my strategy/justification for AFs is simple: “Does this card offer me something better or unique that justifies the cost of the AF?” In my case specifically, I only have one AF card currently, but plan on adding at least two more.
On my BCP, I calculated the what my cash back would be for the year and subtracted the AF. I found that even with the AF, I’d net more cash back than any non AF card I knew of for groceries. The other 2 cards I plan on getting have $50 AFs (NFCU Flagship and Synovus Travel Rewards) and in their cases, they both offer travel rewards and have other categories that would I “pay for” the AF with while also offering something else that will strengthen card lineup. In these cases. The Flagship has an awesome SUB and 2% on everything and the Synovus card has a selectable 3% category and 18 month 0% intro fee.
We don’t fly, nor stay in chain Hotels, so straight cash back cards for our travel and entertainment spend are the only thing that makes sense. I imagine the people with high AFs follow a similar strategy for in that their travel (and overall) spend earns them enough rewards to justify the high AFs. The high AF would be a big net loss for me, so I avoid them, just as someone with low grocery spend avoids the BCP because the $95 AF is a loss for them.
On my BCP, I calculated the what my cash back would be for the year and subtracted the AF. I found that even with the AF, I’d net more cash back than any non AF card I knew of for groceries. The other 2 cards I plan on getting have $50 AFs (NFCU Flagship and Synovus Travel Rewards) and in their cases, they both offer travel rewards and have other categories that would I “pay for” the AF with while also offering something else that will strengthen card lineup. In these cases. The Flagship has an awesome SUB and 2% on everything and the Synovus card has a selectable 3% category and 18 month 0% intro fee.
We don’t fly, nor stay in chain Hotels, so straight cash back cards for our travel and entertainment spend are the only thing that makes sense. I imagine the people with high AFs follow a similar strategy for in that their travel (and overall) spend earns them enough rewards to justify the high AFs. The high AF would be a big net loss for me, so I avoid them, just as someone with low grocery spend avoids the BCP because the $95 AF is a loss for them.
@simplynoir wrote:
@AverageJoesCredit wrote:
@elixerin wrote:i can see houses or cars for personal enjoyment but what "enjoyment" tbh comes from a plastic or "metal" squares nowadays. You can chalk up the cars and houses as an enjoyment expense but how does that genuinely apply to credit cards? lol
For some of us, what we've been through in the credit game/war/ life lol, just getting a certain piece of plastic makes us feel like we accomplished something. Sure its only plastic and doesnt mean much in grsnd scheme of life but heck, msny of us wouldnt be on this board if we didnt find some joy with this plastic
Or metal as the case may be sometimes as @Anonymous pointed out lol
Lol, please @simplynoir , keep that on dl or @FinStar might send out the black cat snd send us over to SB😄
I'm over the $3k mark just with Amex alone, but for me it's because my AF cards give me more value than the cost, and all work toward my three primary rewards redemption strategies:
- Revenue travel on Delta and its partners.
- Award travel on Delta and its partners.
- Award stays at Marriott properties.
This my own personal justification based on my spend, my strategies, and my life. Here's the breakdown:
- Amex Business Platinum ($595) instantly made my large pool of MRs worth 54% more when I use them for booking flights through Amex Travel. If I factor in the airline and Dell credits, it costs me $195 a year to get thousands of additional value. (Plus about $1700 as a SUB.)
- Amex Platinum ($550 + $175 for AUs) nets me back about 10% on paid flights. That $725 is reduced by the airline, Sak's, and Uber credits, bringing it down to a much more reasonable $225 and also provides lounge access as well as hotel status to AUs. That combined with my own lounge use justifies it easily (even though I have Delta SkyClub access with Reserve and partner lounge access on international flights due to status anyway).
- Amex Gold ($250) combined with Business Platinum is netting me about 8% back on restaurants and grocery spend. That $250 is reduced by the airline and dining credits, bringing it down to a paltry $30 a year.
- Amex Delta Reserve ($550) allows me to spend $30,000 a year to both waive the $ requirement for Delta status up to Platinum Medallion, and to get an additional 15,000 Mileage Qualifying Miles to meet the 75,000 MQMs I need for Platinum Medallion status (easily valued at thousands of dollars). The card also gives me an advantage over those who do not have the card when it comes to upgrades, as this is #3 of the hierarchy for upgrades after status and fare class. Since I'm choosy with how I redeem, I use this as my non-category card and can always get at least 2% net back.
- Amex Delta Platinum ($250) The companion certificate alone covers the AF, so it's really just prepaying for travel.
- Amex Delta Platinum Business ($250) The companion certificate alone covers the AF, so it's really just prepaying for travel.
- Amex Marriott Bonvoy Brilliant ($450) This earns 6x Marriott points at Marriott hotels. There is a $300 annual credit which applies to all room charges, including the stay itself, so the real cost is $150. The annual free night certificate (up to 50k) would also more than cover the entire AF; last year's covered a night that would have been over $700.
- Bank of America Premium Rewards ($95) There is a $100 annual airline credit that covers the AF.
- Chase Sapphire Reserve ($550 + $75 AU) Effectively earns 6% back for me on travel expenses and restaurants where Amex is not accepted (fortunately becoming rare), about 10% back on Freedom categories, and about 3% back on Freedom Unlimited spend. $300 travel credit reduces net AF with AU to $325, but the 15% Lyft discount and effectively 20% back on Lyft is insane and more than covers the rest.
- Citi Premier ($95) Effectively earns about 5.7% back on gas and travel (including kiosks which won't accept metal CSR) and about 3.8% on entertainment, museums, etc. Has frequent 5x bonus offers.
- US Bank Altitude Reserve ($400) Travel credit of $325 and 12 gogoinflight passes more than cover the AF. Used with Apple Pay, gets an effective 6% back.
All of that (except Marriott) is pretty much my revenue flight strategy. Note the repeated use of "effective cash back" because my values include the return in SkyMiles that I get from Delta on revenue flights, which includes any flights done in travel portals on the above cards. So while Amex Travel may really only be getting me 1.54 cents per Membership Reward (more when international flight program or insider fares are at play), after calculating what I earn back from Delta for the flight not being an award flight it's really closer to 2 cents and same for other programs like US Bank and Chase where the portal has a 50% bonus.
Also keep in mind that Membership Rewards, ThankYou Points, Ultimate Rewards, SkyMiles, and Marriott points can all be used toward award travel on Delta and its partners, either directly with Delta or through Virgin Atlantic, Air France/KLM, and other partners. As long as everything plays nice and there is more value than the fee costs, it makes perfect sense to me to gain the rewards.
I don't travel by plane and don't need hotels too often, and the only major trips I take are cruises. As for my cards, I have $0 total annual fees and I've got about $60 stored in cash back bonuses from January til now. At this rate I'll have ~$240 in cash back by the end of the year, so my lifestyle/spending doesn't justify annual fees.
It is interesting to see how they benefit others though. Seems like those cards offer some pretty decent rewards.
