I’m a 30-something that is getting ready to move to my first doctor job in a MCOL Midwest metro area soon. I have been working on being more financially literate especially regarding credit cards, student loans, and lifestyle inflation. The cards I have right now are cash back but I am looking to leverage some of the increased spending I will have into travel.
My current travel habits include 1-2 domestic trips a year and 1 international trip every 2 years. With my increased salary and more time off, I want to increase the amount of domestic trips to 3-4 and to travel internationally at least once a year. I would consider myself to be a budget-conscious traveler. I fly economy but will occasionally pay for exit row or bulkheads. All of my international trips have been in the western hemisphere, so I can’t say I know the value of upgraded or lie flat seats, but I don’t think I would get them if not for points. I am happy to stay in mid-tier hotel rooms, as I usually like to go out and explore instead of spending the entire vacation lounging on a resort or a beach. I almost always book directly with airlines/hotels but could see using portals occasionally for offsetting AF or if very high value.
I would favor simplicity, which is what draws me to the Capital One cards or the ease of staying within the Citi ecosystem by pursuing the tri/quadfecta. All the reading seems to highlight Chase points the most for getting value, though I feel I would dread keeping up with the rotating categories of a Chase Freedom Flex and for my style of travel I’m not sure if it would be worth it or not; would love some insight on this, especially from anyone who, like me, is a high earner but lower spender or who favors budget travel.
CREDIT PROFILE
Current credit cards you are the primary account holder of: local credit union Visa ($7500 limit, 6/2010), Citi Double Cash ($5000 limit, 7/2021) FICO Scores with source: 752 (Experian) Oldest credit card account age with you as primary name on the account: 14 years Number of personal credit cards approved for in the past 6 months: 0 Number of personal credit cards approved for in the past 12 months: 0 Number of personal credit cards approved for in the past 24 months: 0 Annual income: $65k, will be increasing to $275k with new job; annual spend would be closer to $125k since I’m paying off massive loans, catching up on retirement savings, and probably looking to buy a house in 2-3 years.
CATEGORIES
OK with category-specific cards?: Yes OK with rotating category cards?: Yes, though I would greatly prefer not to Estimate average monthly spend in the categories below. Only include what you can pay by credit card.
Dining: $200-300
Groceries: $300-400 (variable component of Costco shopping, otherwise mostly at Aldi)
Gas: $100, occasionally at Costco if timing works out
Travel: $175, anticipate this increasing in the near future
Do you plan on using this card abroad for a significant length of time?: No
Any other categories or stores with significant, regular credit card spend?: $750 for disability insurance, $100 on Amazon, $100 for internet/phone
Any other significant, regular credit card spend you didn’t include above?: $0
Can you pay rent by credit card?: No
MEMBERSHIPS & SUBSCRIPTIONS
Current member of Amazon Prime?: Yes
Current Verizon postpaid customer?: No
Current member of Costco or Sam’s Club?: Costco
Currently paying $13.99/month or more for Disney Bundle or other Hulu services?: No
Current member of Chase, US Bank, or any other big bank?: No
Active US military?: No
Are you open to Business Cards?: No
PURPOSE
What’s the purpose of your next card?: Travel
If you answered “travel rewards”, do you have a preferred airline and/or hotel chain?: No loyalty but tend to book Southwest for free cancellation/price matching
Do you have any cards you’ve been looking at?: Citi Strata Premier, Chase Sapphire Preferred, Chase Sapphire Reserve, Capital One Venture X, Wells Fargo Autograph (probably not this one though)
Points. I could turn my Citi DC into an actually decent cash back set up but since I’m so early on in my career and more budget-conscious, I feel like points will probably get me further. Happy to hear more if this is an incorrect assumption though.
@Firth
Sorry, my question was maybe too open ended. The biggest return on the points is usually to transfer to a transfer partner. Were you hoping to cash the points in on hotel stays? Flights? Economy or aspirational travel? Foreign or domestic trips?
@Tal
Gotcha. Probably focusing on using points on offsetting costs of international flights and hotels and maybe the occasional seat upgrade. I’m not much into aspirational/luxury. Domestic trips I am happy to stay in economy but will just pay for fewer layovers and more convenient times.
@Firth
Capital One’s transfer partners skew international (though you can sometimes book domestically through them). Hyatt is Chase’s most valuable transfer partner, though has a somewhat more limited footprint. Ironically, I tend to view Chase and Capital One as mirrors:
VX has big returns on portal hotels and rental cars, and where the points may be best spent on international flights
CSP has less of a bias for hotel and rental cars, and where the points are best spent on Hyatt
Costco doesn’t code as grocery for most issuers, including C1 and Chase. Beyond that, Chase also has poorer coverage for groceries.
I’d give the C1 Duo a hard look —
Capital One Savor (formerly SavorOne) (no AF)
3% grocery (note that Walmart, Target, and club warehouses don’t code as grocery)
3% dining
3% entertainment
3% popular streaming
5% hotels and rental cars booked through Capital One Travel
8% Capital One Entertainment
1% otherwise
Mastercard
No FTF
Savor cashback can be converted to miles for Venture X.
Capital One Venture X ($395 AF)
10x hotels and rental cars booked through Capital One Travel
5x flights and vacation rentals booked through Capital One Travel
2x catch-all
$300 annual Capital One Travel credit
10K anniversary miles
Visa Infinite
No FTF
You can do better than 1 cpp by transferring your miles to transfer partners, but 1 cpp is a good floor for discussion purposes, so the effective AF is -$5 if you’re sure you can use the travel credit each year.
In exchange for your trouble, you get:
Priority Pass for each cardholder (including authorized users)
Capital One lounge access (currently at DCA, DEN, DFW, and IAD)
No cost for authorized user cards
Global Entry credit every 4 years
Primary auto rental coverage
President’s Circle status with Hertz (you can use it to status match with other rental car companies)
Trip delay, cancellation, and interruption coverage
Purchase security, extended warranty, and return protection coverage
Cell phone protection
One quirk is that Capital One’s transfer partners skew international, however you can often book domestically through them. But the travel eraser is a guaranteed 1 cpp valuation if you want to keep it simple. Capital One Travel is run on Hopper and price matches exact outside offerings.
@Tal
I think that makes sense since I don’t value aspirational travel and hotels (and the Chase-Hyatt partnership) as highly. Plus Capital One has a simpler two card setup.
I guess my next question is what to do with my current cards. I’ll probably put my local credit union’s card in the sock drawer because it’s my oldest account and has no AF. Would doing a PC of the Double Cash to a Custom Cash make sense since it would be redundant with the Venture X?
PC (product change) your CDC to a CCC (for gas), as I suspect you anticipated (VX + Savor + CCC is surprisingly popular)
Consider your application strategy. How patient are you to get the grocery coverage? I have a thought on strategy that would get you two large sign-up bonuses, but you’d have to be patient for a subsequent PC.
@Tal
Grocery is usually my highest expense after rent but I’m not in a hurry. Since I’ll be moving soon, I’ll probably be eating out more to explore my new city and buying furniture for a larger apartment. Would love to hear the thoughts on an application strategy, especially since I am on the thinner side with only two credit cards.
@Firth
I’ll put three distinct application strategies before you to see what resonates. Note that a second C1 application needs to be no sooner than the 91st day after first account approval, VX requires at least a $10K CL, and that both VX and Venture offer Global Entry credits.
Savor, then VX. Benefit here is you get grocery and dining immediately. You can continue using your CU card for non-category spend in the meantime.
VX, then Savor. Get the big SUB while your expenses are high.
Venture, then VX. PC your Venture to Savor if/when you can (and after you milked its Global Entry credit). Advantage is you get the two big SUBs while your spending may be artificially high, but the downside is you might be waiting a while to try to PC the Venture to Savor.
@Tal
I like #3 to maximize the SUBs, though #2 would be very straightforward. I’m still new to this but if I understand correctly then the PC would be after the second AF posts, correct?
Firth said: @Tal
I like #3 to maximize the SUBs, though #2 would be very straightforward. I’m still new to this but if I understand correctly then the PC would be after the second AF posts, correct?
@Tal
I think it’s Dulles (IAD rather than Reagan (DCA), but nonetheless I agree with your overall take and this may work well for the OP. I run the C1 duo for ~75% of my spend and while I have the nla $95 savor, the flexibility to use as cash back or transfer as points to VX is something I value highly.
Would make it easy and just get a US Bank Autograph or other no AF 3-4% travel card matched with a no AF no FTF 2% card. That’s my setup as we ‘travel’ in state only via road trip and stay in 3-star hotels as a family of 5. My life is too busy to juggle card coupons and credits, so I go for simplicity that will make every dollar spent earn something.
@Danielle
Honestly, I considered the Autograph briefly for that reason, but a Strata or Venture X doesn’t seem like it would be that much more difficult to manage? (So long as I remember to redeem the travel credit for the Venture X once and not be stuck with that AF.)
@Firth
Strata Premier is okay cause of the 2-year extended warranty, VX cause of the simple to use credit or US Bank cause of the 4.5% cashback and simple credit. They’re not for me right now, but definitely in the future once I don’t have to juggle 3 kids under 5.