I get this a lot. People are a mixture of confused, concerned and amazed when they see the credit cards in my wallet. The thing is, compared to many people involved with points and miles I’m definitely a lightweight. Looking through blogger sites and message boards you’ll easily find people with 20, 30, or 40+ cards.
Only irresponsible people have a lot of credit cards!
Growing up, I always had the sense that credit cards were “bad” and a sign of irresponsible money management. Credit cards were a way for people to spend outside their means and get themselves into debt. Sadly, it’s a reality for far too many people but the number of cards a person has isn’t necessarily a problem.
I’ve naturally been fairly disciplined with my credit card spending, even before I got into points and miles. There was a time right out of college where I carried a balance of a few thousand dollars for a few months. I quickly learned that wasn’t a situation I wanted to be in long term as the math is clearly stacked against you. Every since then, outside of a rare forgotten payment we don’t carry a balance on any of our cards. The scheduling of automatic payments has made that a whole lot easier!
Since I’m the one in the family responsible for making sure the bills get paid, I end up checking the balances on our cards most every week. I’ve just made it part of my routine to check to check the balance and look for any unexpected charges.
The number one rule in the points and miles game is that if you carry a balance on your credit card, you’re on the losing side. The interest payments offset the value of the points and miles you’re earning. If you’re carrying a balance on your card regularly, then points and miles likely aren’t right for you.
Too bad about your credit score, right?
People often believe we must have poor credit because of all the cards. The opposite is true. Since we pay off our balance every month, the percentage of the credit we have that we’re actually using is pretty low. We have more credit than we’re using and banks generally like that because it shows we’re able to responsible manage that credit.
Since we’ve been disciplined with our card use, it’s helped our credit scores and we’re rarely denied when applying for new cards. That’s not to say we never get denied a card, though credit score usually isn’t the factor in those cases. We’re also very strategic about applying for cards and don’t apply for too many at one time. The ones we’re signing up for have a signup bonus and we want to make sure we can spend enough to get those bonuses without having to buy things we wouldn’t normally be buying. It doesn’t make sense to sign up for a card if we won’t be able to get the bonus!
It must be so confusing to keep track!
It can definitely be confusing to figure out which card to use for which purpose. With different cards having different bonus categories, knowing which card to use to get the most return can be a challenge. I personally find the minutia of the different programs to be fascinating so I enjoy the challenge. It must be the programmer in me that’s always looking for a way to optimize and find the “bug” or loophole in the system to work to my advantage.
There are mobile apps where you can enter which cards you have and it will recommend a card to use for a specific purchase. That can be helpful, though I tend to rely on my own memory. Since I’ve waded into the points and miles game I’ve been able to master the cards I had one at a time. Adding a new card to existing knowledge is easier than learning the everything from scratch.
My wife, on the other hand, doesn’t want to have to think about it, so she mainly uses one of her cards for almost all her non-business expenses. I’ve added some simple recommendations for when to use other cards, such using a specific card for plane tickets and a Lyft ride, for example. That seems to work for us. Your mileage may vary!
You spend how much in annual fees?!?
It’s a big number, I won’t lie. Between my wife and I we spend over $3000 per year in annual fees. Most of those annual fees are larger than they are in practice, though. For example one of the cards we each have has a $450 a year annual fee, but it also has a $300 a year travel credit. The travel credit wipes off the first $300 in travel expenses you spend in the year, such as parking, tolls, airfare, hotels, Lyft/Uber/taxis and more. We spend much more than that $600 per year on travel expenses so the effective annual fee of those cards is $150 each. The perks on that card and all the other cards we have are more than worth the fees. We get much more in value out of those cards than we pay in the annual fees or else we wouldn’t keep the card!
Do you really use them all?
I don’t even keep all my cards in my wallet so the short answer is no. I’m not even sure they would all fit! I have a few cards I use for everyday spending and a few cards I got just for the initial bonus or ongoing bonus which I keep in a special drawer. I pull them out a couple times a year to use them for something small like a tank of gas or some groceries so the bank won’t turn them off on me, but those cards still have benefits I use that more than make up for the annual fee.
For example, one card in that category has a $95 annual fee. Now why would pay $95 a year for a card I don’t use. Well, one of the benefits fo the card is a yearly certificate for a free night in a hotel. This can be used in thousands of different hotels in the US and around the world whenever and wherever we choose within in the one year expiration period. There are no timeshare presentations or any such tricks. I just go online at the hotel website, chose to redeem the certificate and search for the hotel I want to use it at. Given our travel We’re definitely going to stay in a hotel so we’ll definitely use that free night in a hotel. The hotel is almost certainly going to cost more than $95. We’re looking at using one of those free night certificates in a hotel that was nearly $300 for the night we have reserved. We’re effectively paying $95 for a $300 room we were going to stay in anyways. The card also gives us elite status with the hotel chain as part of the annual fee. See: The Joys of Status
So really, how many cards do you have?
Between the two of us we currently have 12 cards. Of those, I use 2 regularly and 3 others semi-regularly. My wife uses 2 regularly. The remaining cards are saved in the drawer and only come out for special occasions and are used mainly for their ongoing bonuses like free nights or preferred airline benefits.
We apply for 2-3 cards per year based on specific signup bonus offers available at the time and our travel goals.
Tomatico Travels 
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