My Credit Card History
Over the past year, my view on credit and credit cards has drastically shifted. I’d first like to give a brief background of my history with credit cards.
My first job was in 2015 which gave me a good reason to get a CC. Previously, I just used a debit card tied to my Checking. Since I was banking with Bank of America, I went with one of their entry cashback cards.
With no real knowledge of the true power of these pieces of plastic, this BoA card was my daily driver and provided:
3% for Select Categories, 2% on Gas, 1% everything else
I wasn’t using it for much so this was perfect for me at the time.
Skip to Nov. 2018 – I got an offer for a Chase Southwest Plus. I switched to this as my daily card to start building my points. The BoA card was set to 3% cashback for Online Purchases (all of my reoccurring subscriptions were sent to this card).
Why do I use Credit Cards?
First I would like to say that above all, the most important thing about credit cards is Responsible Spending. While I need a whole post just about this topic, I’ll keep it short – Don’t spend more than you can make.
As a human and/or business owner, you’re going to be spending money no matter what. Why not benefit in some way from those dollars being spent.
I like to call them “Discounted Dollars”
The two major routes are: Cashback and Points. Some cards offer a percent of cashback on money being spent. These are very nice and simple, direct cash coming back in. Other cards will offer points for money spent. These can be great to get access to cheap or free products/services from various companies.
Credit card companies offer “Sign Up Bonuses” if you get their card. This is something I look for when choosing what credit cards to get. Reddit’s /r/churning is a great place to learn about credit cards and which cards have the best bonuses.
I’ve known the power of these benefits for about 3 years but was limited by the amount I was making and the need to spend more.
In mid-late 2018 I co-founded an Amazon Business. This became a perfect opportunity to consistently spend money for credit card benefits. Not only did the credit allow us additional money to use for inventory, we greatly benefited from the points.
Major Spending
I try to stay pretty frugal in my personal spending, my budget allows $1,100-$1,300/mo depending on food and gas.
I spend the most on business related expenses. Roughly 85% of all current spending is on inventory acquisition.
Personal Cards (In Order of Use)
Chase Southwest Plus ($69/yr) – Daily card for all my personal expenses. Any time I travel non-business, I use this card for any related purchases because I can apply points to hotels and flights.
Benefit: This card gives 2 points-$1 on flights/hotels and 1 point-$1 on everything else.
*Sign up with link and receive 40,000 points with $1k spent in first 3mo*
BoA Cash Rewards ($0/yr) – Used for purchasing eBay shipping labels. I get 3% for online purchases. Eventually I will stop using this card and keep it open to help boost my Credit Utilization Ratio.
Benefit: This card gives 3% for Select Categories, 2% on Gas, 1% everything else as previously stated.
Business Cards (In Order of Use)
Chase Business Ink ($0/yr) – This is the main card used for inventory. It’s gives 1.5% cashback in Ultimate Rewards points. The points can be used for flights, hotels, car rentals, and a wide range of other things. The points can also be converted to cash at 100:1. This is also a great intro business card to the Chase family.
Benefit: It’s gives 1.5% cashback in Ultimate Rewards points.
*Sign up with link and receive $500 with $3k spent in first 3mo*
American Express Hilton Honors Business Card ($95/yr) – A new card aquired, will be used for anything travel related (gas, hotels, cars, flights). In the past, my business partner and I went on a product sourcing trip and both slept in a mini van. While a great economy solution to hotels, not always ideal. Because of opportunities this year and next, this card will come in handy to cover all hotel needs.
Benefit: 12x pts on Hilton related, 6x on business related (gas, phone, shipping), 6x on resturants, flights and car rentals, 3x on everything else.
American Express Cash Magnet ($0/yr) – This card is used specifically to finance a private-label project I’m working on. I got it as an intro card to the Amex family. 0% APR for 18 months is a great pull as well.
Benefit: It provides 1.5% cashback on all purchases.
*Sign up with link and receive $150 with $1k spent in first 3mo*
Target Circle RedCard ($0/yr) – Sometimes we can find inventory from Target so this card is a great move. Being a member of Target Circle, a 1% cashback for non-RedCard payments are rewarded.
Benefit: It allows Free 2-Day shipping AND 5% discount on purchases.
Future Cards
Only in the past 6 months have I been researching credit cards and learning about churning. My goal in the next 1-2 years is to have a way to justify a premium CC (high annual fee). The current constraint is spending. I’m focused on spending more money while simultaneously increasing cash flow to justify spending.
I will continue to add cards to my portfolio and keep adding to the Credit Check segment of my blog.
Have a great day and don’t forget…
Don’t Wait, Dive In!
-David
