When used responsibly, credit cards can have many benefits.
They allow you to build and grow your credit score receive
rewards like points, cashback and miles provide buyer and
fraud protections. And in some cases, extended warranties, or
review of national credit report data shows that Americans have
an average of three credit cards, and they carry an average
balance of about 50 $900. A car for groceries, one for travel,
and another for dining out. And that's challenging enough for
most people. Considering the average amount of credit card
debt the average American is struggling to pay off. But what
about when you have 10 or even 20 cards,
I currently have 21 active credit cards,
I have 19 credit cards, I currently have about 10 credit
cards,
having many credit cards might sound like a bad idea,
especially if you tend to overspend, rack up fees and Miss
payments. But I spoke to a few people that say it's all worth
it. So how do they do it without damaging their credit? What are
their fees? And ultimately, is having 10 or more credit cards
pay off for them? So what do you hope to get out of those cards?
Why that many?
I mindset, it's especially while traveling was that if I was
going to be spending my money in these different places while
traveling, I want it to get different types of value out of
it. Whether that be cashback different points,
I enjoy doing credit card churning. So I like to get
credit cards that have cashback bonuses after a certain spend
amount, because that helps me reach my financial goals and
just makes grocery spending just a little bit more affordable.
So let's talk about the types of cards you have give me a
breakdown of what you have in your wallet. And why you decided
to
choose those. I have probably six or seven that are connected
with a credit card currency, such as American Express, or
Chase. They're not affiliated with a specific airline or a
specific hotel program. So by definition, they give you more
flexibility in terms of earning. But then most importantly, using
those points, I would say then have five or six cards that are
connected with a particular airline or a particular hotel
loyalty program. And then the remainder of my wallet are kind
of multi purpose mixed use credit cards,
most of the credit cards have very similar categories. 2% on
groceries, 3% on gas, so whenever I'm getting a new
credit card, it's typically for that signup
bonus, I have one store specific credit card, I have a one point
space credit card, and then the rest are all cash back credit
cards. So if you have that many cards, you are paying annual
fees, right? So what is your return on investment, and how do
you make paying those fees work,
I have one card with an annual fee and I pay $89 a year each
year, I would say I get about 500 to $1,000 in value, I kind
of like pick a card, work with it, use that card for a while
and then switch. But I don't close them.
My entire credit card churning process is getting credit cards
that have no monthly fees, I don't really use all 19 of my
credit card. But My typical day to day spendings, I have a few
credit cards. And then when I'm trying to turn a credit card, my
goal is to use it on something that I know I'm going to be
purchasing. So if I have a big purchase coming up, I'll get a
credit card for that, for example, I'll be getting a new
iPhone. So I have already gone and gotten two credit cards out
for that purchase. I've got two cards that have 1000 spend get
200 back,
I am incurring about $3,800 in annual fees across the 21 cards
that I have open. And I estimate that I would get easily $10,000
worth of rewards every single year just by having these cards
and using them very strategically, the rewards
really go into two buckets. So the first would be the points or
miles that I'm earning just on my everyday spending. Then the
other bucket are the ongoing rewards that are provided on
these cards.
So I imagine if you carry that many cards, there has to be some
sort of organization at play. How do you keep track of having
that many
I keep a running ledger where I have the estimated payment dates
for every single one of my credit cards. And I generally
project this out anywhere from four to five months in advance.
So this makes sure that based on my typical spending, I'm not
going beyond my means that I'm still taking in more than I'm
actually spending one on paying these credit card bills. I have
an application in my phone that operates kind of like a calendar
with reminders, what I do is I go in and I'll set like specific
reminders so that I know each month when I need to pay off
certain cards. I've never ever missed a payment so I keep track
of it because honestly it can be very overwhelming.
I don't really spend a lot of money and I pay off my credit
cards right away. So I don't really ever keep track of how
much I spend on a monthly basis. I just pay off as soon as the
charge comes in. However you manage it. It's critical to make
sure that you are paying those bills in full And on time so
that you don't rack up any of those interest charges or any of
those late payment fees that can cancel out the rewards you're
earning or have a real negative impact on your credit score.