12 Travel and Credit Card Tips for Greater Value and Enjoyment (Part 2)

A few weeks ago, we provided Part 1 of this two part series.  These are additional suggestions on how you can optimize travel and other rewards, as you spend money.

We hope these can help you to create some wonderful travel and other experiences with your family and friends.

Consider these various tips and ideas.  If they make sense with your lifestyle, travel or spending habits, implement them.

7. Be strategic about using credit cards that pay significant quarterly bonus percentages.

  •  Pay attention to quarterly bonuses and remember to register each quarter to activate them.
      • Credit cards such as Discover and Chase Freedom offer quarterly bonus categories, which are worth paying attention to. They vary and you must register online each quarter. These are often 5% rewards on spending in certain categories you likely spend anyway, such as gas, restaurants, home improvement stores, movies, Amazon or department stores.
      • Keys: you need to register quarterly and keep track of what the card is offering in each incentive category each quarter. The extra effort should be worthwhile.
  • Costco branded credit cards have always had good cash back reward percentages. Costco is switching from American Express to Citi / Visa effective June 20th. The new Costco Citi Visa will offer 4% rewards on gas purchases and 3% rewards on restaurants and travel purchases, such as airfare, hotels and car rentals. If you shop at Costco, these are great reward incentives.
  • You should strategically decide how you want to spend and decide if you want to earn cash back for certain purchases, and reward points for future use for other items. For example, you may want to use a Costco card for gas purchases to get 4% cash back, but use a hotel branded credit card for many other purchases, to accumulate points for use on a specific trip or destination.
8. Join hotel reward programs and get their branded credit card.  Just do it. I did this a few years ago, for the chains I frequent the most and it has been very worthwhile. The benefits can be significant.
  • My wife and I planned a trip for next fall and the hotel will be free for 5 nights, as we are redeeming points which I accumulated with hotel stays and purchases on their credit card. Between the 4 nights I’m using points and the 5th night they give for free when redeeming points, I expect that the return should be very significant, far above the typical 1% on many cash back reward programs.
  • For many hotel and airline cards, you can accumulate points and perks much faster through your spending then through actual stays or travel, especially if you reach elite status levels. (See more on this in #3 in Part 1 of this post).

9. For longer stays, consider paying for a premium credit card which provides the 4th night for free on a 4 night stay. As discussed in the prior post, Citi Prestige and Amex Platinum credit cards provide this perk, which can easily pay for the card many times over, depending on your travels. If you are planning a stay for 4 or more nights at least once in a year, particularly to an expensive location, getting one of these cards should be seriously considered. I have not obtained one of these cards yet, but it is next on my list.

  • These cards would be optimal if you plan to travel to a major city for 4 or more nights or to a resort in high season. Think New York City, San Francisco or places like Grand Cayman or southern Florida resorts in the winter.
10. Pay attention to bonus point offers for obtaining new credit cards.  Monitoring bonus offers, which you can do by following websites such as www.thepointsguy.com, can pay off.
  • Just applying and getting certain credit cards can get you free travel, at no cost.
  • I recently got a Starwood hotel credit card for free, with enough bonus reward points that will provide at least $1,000 in room value, depending on when and where I stay.
  • Be selective about how many new cards you apply for within a 3-6 month time frame and what bank the credit cards are from. You should not apply for too many at once and not have too many from the same bank or financial institution.

11. Consider your everyday spending and how to charge it.

  • First, take advantage of high reward categories and cards that offer quarterly bonuses (see item 7 above).
  • Then, determine which cards would be best for airfare, hotels, restaurants and car rentals. Each credit card can be different, offering 1X, 2X or 3X points, depending on the credit card and their definition.
  • Next determine how to optimize your spending on all the other things you charge, which generally don’t fit into the “bonus” categories, so you can try to earn above the standard 1% on that spending.
  • I recommend learning about Chase’s Ultimate Rewards program, which is available via their Chase Sapphire Preferred and certain Chase business credit cards.
    • With Chase Ultimate Rewards, you can earn an extra 20-25% benefit by linking Chase Freedom and Freedom Unlimited credit cards to Ultimate Rewards credit cards and then book travel or transfer points through Ultimate Rewards.
      • Before I was fully aware of this extra benefit, I previously cashed in Chase Ultimate Rewards points for 1:1 cash back. With the Ultimate Rewards travel benefit, I could have gotten a 25% increased benefit. Don’t cash in Ultimate Rewards for cash, use them for various travel benefits with many different travel partners.
    • With certain Chase business credit cards, there are even more categories which provide 5% bonuses, beyond those typically mentioned in #7 above.

12. Watch redemption values, especially with airlines

  • When redeeming points, it pays to carefully monitor the values, especially for airline travel. I could not believe the fluctuations in points needed when planning a trip, as the points would change by 10-20,000 points from one day to the next, both up and down. It can be risky, but it can make sense to watch the movements over a week or so before you redeem airline points, especially if your travel is months away and the plane is not full. I saved over 10,000 points on a redemption on Delta by monitoring this closely.

Additional reminder: Get TSA PreCheck or Global Entry. See item 1 in my first post. With the recent warnings about really long airport security lines, everyone should get TSA PreCheck. If you are flying, as the ads used to say, don’t leave home without it!

I truly hope these ideas get you thinking about how you spend and travel, as well as how you can maximize the benefits which are available, if you know and use the right strategies. Just as investing can be complicated, we try to simplify that for you.

If you have other tips and thoughts or opinions about this blog post, I would love to hear them. Please let me know what you think, at bwasserman@wassermanwealth.com.

Disclosure: I use some of the above credit cards and am a member of some of the hotel loyalty programs mentioned. I have not been compensated for any of these comments. They are based on my own experiences, opinions and research, with special mention to www.thepointsguy.com, which I highly recommend. There are many credit cards, hotel chains and airline reward programs, all with varying benefits.  The purpose of this post is to make you aware of the potential uses, not to recommend any specific product or company.

 

The short run and the long run

In the short run, you may think it’s all about performance.

In the long run, it’s about quality of life, security for your family and not running out of money.

In the short run, many decisions seem important.

In the long run, there are really only a few, very crucial decisions and relationships you must get right.

In the short run, picking stocks or mutual funds may seem easy.

In the long run, having a disciplined investment philosophy and a financial advisor that helps you stay disciplined are key.

In the short run, high dividend paying stocks and high interest bonds seem good.

In the long run, they are only good if the stock price does not plummet and you get your bond repaid at maturity.

In the short run, predictions about the future are difficult.

In the long run, short term predictions don’t matter.

In the short run, understanding the tax efficiency and costs of your investments may not seem important.

In the long run, due to compounding, having an investment advisor that focuses on the tax efficiency and costs of your investments can have a major impact.

In the short run, you may focus on the volatility of the stock market and your emotions.

In the long run, the stock market rewards patience, diversification and not letting your emotions win.

In the short run, it is easier not to talk to your family about investments, money, financial and estate planning.

In the long run, talking with your kids (and grandchildren) about finances, your financial life experiences and your financial advisor is best for all of you.

 

Thanks to Seth Godin, whose blog post here inspired this post. He finished his this way:

“In the long run, building things of value makes sense.

Add up the short runs, though, and you’re left with the long run. It’s going to be the long run a lot longer than the short run will last.

Act accordingly.”

12 Travel and Credit Card Tips for Greater Value and Enjoyment (Part 1)

We advise you on your finances and investments.

But we all spend money. I want to provide tips which can save you money and time, create greater value and help you and your family to have better experiences as you shop, fly, travel and eat out.

Today in Part 1, are 6 tips that you should consider and implement, if they make sense with your lifestyle.

Within the next few weeks, I will post Part 2, with more tips.

1. Get TSA PreCheck, or Global Entry, to save you time and energy every time you fly. These are both valid for 5 years.

  • Global Entry, geared toward international travel, requires an interview and provides for expedited processing through customs at airports and land borders when you arrive back in the US. If you apply for this, TSA PreCheck is included in the $100 cost.
  • TSA PreCheck is only for domestic air travel and costs $85. For more information, go to www.tsa.gov/tsa-precheck .
  • The cost for either is reimbursable if you have one of the following premium credit cards: Citi Prestige, Platinum Card from American Express or Ritz-Carlton Rewards Card, through Chase.
  • Even if you don’t have these credit cards, the average cost of $20-$25 per year is very well worth it. I recommend that your entire family get at least TSA PreCheck. I did this, the process is quick and easy…and you will appreciate it every time you fly.

2. Don’t spend time waiting in car rental lines by signing up for car rental rewards programs, which are free. You can register online. By doing this, you can bypass the long lines at the rental car counters and go right to your car each time you rent. You can do this quickly online, prior to the next time you rent a car.

3. Learn more about maximizing credit card and loyalty strategies. Over the past few years, and especially in recent months, I have read and learned more about the many perks and variety of benefits which are available. A great place to start is www.thepointsguy.com. If you spend the time, you will be amazed at the benefits you can accumulate.

  • If you are loyal to a certain hotel chain, then get their branded credit card. Just getting the credit card will usually get you some free nights. If you use that card for spending or travel, you may move up to elite status, which will get you many perks. I have been loyal to various Marriott brand hotels and now regularly get upgrades, my paid stays and purchases with their credit card rapidly multiply (which can be used for future free nights), special offers, and you get better service from their staff.
  • The Points Guy website recommends SPG (Starwood), which is expected to merge with Marriott, as having the greatest value for their reward program.

4. Consider spending money to get a premium credit card. I once thought it did not make much sense to pay for a premium credit card. However, this can be a wise investment if you will use the benefits.

  • The Citi Prestige Card, which costs $450 per year, provides a 4th night free on any hotel stay of 4 nights or longer (must book through their service), comes with a $250 airline credit which can be used to pay for airfare, baggage fees, in-flight wifi and other items, charges on this card earn 3X for airfare and hotels, can get three free rounds of golf and Admiral Club lounge membership (related to American Airlines). The huge benefit is the 4th night free, if you are planning an extended stay and the hotel is expensive. I may get this card and use it on the second part of a trip next fall.
  • Other cards in this category are Amex Platinum and the Ritz-Carlton Rewards card.
    • The Ritz card offers many perks, such as $300 of travel incidentals (which includes TSA reimbursement), 3 hotel club lounge upgrades per year (hugely valuable if you enjoy the free breakfasts, food and drinks throughout the day), Gold level status, $100 credit on stays of 2 or more nights and much more. The annual fee can easily pay for itself many times over, depending on which perks you use.
    • The Amex Platinum also provides significant hotel savings on bookings through Amex FHR (which may include room upgrades, daily free breakfast, free 3rd or 4th nights), airline incidental reimbursement, Delta club lounge access for card holders and authorized users, Gold status with SPG (Starwood Hotels) and Hilton Hotels, free Boingo wifi and ShopRunner two day delivery service.

5. Monitor your FICO score and use your credit cards wisely. Many credit cards now provide your FICO score monthly or online. This is important, as the better your FICO score, the more accessible various credit cards are. Discover It Card, US Bank, and certain American Express, Citi and Capital One credit cards now provide FICO scores.

  • Do not apply for too many cards at once. Do not cancel older cards, as that will negatively impact your credit score. Make sure you can afford to pay what you charge and pay it off every month. Don’t pay interest on a credit card. If this is an issue, we need to talk about it.

6. Use the points you have already earned! Many people have hundred of thousands of points in many different programs. Do you have tons of Delta or other airline miles? Do you have American Express reward points? Citi Thank you points or Chase Ultimate Reward points? Hotel reward points at many different chains?

  • When are you going to use them? When you plan your next trip, consider redeeming these points. Don’t just continue to accumulate them for tomorrow….enjoy them now, unless you are saving them for a specific trip or purpose.

I truly hope these ideas get you thinking about how you spend and travel, as well as how you can maximize the benefits which are available, if you know and use the right strategies. Just as investing can be complicated, we try to simplify that for you.

If you have other tips and thoughts or opinions about this blog post, I would love to hear them. Please let me know what you think, at bwasserman@wassermanwealth.com.

 

Disclosure: I use some of the above credit cards, airline programs, and hotel loyalty programs mentioned above. I have not been compensated for any of these comments. They are based on my own experiences, opinions and research, with special credit to www.thepointsguy.com, which I highly recommend. There are many credit cards, hotel chains and airline reward programs, all with varying benefits. The purpose of this post is to make you aware of the potential uses and benefits, not to recommend any specific product or company.

 

Politics and Investing: Our Thoughts

The 2016 race for the Presidency has much in common with investing in stocks: both are difficult to predict.

This week provided another great example.election 2016

No political forecaster that I know of accurately predicted before Tuesday morning that both Ted Cruz and John Kasich would drop out of the Republican Presidential race by Wednesday.

It can be very difficult, or impossible, to accurately predict the future.

As the Presidential candidates are now clearer (I didn’t say better!), some will begin to ask what impact the candidates will have on the stock market. Some may ask if Hillary or Trump wins, what would be the impact to their portfolio? What actions should they take, based on either Presidential candidate winning?

As we have stated many times in conversations with clients and in this blog, you should not develop your investment portfolio based on predictions of the future. Regardless of your political views about either candidate, you should not base your investment policy on political changes.

We adhere to a philosophy of rational optimism. We recognize that there are many challenges facing society, our country and other parts of the world. We believe that in the long run, many of these challenges will be dealt with and progress will continue to be made. There are companies, sectors and regions which are doing well, and others which are struggling. Over the long-term, progress will prevail.

But in terms of future stock market performance, specific future outcomes are impossible to consistently identify over a long period of time. The stock market frequently surprises. When many people anticipate that a specific President will be bad for the economy, the stock market may act in the opposite manner. Viewed retrospectively, this has frequently occurred.

This political season has been quite unpredictable and the only certainty is the unknown. We strongly recommend that you continue to focus on things which both matter to you and which you can control.

As we continue to be rationally optimistic, we believe the long term trend for stocks is upward. However, in the short run, we also know that periods of downturns will occur within most years (as occurred last summer and in the first 6 weeks of this year). We know that significant losses tend to occur at least once every 5 years, on average. The key is that if you do not panic, and adhere to your financial plan, these losses are only temporary on the long-term path to higher stock levels.

 

On a personal note, I’m proud to celebrate tonight my son Scott’s graduation from Michigan State University with a degree in media communication. He plans to start his own video marketing business this summer.

As a reminder of thinking long-term, when Scott was born in October, 1994, the S&P 500 closed at 472 at month end. Today, 21+ years later, the S&P 500 is at approximately 2,050. That is the benefit of a wide-angle lens perspective.