I’ve always done things a bit differently than others. Starting out in the credit card, miles, and points games was no exception. One of the biggest mistakes I made in college was not opening a credit card. Heck, I wish I opened one even earlier, but you get the idea. I think back to all of the money I spent on food, books, trips, and maybe a few alcoholic beverages and wonder how many points I’d have today if I started earlier.
Also for one reason or another I never signed up for airline or hotel frequent flyer programs. I wasn’t traveling much back then, but I probably took 3 round trips a year on Southwest which could have easily earned a free flight.
Now as I look back to the beginning of this hobby I wish I had done things differently. Hopefully this will help someone starting out make “better” decisions in the important early phases of their credit journey.
My Early Mistake
Chase Bank used to set up a sidewalk tent every warm Saturday afternoon to convince college students to open some type of Chase account. Many of my friends took the bait, but for year I stuck with my hometown bank, United Missouri Bank. Year after year I saw more friend open the Chase Freedom card and talking about cash back. I didn’t think much of credit cards at the time and my entire life was paid for by debit or cash. What a mistake. Occasionally I’d overhear a friend talking about their growing piles of credit card debt which served as internal evidence that I should not open a credit card. I didn’t want to fall into the credit card trap that so many college students do.
Toward the end of college Chase introduced the epic Chase Sapphire Preferred card. The Chase Sapphire Preferred card was revolutionary for its time. It’s hard to believe today given how incredible credit cards have become, but the Chase Sapphire Preferred was in a league of its own back in 2011. Just read this vintage ThePointsGuy post about the card. When Chase introduced the Sapphire Preferred it was the card everyone wanted. I remember seeing one in the wild for the first time and thinking “I have to get it.” Something about the bright blue metal design drew me in.
Applying For My First Credit Card
As I entered my senior year of college I decided it was finally time to get a credit card. At this point I still only had my United Missouri Bank and Bank of American debit cards in my wallet. Since I knew very little about credit cards at the time, but knew I wanted to Chase Sapphire Preferred. I went to Chase.com, applied for the card and was instantly denied! I called Chase to request approval, but Chase told me I was ineligible for the card due to my limited credit history. Next I applied for the Chase Freedom card, but again Chase denied my application. In a final attempt to open a credit card I applied for the American Express Green Card. A few days later I received a letter from Amex denying my application.
At this point I became extremely discouraged. I starting to research why I couldn’t get a credit card and what I could do to improve my chances. Quickly I learned how to run a free credit report through various online resources. When I ran mine I found my credit score was basically terrible and I owed ComEd $15 which was in collections. My delinquent payment, lack of credit history, and multiple credit inquiries all led to a terrible credit score.
Luckily for anyone who finds themselves in this situation there is still a way to get credit. Most banks offer secured or student credit cards to people with poor credit or no credit. These cards generally come with fairly reasonable APRs and extremely low credit limits. After doing some research I decided to open the BankAmericard For Students. I picked this card simply because I was an existing Bank of America customer.
Starting Out and Adding Cards To My Wallet
I basically started out treating my BankAmericard as a debit card. I’d use the card for a week and immediately pay off the balance. Week after week for six months my credit score began to improve. After six months my credit score improved enough to apply and receive approval for the American Express Gold Card. Once I got my hands on the card and started earning valuable Membership Rewards points I became hooked on credit cards.
After a few months with the American Express Gold card I received an offer to convert my Gold card to the higher annual fee ($175) American Express Premier Rewards Gold Card. This change came around the same time that I started developing a passion for air travel. Believe it or not for several years flying terrified me and I would have minor anxiety attacks while flying. Once I got over my fear of flying I knew I wanted to fly more often. Since the Premier Rewards Gold Card offered 3X points on airfare it seemed like a great card for me.
In 2015 after a few years with the Premier Rewards Gold Card I started a new job. Since the new job required more travel and hotel stays I expanded my credit card portfolio to make traveling more enjoyable. I first signed up for the Marriott Rewards Premier card for the 80,000 point sign-up bonus, 15 elite nights, and free night certificate. Next I opened the Citi AAdvantage Executive card for Admirals Club lounge membership, but have since converted the account to the Citi Prestige and now the Citi ThankYou Premier cards. I’ve also since converted the Amex Premier Rewards Gold card into the American Express Platinum Card. All of which brings me to today and the current state of my wallet.
Various Mistakes Along The Way
As I continued to earn credit card points from sign-up bonuses and conversion bonuses I really wasn’t sure how best to use the points. I knew points transferred to various hotel and airline loyalty programs, but didn’t see much value in transferring points to programs like Singapore Airlines KrisFlyer. As my stash of points grew over time I knew I’d have to use them to realize value from them. Early one I used points in some fairly stupid ways. My first use of Amex Membership Rewards points was for the purchase of Bose SIE2i Sport Headphones. I loved the headphones (left them on a plane months ago), but used 15,280 points to buy them. The headphones retailed for approximately $150 which meant I only received $0.01 of value from my points. Obviously an awful mistake looking back at it.
My love of Bose headphones continued as my downfall and months later I made an even larger mistake. I purchased the Bose QuiteComfort 20i headphones for 39,050 points! Those retailed for $250 meaning I only received $0.006 of value from my Membership Rewards Points. I truly wish I could go back in time and remedy these mistakes.
Now my mistakes are generally less severe. Occasionally I use the wrong credit card at checkout or transfer points to a loyalty program prematurely, but for the most part I’ve become much smarter when using points and miles. Many will argue that my use of Miles and Co-Pay when upgrading my recent business class flight on American was a poor use of points, but I found the redemption valuable.
Final Thoughts
When I started writing this post my original intention was not to share this story, but to explain what I would do today if I were starting out. That post is still to come. As I wrote I realized just how many steps it took for me to get to where I am today. I hope this proves helpful to anyone starting out, especially to those who were recently denied for credit. Also, I really hope this post helps remind readers how terrible redeeming points for merchandise really is. Many people end up getting $0.11 or more of value from Membership Rewards points and I got less than $0.01 on both purchases.
Overall, I’m still very new to this crazy game of points and miles. I’ve learned a ton of information over the past five years, but still have plenty to go. I started this website to simply document my work travels, but slowly it has evolved to discuss loyalty programs and credit cards. I try to only write about topics I am personally familiar. In recent weeks I’ve taken a step back from writing about cards or programs I’ve never carried. I realized unless I’m personally familiar with a product or subject I can’t offer much value beyond what I read from other bloggers. As I continue to grow this site I’d like to expand my knowledge of manufactured spending and churning. For now I’ll stick to trip reports and my experiences with credit cards.
