Tips for credit-card minimalists who still want to maximize rewards

With tiny houses and capsule wardrobes becoming popular, simplicity and minimalism are in right now. But can you apply those same principles to your credit life?

We talked to a couple card bloggers about whether it’s possible to downsize your credit card collection and still play the rewards game.Card minimalists

“I think you could go with as little as one card, and two or three is definitely doable,” says Scott Mackenzie, founder of the website Travel Codex.

If you are going the minimalist route, however, you need to make sure those few cards pack a punch.

Why be a card minimalist?

Having lots of cards doesn’t necessarily hurt your credit, and there are plenty of rewards advantages in having a sprawling card portfolio. But, for some, paring down is “a sanity thing,” Mackenzie says.

“There’s a psychological argument to be made that an excess of choice frustrates people,” he says. “When you have too many choices, you feel like there are lots of options, and you don’t know if you’re making the right choice.”

With just a couple carefully chosen cards in your arsenal, you don’t have to fret over which one to use for each purchase — or worry about switching out cards in your wallet before you leave home to take advantage of a particular bonus category or discount.

“You may be in line at the register, and you remember you didn’t bring that card with you,” Mackenzie says. “It’s at home in the binder of 20 or 30 cards.”

Another advantage? Staying on top of payments isn’t as much of an issue, says Grant Thomas, founder of travel rewards blog Travel with Grant.

“If you only have two or three credit cards, it’s usually a lot easier to track your spending,” Thomas says. “You don’t need as many [online banking] logins. When keeping track of payment due dates and statement dates, the fewer things you have to remember, probably the better.”

What to look for in your core cards

The key to the card-minimalist life is finding a few cards that pack the most value (which will vary by cardholder). Thomas, for example, has more than 30 cards, but carries only two core cards: The Citi Forward (extinct) and the old version of the American Express Blue Cash (also extinct), as they have bonus categories that align with his spending.

“I don’t carry a wallet per se,” Thomas says. “I have an iPhone case with a spot for credit cards and driver’s license. So I can only carry two cards and my license.”

Mackenzie and his wife, meanwhile, also have two core cards – the Chase Sapphire Preferred and the Premier Rewards Gold card from American Express (a CreditCardForum advertising partner).

What exactly your own austere wallet should contain depends on your rewards strategy. Consider these factors when choosing your core cards:

  • Flexibility: If you’re earning rewards on only a couple cards, you need to be able to do as much as possible with those rewards.

    “The most important thing when looking at a rewards card, especially when you only want a few cards in your wallet is that the rewards are very flexible,” Mackenzie says.

    Cards tied to flexible rewards programs, such as Citi’s ThankYou program, American Express’s Membership Rewards program and Chase’s Ultimate Rewards program, let you earn points that can be redeemed for cash back, online shopping, gift cards, merchandise and travel. All three also allow you to transfer points directly into partner hotel and airline loyalty programs, which can yield a lot of value (generally more than cash redemptions).

    “I generally think the best deal is to transfer to another program, where hopefully you’ve already found rewards space,” Mackenzie says. “But certainly it doesn’t hurt that there’s the option to redeem [reward points] like cash.”

  • Bonus categories that hit as many of your expenses as possible: Many cards offer elevated earnings (upwards of 5 percent) in certain categories, and trying to hit all those categories is one reason a lot of people end up with fat wallets.

    “There’s not one card that gives you 5 percent back on everything,” Thomas says. “That would be awesome.”

    With as little as two cards though, you can hit several spending categories. Mackenzie notes that, between the Chase Sapphire Preferred and Premier Rewards Gold, he’s able to hit travel, dining, groceries and gas.

    Of course, as Thomas says, “It depends on what you spend your money on.” If your expenses don’t fall neatly into categories, Thomas recommends looking for a card that gives an elevated amount of cash back on all purchases. The Citi Double Cash, for example, gives 1 percent back on purchases and another 1 percent back when you pay them off.

    “If you’re not earning 5 percent back, you might as well earn 2 percent,” Thomas says.

    For a complete list of cards that offer the most cash back by category go here.

What minimalists miss out on

Card minimalism means some sacrifices. By not applying for new cards, you’re missing out on the opportunity to pad your balances with lucrative sign-up bonuses, for example.

You’ll also miss out on some attractive perks. Airline- and hotel-specific cards “are among the first that I would eliminate if you’re going to keep it to a limited number of cards,” Mackenzie says, noting that the points earned in those programs aren’t very flexible. However, he points out, free checked bags (offered on many airline cards) have real monetary value to frequent travelers. Some travel cards often also allow you to accelerate your progress toward elite status.

So, before becoming a card minimalist, ask yourself what kind of traveler you are.

“I’d envision that the kinds of people who are looking for simplicity would usually be the type of people who would just book the cheapest flight or the cheapest hotel,” Mackenzie says. “They may not care about elite status and loyalty.”

As for hotel cards, some of those offer an extremely valuable perk – a free stay every year, which, depending on where you use it, can cancel out the annual fee and then some.

“If you stay at nicer hotels like Hyatt or Marriott, you might miss out on free nights,” Thomas says. “But if you typically don’t stay at chain hotels or you prefer independent hotels or Airbnb, you’re really not missing out on much.”

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