- Centurion Member
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- Joined: Thu May 08, 2014 7:42 pm
- Location: United States
It's not often given explicitly as advice, but I see a habit among some credit geeks that has come to strike me as relatively fruitless. It's come up in discussion before.
Some people are what I'll call "cash back empire builders". The general behaviors are:
1. No or very few cards have annual fees. The person is not a churner or bonus hunter by any means. Not particularly a utilization micromanager, but maybe a moderate CL fanatic.
2. Store cards that might offer a reasonable value to a regular customer, but in an excessive number.
3. Lots of cards with specialized category rewards. Lots of 3%-5% categories for things people don't spend much money on - or very low reward caps for useful stuff. Forget earning a lot on a major spend category by paying an AF.
4. The willingness to monitor 20+ cards across 10+ issuers, and put up with customer service headaches.
5. Despite not being a Costco customer (and already having a Freedom and BCE), getting a QS Visa or Fidelity Amex in addition to a Double Cash, just in case a merchant doesn't take MasterCard.
Another "tell" might be getting a Chase AARP card for 3% cash on dining, when the person already has a no-AF Arrival which gives (or at least gave pre-nerf) a little over 2.2% on dining. The less-than 0.8% cash back difference was enough to get a special card, but this same person wouldn't actually want a CSP due to the AF.
There are some clear problems with this. A great card might be unattainable if the issuer says the person already has enough credit, or old cards can face CLDs or closure. The marginal returns from adding a 21st card are very low. It's a headache if a transaction is processed incorrectly or if there's fraud or an autopay error.
But furthermore, card terms change. Reward rates, terms, and point power changes. Benefits and perks come and go.
A collection of cards is not some fortress, where a wall or tower can be improved just a little and maintain its strength forever. If someone has 20 cards, each with some tiny conceivable reward-maximizing use, card terms will change and after a year, some cards will be useless.
I'm not saying people should change their cards all the time. I just mean that trying to juggle a high number of cards to absolutely maximize rewards from regular spend in the long run is extremely difficult. It's far more sensible to either be "close enough" with a few good cards, or to get into AF cards with big bonuses and close cards as practical.
Very useful: SchwabPlat, CSP, IHG, Costco (was AA Plat), Freedom, SPG
Somewhat useful: Discover, ED (was EDP), BCE, Hyatt, Arrival
May close or PC: Prestige, BrooksBros
Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech