Benjamin: Ask the Readers – Are You Employed at Credit Card Inc?

I always thought that going out for a meal was a much better social gathering than other types of get-togethers because of the social interaction involved (required). A few days ago, my luncheon with a friend confirmed this idea further.

He told me that he uses many credit cards in order to “snipe” the best rewards from each one. Naturally, the conversation sparked an interesting debate since I’m the type that thinks having even two credit cards can be confusing.

So let me ask you, do you study credit card rewards so much that you might as well work for those companies that issue them?

Before you answer, let me tell you what my friend does in more detail.

Every time he gets a chance, he applies for those 0% balance transfers credit card offers (some I recommend are at that link). He doesn’t use it to pay off debt or anything that I suggest. Instead, he uses the cards to buy big purchase items to act as an interest free loan. Pretty clever idea but a little over the top I must say as he has 4 cards just based on these offers.
Then he has his rewards. He’s got the American Express True Earnings Costco Card that gives him 3% cash back on gas, which he uses for in addition to his Costco expenses.
He’s also got a Charles Schwab 2% unlimited cash back Visa card that he currently uses for pretty much everything else.
My friend also has a Citi Forward card just for Amazon purchases, because he gets 5% back from it.
Let’s not go into more details, but he actually has 6 other credit cards (or so he claims) he’s received over the years for a total of 11 cards.

My Take on Building the Credit Card Empire

I don’t know why he’s able to get approved for so many cards, as his potential credit risk must be extremely high. Aside from that, I also don’t think having that many cards is really beneficial because carry so many credit cards must be cumbersome (let alone remembering all the payment due dates).

Another detail he’s forgetting is the affect this has on his credit score. While his utilization score must be top notched, I can’t help but think that his average account age is very short, given that he always applies for new ones.

Another, and perhaps the killer for this approach – the time it takes him to study all these rewards and how he can benefit. He doesn’t seem to keep track, but I bet that it’s like a part time job just to keep all the cards paid, all the reward programs organized and stay up to date with the latest in the reward structures. It works for him, but definitely too much work for me.

On the plus side, my friend does seem to get more in terms of rewards this way compared to my basic one credit card approach. Instead of the 1% of every purchase that I get, he gets 2% more for gas and 4% more for Amazon. On top of that, he gets 1% more with his Charles Schwab card. Hmm, maybe I should look into getting a few more cards to get more free money?

So, is credit card mania worth it? Do you do something similar (or will you try it)? Let me (and my friend) know!

—
Related Articles at Personal Finance Blog by Money Ning: