rewards

Credit Card Rewards

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A while back, I wrote about how, if you really wanted to put the effort in, you could be maximizing credit card rewards. If you don’t want to put the effort in that I’ll get to in a second, then you could at least have one reward-earning card that you use for all your purchases and pay off each month.

Important reminders:

We don’t use cash. Everything goes on a credit card unless it’s prohibited or there’s a service charge that outweighs our rewards.

We pay off the balance of every credit card every month. We have never paid interest on a credit card balance.

Let’s dive in.

REWARDS

Credit card companies are offering rewards for using their card for purchases. Some even give a reward for making payments on it too. The rewards can be in a point system, cash back, or incentives for specific companies (e.g., Delta, Disney). We prefer more generic reward options, but some people like to use a specific reward card. The best reward credit card for you is one that matches your spending habits.

An example of a specific reward credit card would be a a Disney card. As you earn money, it goes towards their trip to Disney. Psychologically, they feel that their expensive annual trip to Disney is “paid for.” While this may work for some people, our thought process is that if I earn $1,500, then I have the flexibility to put it towards a Disney trip or can buy something else.

The simplest way to collect rewards is to have an all-category-cash-back credit card (e.g., 1% cash back on all purchases). However, to make the most, you could be using multiple credit cards so you can earn extra rewards in different categories. Then you need to know which card to use when, and also keep track of your statement periods so that you pay it off in full each month. A category type credit card can give rewards in multiple categories (e.g., 4% on gas, 3% of restaurants, 1% on all other purchases), can rotate reward categories (e.g., first quarter is 5% on gas, second quarter is 5% on groceries), or can be geared towards one specific category all the time (e.g., 5% on gas). There are typically earning caps in these categories.

CHOOSING A REWARD CREDIT CARD

Each credit card company has a variety of cards that offer different rewards. You can decide what fits your spending pattern the best. If you don’t want to identify the categories that you spend, then the Citi Double Cash is a great “catch all” with no annual fee and no reward earning cap. You earn 1% cash back on each dollar spent, and then an additional 1% on each dollar paid towards your credit card balance. We deposit our earnings into a checking account instead of a statement credit, because we learned that we don’t earn cash back on the statement credit made.

Some credit cards have an annual fee. We typically shy away from anything that has an annual fee because we don’t like paying money to spend money, but we did have a couple of exceptions. For instance, one card had a $450 annual fee. You earn 3% points (one point is the equivalent of a penny if cashed out) on all travel and dining purchases and 1% points on everything else, but if you redeem the points earned through their travel portal, you get a 50% bonus. One of the rewards was reimbursement of $300 worth of travel costs. The card reimbursed the cost of TSA Precheck too, which as $75, and had a DoorDash credit of $30. Then the last $45 of the fee was offset by the rewards granted through point usage. But the annual fee increased to $550, and we no longer thought it was worth keeping and that the cost would be fully offset by the rewards.

We also look for a sign on bonus. If we’re going to have our credit checked, we want to capitalize on it. Sign on bonuses are typically additional cash back or points once you hit a certain spending threshold. For example, the card may say “once you spend $3,000 in the first 3 months, you’ll earn a statement credit of $300.”

In addition to a sign on bonus, we would also prefer opening a card that offers a 0% introductory rate. I’ve shared before that we most often look for a new credit card because we have a large expense coming. When faced with paying for in-vitro-fertilization out of pocket, we opened a new credit card that had 15 months worth of 0% interest. This way, when we paid the tens-of-thousands owed, we gave ourselves an interest free loan. That particular credit card was only used for that expense because the reward categories were worse than other cards we had. However, we didn’t close that card because it helps our credit by having more of credit line open.

OUR REWARD USE

Besides the Citi Double Cash, we’re partial to the Chase options out there. We use different cards for different categories, and then use the Citi for anything that doesn’t fit into a category.

Between 5 credit cards, we brought in $4,232 worth of rewards last year. That’s money in our pockets that we did nothing except spend other money to get. In the past, it’s usually about $1,500 per year that we bring in with credit card rewards. The amount in 2021 was higher due to sign-on bonuses that were earned in a previous year, and then the credit card changed their reward redemption options, allowing us to pay ourselves back for restaurant purchases. We had previously been using the rewards to purchase travel needs through their portal, but we were able to dwindle down our rewards with this reimbursement change.

What could you do with a “free” and “extra” $1,500?

If you’re smart with credit cards, they can be a powerful tool to create financial flexibilities.

Year in Review: Part II

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I have gone through all our expenses in 2021 and categorized them, which was very time consuming. I swore I’d do better this year, but it’s March, and I haven’t done anything.

In the past year, we hit a net worth of $3 million. That’s really exciting, but we have more goals. It’s important to note that the net worth is through our investment properties, retirement accounts, and other investment accounts, so it’s not liquid funds. The values on our properties have drastically increased, many of which we’ve recently refinanced and have an appraisal on file showing just how much equity we’ve gained on these. Except for the cash that we have in our savings account right now, as we prepare to purchase another property at the end of the month, we don’t typically carry a cash balance. Our philosophy is that, if there’s an emergency, there are very few things that can’t be put on a credit card, and we can liquidate investment funds within 24 hours. We don’t subscribe to “3 months worth of expenses in savings” type actions. We’ve had plenty of large expenses hit us with rental properties, fertility treatments, and other random health needs, but it hasn’t ever been something to drown us financially. So while it’s exciting to see that new net worth, it doesn’t change our spending philosophy.

DIVIDENDS, INTEREST, & REWARDS

Mr. ODA used to have our dividends get reinvested automatically, but now they are transferred into our checking account. That was over $6,500 that came in, mostly at the end of the year, but there was ~$30 per quarter deposited also. In a different time, interest earnings on accounts used to be something to be excited about. Our checking and savings account combined brought in $6.51 for the year.

Mr. ODA is set up with GetUpside. When I went to their site to get a better description, I learned that you can earn cash back through gas, grocery, and restaurant purchases; I thought it was just gas. It’s an app that allows you to earn cash back through your normal purchasing. However, it also gives you an incentive for referring people, and so when that person buys gas, you get some cash back. By checking the app for a participating gas station (and only using it if the incentive offered is a better price than surrounding gas stations), Mr. ODA deposited $32.45 for the year.

Between 5 credit cards, we brought in $4,232 worth of rewards. These are simply earned by either spending or paying the credit card, no further action. We preach and preach to have credit cards with rewards. Everything we purchase goes onto a credit card; at the end of every cycle, we pay that credit card off. We’ve developed a mindset for spending that means we’re not afraid of what we put on the credit card and whether we’ll be able to pay it off in full at the end of the month, because we’re not spending frivolously. I will caveat that this amount of rewards was possible due to sign-on bonuses that were earned in a previous year, and then the credit card changed their reward redemption options, allowing us to pay ourselves back for restaurant purchases. We had previously been using the rewards to purchase travel needs through their portal, but we were able to dwindle down our rewards with this reimbursement change.

INVESTMENTS

Every month, we each put $500 into our investment accounts as an automatic contribution to max out our Roth IRA contributions. Additionally, each kid gets $50 deposited into their investment accounts each month. We also received the child tax credit each month, so with that, we put $125 into each kids’ account. The thought process was that we received $600 for them, and so after investing in their accounts, we were left with $350 to go towards “raising” them, which was the intent of the money being sent out in advance.

EXPENSES

My categories were super broad. For instance, if we traveled, I included all the expenses (e.g., lodging, flight, activities, parking, dog-sitting) as “entertainment.” But “entertainment” also included watching horse racing, baseball game, zoo, babysitting, etc. “Home” includes any furniture purchased, decorations, cabinet knobs, pictures/frames, etc. Even with the broad categories, I still had too many.

There are 3 categories that we have more control over, so I took a closer look at them: groceries, gas, restaurants. These are the ones that we can control our actions to change if we wanted/needed.

GROCERIES

A shortfall on my tracking is that I don’t know if Walmart purchases were necessarily for groceries or for something else. I removed a $300 purchase from my list because we wouldn’t have spent that much in one transaction in groceries, but I can’t figure out what we did spend it on because it was too long ago.

I investigated the spike in June, and I didn’t come up with anything jarring. There’s a transaction for $165 on a day with another transaction, so that may not have been food. August had several trips to Kroger. Trips to Kroger mean that we’re buying in bulk, so things purchased there are typically several of a particular deal they’re running that week versus an actual grocery shopping trip. There are 19 grocery transactions in August, which is higher than usual. August also included an emergency “find this kid some medicine while we’re on the road” that cost us $8 worth of medicine.

Lesson learned: We can do better meal planning and making fewer trips to the grocery store. We can be more deliberate about what we’re purchasing instead of stocking the pantry without a plan. We have a Sam’s Club membership and sometimes we tag along to Costco to scope out deals, so those lead to more bulk purchases, which will fall by the wayside in 2022. The Kroger deals will continue to be on Mr. ODA’s radar though.

GAS

Interesting that January through April are so much lower because we didn’t necessarily stay home. We drove about an hour away for a trip in January and a trip about 90 minutes away in March, went from our house to Lexington (about a half hour) every weekend, and went to the zoo (about an hour or so away). I guess we stayed home during the week more, which kept our gas costs low. April was when we gave up on a lake house and decided to be deliberate about going on trips, so I expected to see an uptick in gas costs at that time. I described that whole thought process and what we did in this post. Some of the uptick in certain months can also be contributed to us trying to maximize gas prices (e.g., we fill up if we’re going to be near Costco, even if we don’t necessarily need the gas at that time). In October and half of November, I was working in Lexington on the weekends, so that was 3 days a week that I was driving 25 minutes each way. Then in December, we drove from KY to Long Island, which is a whole lot of gas.

Lesson learned: We like to be active, so I don’t foresee a change in our gas-purchasing patterns in this year. As I type this, gas prices are soaring all over the country. Since we like to travel, our trips are usually within driving distance versus flying with two kids, so spending the money in gas is cheaper than 3-4 plane tickets.

RESTAURANTS

This is a funky one to track. While we’re traveling, we’re clearly eating at restaurants more often. That’s seen in the higher spending that happened over the spring and summer months. I don’t remember spending all of February in the house, but our credit card purchases seem to say that’s what we did – no gas and no restaurants. In March, we splurged on a birthday dinner ($77!), which is unusual for us. From April through August, we were traveling (and therefore eating fast food and at sit-down restaurants), Mr. ODA had work trips (so he’s going out to eat with coworkers for multiple nights), and there seems to be one or two transactions each month where we paid for a group dinner that was reciprocated (and not captured). Under the restaurants category is also when we went for drinks somewhere. We went to a winery and had a couple of drinks with friends, and that could probably be considered “entertainment” versus eating outside the home.

HOUSE WORK

We put a lot of money into our house this year, which is surprising since it’s new construction. We finished our basement, which was about $15k instead of the $75k-100k that other people have been quoted for the job. We bought a patio set, a grill, and an entryway table. Mr. ODA built a “shed” under our deck (we can’t have free-standing sheds per the HOA, so we enclosed under the deck .. not “free standing” 🙂 ). Most of our furniture moved with us from the last house without an issue, but there were a few purchases needed. Between our initial move in purchases (a kitchen table and chairs), purchases in 2021, and a few purchases that have already happened in 2022, we should be done with big house purchases.

INCOME

I quit my job in 2019. I manage our 12 rental properties as my “job” now, but I also am open to part time jobs as something to do. In April 2021, I was asked if I could help fill a position at the race track during their Spring meet. It wasn’t a job that I wanted to go back and do in future meets. I mentioned that I’d work the Fall meet if I could do something like pour beer, and Mr. ODA’s dad (who works there) made it happen. I also worked some of the days of their horse sales. I worked 22 days for the year and contributed $5k to our family’s spending for the year.

LOOKING AHEAD

I’ll try to track our expenses in real time this year, so that I can categorize them more accurately. Watching expenses month-to-month means you can also make adjustments if you see you’ve spent more than usual in one category.

Finishing our basement meant that we moved furniture around. A sections that was in our dining room moved to the basement, freeing up the dining room to actually be a dining room; I purchased a table and chairs. The “playroom” toys were moved down to the basement, and that room became the guest room. It’s nice that the guests can have their own space on the first floor and not share a bathroom with the kids. That freed up the previous guest room to be an actual office, so I purchased a desk (our old desk was in poor shape and it didn’t move to KY with us). Other than that, I don’t see any major expenses on our own house for this year.

We expect to travel a lot again this year. We already have six trips planned. They’re all driving trips, so that’ll increase our gas category. I have one trip expected to fly to my sister’s baby shower, but that hasn’t been scheduled yet. We’ll also have day trips that we’ll do around our house, which is usually an hour to an hour and a half worth of driving.

While we don’t “budget” or believe in the “envelope system,” we do watch our spending on a regular basis. We check our accounts every few days to ensure there are no surprises as well (i.e., don’t wait for your statement to come and find out there have been false charges). Keep paying attention to what’s being spent and where your money is going so that you can make informed financial decisions.

Refinance Results

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There’s a company in Virginia that offers $0 closing costs for refinances. That applies to personal residences being refinanced. They still cover most of the closing costs associated with investment properties, but there’s an investment property fee that we need to pay. They also have a fee associated with taking cash out as part of the refinance. Another stipulation is that the new loan has to be at least $100,000 after the refinance. I spoke of the initial details in a post last month, and now I can discuss the details and results of the refinance.

We first talked about taking $50,000 out for each Property2 and Property3. Then we added Property8 into the refinance. The opportunity to use this company to refinance a loan is only available in Virginia. We decided it was best to pay off both Winchester, KY houses instead of just one. The appraisals came back higher than anticipated, so we decided to increase each loan to the max amount of 60% loan to value ratio.

Note the change in value on these houses. We’ve owned 2 and 3 for 5.5 years, and we’ve owned 8 for just over 4 years. The value of these houses have more than doubled in that time, with minimal effort on our part, all the while having a tenant cover the mortgage and maintenance costs.

CASH FLOW

At first, the thought of going from $60-70k to $123k-138k worth of loan payments is an overwhelming sight. I’m a visual person, so I broke it down to a place where I felt comfortable with this move. That comfort is in the cash flow.

With the $190k cashed out, we paid off two loans. Due to a huge issue with our insurance payments, our escrow accounts were substantially negative. Therefore, the payoff required making the escrow accounts whole. Our bank that held these loans used to have such a great online system. Through the course of 3 updates, they killed it. They took away loan history in an easy-to-view format, they took away options to make principal-only payments same day, and they removed the payoff request concept (they had made it difficult in the last update by making it a request that you would have emailed to you, and then in this update, they took it away all together, forcing me to call an automated system that just kept telling me about covid-relief options….. I’m not bitter).

After these two loans were paid off, we were left with just under $50k in cash. This will be used for a downpayment and closing costs on a new rental property, which is a search underway.

To the cash flow part – the removal of those two loan payments was worth $1,184.62. The three properties refinanced had their mortgage payments increase by $1,117.70. The change in my monthly cash flow is now $67 more than I had been netting. I’ll note that the cash flow also involves one of the houses going from a 20 year mortgage to a 15 year mortgage, which increases the monthly payment disproportionately to just an interest rate change.

That’s the black and white, month-to-month change; there are some caveats though. Previously, Property2 hadn’t been escrowed, so I was paying that on my own. Now, with the two houses paid off, I’ll need to pay those previously-escrowed costs on my own. When I factor those details in, my annual cash flow actually decreases, and my out of pocket costs for the year increase by about $700.

While the monthly cash flow increase of $67 isn’t a drastic difference, the fact that we have cash left over and $50k of the new loan balance will be used to create more cash flow with the purchase of a new rental-producing property benefits our portfolio.

MANAGING BILLS IMPLICATION

With the payoff of the two houses in Winchester, KY, I now am responsible for paying the taxes and insurance on the properties (instead of escrow). In October, Kentucky sends the owner as of January 1 of that year the tax bills (meaning, if you own the property on January 1, 2020, then you receive the tax bill on October 15, 2020). It’s frustrating. It’s on the old owner to forward to the new owner if there was a sale during that year. They also send it to the owner even if there’s a mortgage with escrow. So every year, I need to call the mortgage company and make sure they received the bill themselves. Even though I need to stay on top of paying the taxes and insurances now that there’s no escrow, it’ll actually save me time because I won’t have to call these companies to make sure they received the current tax bill. Oh! They also give an incentive for paying early, so I’m always worried that the escrow payment won’t be released to give me that incentive and that they’ll focus on the due date.

Property2 had not been escrowed. There was a screw up in the paperwork that I capitalized on because I don’t like that escrow keeps my money tied up without any incentive to me. Well, Mr. ODA thought I had said I preferred things to be escrowed, but I don’t remember ever definitively saying that. I may have said a comment like “gosh, it’s nice to not have to remember to pay this bill,” but not that I’d prefer to see my monthly payment go up each year because of an escrow reanalysis (I feel like I wrote a post about this……). Property 2 is now escrowed through the refinance.

I removed two tax payments to Virginia and one insurance payment, but then I added back 4 tax payments and 1 insurance payment for each year. The one insurance payment for two properties is what caused me to have an escrow fiasco, so now we’ll avoid that mess by paying it ourselves. Plus, when we pay the insurance ourselves, it can go on a credit card where we earn cash rewards.

SUMMARY

In 4-5 years, we’ve more than doubled the value of these houses that we purchased. While that isn’t immediate cash in our pockets, that’s a substantial increase in our portfolio’s net worth. That increase in value costs us more in taxes in each year, but it also provided us with this opportunity to refinance and take cash out to purchase another property. With two houses paid off, we have also increased our monthly cash flow by about $67. On top of all the near-term gains for this transaction, there’s also the interest payment gains we received. All 3 loans dropped their interest rate, and one loan transitioned to a 15 year loan from a 20 year loan, which decreases the interest owed as well.

A Second Home & Summer of Travel

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Why did we do so much traveling and activities this spring and summer? Most people probably assume all our travel was making up for a year of not traveling during the pandemic, but we came at it from a different perspective.

We’ve had a long term goal of a beach/lake/mountain home. After another failed search to make this dream come true this past Spring, we decided to redirect that money to trips this summer. I’ll run through the background, the financial decision, and how we spent our travel “budget.”

BACKGROUND

We first looked into a vacation rental in Snowshoe, WV – six years ago. Snowshoe is a ski resort, and one of the better available ones to those of us south of the Mason Dixon. It also has a draw during the summer with hiking and mountain biking, albeit not as constant of a stream of people needing a rental. The draw for us was that it was halfway between our home in VA and Mr. ODA’s family in KY.

We went as far as meeting a Realtor and looking at properties. If the house was off Snowshoe proper, it was a good distance from the ski lifts and not in great condition. If the house (condo) was on Snowshoe proper, it came with a lot of rules and regulations and costs. Everything near the ski lifts had to be under Snowshoe’s management, which included their cleaning costs, and their booking process. This meant that someone couldn’t necessarily go onto the website to book our unit. Someone would go on their website and book “a 2 bed and 1 bath unit” and the system would cycle through the bookings. With the high condo costs and the uncertain bookings for those units, as well as the distant location of the units that weren’t subject to the condo process and cost (plus finding a management and cleaning company for that), we stopped the search.

Since then, it’s been on the wish list, but we weren’t sure what direction we wanted to go. 

When we moved to KY, we decided to look into a lake house. We want it to be close enough that we could just pick up and go (e.g., trying to keep it under 2 hours), we want it to be on a lake that allows motor sports (so this rules out anything that’s “no wake” or prohibits motors of any kind), and we want it to be lake front (we learned this during our recent search, and hadn’t fully realized how much we wanted this until we saw a house that wasn’t on the lake directly). 

We looked at parcels of land and kept an eye on a few houses listed in the March/April timeframe of this year. Our initial thought was that we would purchase land and hold it until we were ready to have a house built. The parcels of land we looked at didn’t meet the criteria we wanted (good size, on the water, ability to build a dock). I started to feel like we were pressuring ourselves to make a decision for something that we didn’t actually need. 

We took a break and just kept an eye on Zillow. We went to see a new construction house on Herrington Lake, but it wasn’t actually on the lake. It was next to the community pool, across the street from the community’s dock, had 3 bedrooms and 2 bathrooms with a loft, and it was brand new. It even had a two car garage, which wasn’t something on our wish list. However, the price tag was high; it had been listed for many months, and we didn’t feel the comps supported such a cost for it not being literally on the lake. We spent a lot of time mulling it over, but decided to not even put an offer in. Lucky for the seller, they did get a full price offer shortly after that. 

I decided that we should wait at that point. I figured we may have better luck waiting until the end of the summer (perhaps people will think they’ll spend their last summer on the lake and then unload it?), and that we shouldn’t force this decision to not get exactly what we want for something that isn’t a necessity. 

THE FINANCIAL DECISION

If we purchased a $250,000 second home, and I assume an interest rate at 4.5% (even with excellent credit, the rates you see advertised are for primary residences), we’re looking at a mortgage payment of $1,200. On top of that, we’ll have escrow costs, HOA costs, the possibility of management fees, and then even PMI costs. That was another big factor; we’ve been throwing any ‘extra’ money towards paying off two rental property mortgages, so we don’t have $50,000 liquid to cover a 20% down payment. Without having the 20% down payment, it wasn’t even guaranteed that we’d be able to get a loan for a vacation house.

Knowing $250,000 was even more than we expected to spend, I conservatively assumed $1,200 in monthly house costs. Instead of spending $1,200 each month to go to the same destination over and over again, why don’t we just mentally allocate $1,200 each month to travel and go to all different places? And so, months of a crazy amount of travel began.

HOW DID WE SPEND OUR ENTERTAINMENT ALLOCATION?

MAY: $618

We started with a last minute trip to Atlanta to see the Braves. We spent 4 nights in Atlanta, went to two baseball games, met up with family for lunch, visited Stone Mountain, and explored the city parks. We stayed in a 2-bedroom hotel room because it was cheaper than any AirBnB options, and I was highly focused on giving the kids separate sleeping spaces. The hotel experience was less than favorable (dirty, AC broken, limited breakfast, roaches … and a good name hotel!), and after some conversations with the hotel, we ended up not paying for it. They had credited us one night without us asking after the AC continued to not work after their “fix.” Mr. ODA then had a casual conversation with the manager about the stay as he was checking out, and the manager credited a second night. I thought we paid for the rest of the nights, but it never showed up on the credit card. Our total trip cost was $460.

Later in May, we went camping in the Daniel Boone National Forest with some family. We booked a “cabin” (I used that term loosely; it was walls, a roof, and platforms for sleeping bags, but it had electricity and AC!) for two nights. We went swimming, rode bikes, and hung out under a canopy while it poured on us for most of the main day we were there. Our dog got to come on this trip, so we didn’t have any pet fees. We brought groceries to cover our meals since there’s nothing close by. Since we’d be buying groceries anyway and gas is negligible since it’s an hour away, I’ll just focus on lodging, which cost us $158.

JUNE: $200

Almost a year ago, we planned a trip with the extended family to Hocking Hills. This shouldn’t really count against our “monthly allowance” mentality since it was going to happen regardless, but I’m including it anyway since we didn’t do any other June trip. Mr. ODA’s parents covered the cost of lodging, and the rest of us covered the cost of food and our canoe rentals. We went hiking, got rained on, and played games at our rental. On the last full day, we rented canoes and went down the Hocking River, which was a great experience. We went with 6 kids, 3 of which were under 3 years old. So if you’re a beginner or looking for something to do with little ones, this was a fun time for $52 per canoe! This trip cost us about $200.

JULY: $690

Before we left Virginia, we discussed doing walk throughs of our properties and being more present with them. There were some properties that we hadn’t seen since we bought it because they don’t have maintenance requests or we call someone else for the work. Well, it was a whirlwind to move, and we didn’t do that last summer. After the debacle with the flooring replacement at one of the houses, we knew we needed to get back there to tie up loose ends. We have a wedding to attend in the area in September, but decided this couldn’t wait until then. The first weekend we could go ended up being the 4th of July. Being in Richmond, VA, there isn’t a large AirBnB market for a normal sized family. All of the options that were available were meant for multiple families in a large house, and we just aren’t interested in paying $700 per night for ourselves. We went with a hotel halfway between Richmond and our old neighborhood, and because we stayed for 5 nights, it was considered “long term,” and it only cost us $525, which included $75 for the dog being with us. Since our entertainment was either working on rental houses or visiting with our old friends, we just had food and gas costs. The total trip cost was $690 (and most of that was tax deductible!).

AUGUST $1069

We learned that St. Louis is only about 4.5 hours away from us, so we looked to see the Braves’ schedule. They were scheduled for mid-week games for the first week of August, so we marked it down. Unfortunately, things were busy, and I didn’t make the plans in advance. I struggled to find pet care for our dog, and I ended up booking an AirBnB the morning before we left. We searched and searched, and this one randomly popped up that morning, and it worked out well. Lodging cost us $585. Our entertainment (tickets and parking) cost us $135. Food and gas cost us $213. Total trip cost was $933.

My plan to visit my family in NY in July didn’t come to fruition because we had to manage 4 days worth of our builder being here to fix things in the house, and then I had a doctors appointment pop up that had to be a specific time. Instead of driving there and back (12+ hours each way), we booked some flights. We’re able to go from Cincinnati to JFK directly (such a blessing with 2 kids under 3!). The flight was 2 hours, plus an hour on each side for driving (although, it took us an hour and a half to get to my parents’ house when we landed at JFK because a 3:20 arrival, plus what felt like a 2 mile walk from the gate to passenger pickup, put us at getting on the Belt Parkway at 4 pm – that’s not good for that area!), and getting to the airport an hour early. We left out of LGA, but it was still a direct flight, and we arrived 25 minutes early! We had hardly any wait at TSA for either leg, no issues with boarding or the flight, and we got our gate checked bags easily. I’ll take 5-6 hours of travel over 12+ hours. The flights were booked through our Chase Travel Portal, costing us the equivalent of $833 in points. The parking is $9 per day, the gas to get there is negligible, and we actually didn’t spend anything on food (I very much owe my parents for that!). Our entertainment goal was to go swimming in my parents’ pool the whole time, and that’s just what we did! The trip cost us $36 in parking and $100 for our dog’s boarding.

On top of these long trips, we also did a lot more activities that were just for one day. We went to 2 Reds games, the Cincinnati Zoo several times, a UK baseball game, Bernheim Forest, and random family/friend activities. It turns out we didn’t spend the $1200 per month we had mentally allocated, but we kept ourselves really busy and had a great time making memories! 

Now it’s time to enter a new phase of life: preschool and sports! I’m pretty excited!

June Financial Update

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We’re continuing our spring/summer of travel and activity, which is why there are fewer posts and lots more spending.

The stock market has increased, which has been the main factor in our net worth change. We paid $2,000 towards the mortgage we’re paying down, leaving a balance of $3,300. This mortgage will be paid off once all our rent is collected for July; it was pushed back a little bit because of the flooring replacement that occurred in one of our rentals, which is why our credit card balance is much lower than last month. We’re also still waiting for half of one property’s rent, which is the norm these days.

  • Utilities: $250. This includes internet, cell phones, water, sewer, trash, electric, and investment property sewer charges that are billed to the owner and not the tenant.
  • Groceries: $518
  • Gas: $268
  • Restaurants: $165. Our credit card reimburses for many of these expenses; we received credits totaling $120.13 in the last month.
  • Entertainment/Medical: $1,093
  • Investment: $1,100
  • Insurance Costs (personal and rentals): $845

VIGILANCE ON CREDIT CARD REWARDS

Mr. ODA discovered that our PNC credit card rewards balance was decreasing, despite earning new rewards this cycle. He investigated further and noticed that we had been losing rewards for a few months now. PNC has a policy that they don’t issue their rewards until you hit $100 worth of rewards. Once we hit $100, PNC sends us a check in the mail. Since they send a check, we still receive paper statements, even though we regularly check our financial accounts online. Over the past few months, both of us checked the balance to see “ok, we’re nearing $100,” but didn’t put any more effort into knowing the details of the balance. Mr. ODA happened to notice that the statement didn’t make sense.

$89+3 somehow equals $82. There isn’t a single section on our statement or via our online account that identifies the loss of rewards Mr. ODA called PNC to ask for more details and learned that our rewards expire after 2 years, despite their policy of not issuing a check until you hit $100. They basically said, it doesn’t matter that your account is over 10 years old, or that credit has been used less in the last year due to the pandemic, or that they don’t clearly identify the expiration of rewards and just identify a lower balance. As a comparison, and I keep going back to Chase, but Chase changed up their reward categories to allow the consumer to earn more rewards during the pandemic (e.g., in addition to giving rewards in the travel category, since consumers weren’t traveling, they added grocery and home improvement stores as major reward categories).

The PNC customer service representative reinstated 60 days worth of lost rewards and issued a statement credit. We don’t want a statement credit because we no longer want to use this credit card, earning rewards that we’ll never be able to capture. If we use this credit card to use up the statement credit, that’s rewards that could be earned on a different credit card. Now Mr. ODA is fighting for the credit to be applied to our checking account or to have a check sent to us (which is the preference on our profile) and fighting for the reinstatement of the rest of the rewards lost.

Without PNC, we’re down to 4 credit cards in our regular rotation. We have 3 cards that we use for categories (gas, grocery, restaurants, travel, home improvement stores), and then we have the Citi Double Cash card that is for “everyday purchases.”

Chase Rewards Portal

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GENERAL THOUGHTS

We have several Chase credit cards, both that are active and ones that we used in the past. As we shared in the past, we open new credit cards when we have one or several large purchases to make, so we’re typically looking for a 0% introductory rate for at least 12 months, a sign-on bonus, and no annual fee. We also do a little bit of travel hacking, so even if the card doesn’t hit these typical ‘requirements’ of ours, we’ll open a card if it comes with a sizable sign-on bonus.

Chase offers several cards that have specific rewards categories (e.g., airlines, Disney). However, our general thought process is that if you earn “cash,” you have more flexibilities than being tied to one specific category. Weigh your lifestyle; if you’re the family that does Disney every year no matter what, then maybe a Disney bonus is worth it for your finances.

CHASE CREDIT CARDS

I highlight several of the Chase cards and their main bonuses in a previous post. We currently are using:
– Chase Sapphire Reserve: Has an annual fee, comes with a statement bonus after spending a certain amount after opening, $300 in statement credits as an annual reimbursement for travel, earn 3X points on grocery store purchases per month, dining, and travel booked after the statement credit is earned, and several other bonuses.
– Chase Freedom (now called the Freedom Flex): No annual fee, rotating 5% cash back reward categories each quarter (e.g., gas, internet, grocery).
– Chase Freedom Unlimited: The offerings on this card are slightly different than when we opened them, so I’ll focus on what’s currently available. Sign-on bonus of $200 cash back when you spend $500 in the first 3 months from account opening, no annual fee, 5% on purchases made through Chase Ultimate Rewards, 3% on dining and drugstore purchases, and 1.5% on all purchases.

We’ve also been able to utilize their business card options. However, since several reward categories overlap with others that we have, these are no longer active. We met the requirement for the sign-on bonus, then slowly paid down the balance on the card (while always making more than the minimum payment) over the 0% introductory period, ensuring we had a $0 balance before the interest rate’s introductory period expired. We typically leave a credit card open, but don’t use it, when we’re no longer benefiting from the card’s rewards (e.g., when the reward overlaps with another credit card we use frequently), but we did close the Ink Business Preferred because of the annual fee.
– Chase Ink Business Unlimited: Earn 1.5% cash back for business purchases, offers a sign-on bonus and introductory 0% interest, and has no annual fee.
– Chase Ink Business Preferred: Earn 1% points for all purchases and 3X points for shipping, advertising, internet and phone, and travel. This card has an annual fee of $95.

THE REWARDS PORTAL

We utilize several Chase cards for differing types of bonuses. Chase allows you to transfer points earned from different Chase cards into one account. This is a big bonus for us because we have the Chase Sapphire Reserve card, which offers 50% more value on the points earned when they’re redeemed for travel through Chase Ultimate Rewards than if you took them out based on their straight cash value (e.g., 50,000 points are worth $750 toward travel). That means we’re earning more cash back on those categories and then more when we use those points for travel costs.

Here’s an example: Currently we get 5% cash back on internet with the Chase Freedom card. We pay our internet bill of $45 each month for this quarter. We earn $2.25 cash back or 225 points that gets transferred to the Sapphire Reserve travel portal, where it’s now worth $3.375 for booking travel costs.

We have used the portal several times to book our hotels, car rentals, and flights. Most recently, we searched for a hotel stay. We were able to search for the lodge, review the different types of rooms, and book using our points. Here’s the breakdown of our purchase within the portal.

Chase is also offering 50% more value (100 points equals $1.50 in redemption value) when you redeem points for grocery store, dining, and home improvement store purchases, as well as donations to select charitable organizations. We utilized our points to give ourselves statement credits for several restaurant purchases from the past 90 days that were made on our Sapphire Reserve card.

SUMMARY

We’ve strategically opened new Chase cards over the last 10 years. I wouldn’t recommend opening 3 new cards at once, but, like us, open them as you have a need to cover large purchases. A large purchase looming allows you to meet a fairly high spending threshold to earn the sign-on bonus (e.g., spend $4,000 in the first 3 months to earn a bonus), and opening a new card should give you a 0% introductory interest rate so you can give yourself a free loan for a year or sometimes longer.

Chase offers an array of cards, which have different reward offerings. A positive to Chase’s portfolio is that you can merge your rewards earned on different cards into one portal. This has been especially beneficial because we have the Sapphire Reserve, where your “points are worth 50% more when you redeem for airfare, hotels, car rentals and cruise lines through Chase Ultimate Rewards®.”

DISCLAIMER: Chase has no affiliation with this post; we just love what they have to offer. Be sure to read all fine print on the cards discussed here, and don’t assume we’ve covered all the details that are required to earn the bonuses. All Chase card names and their rewards portal name are registered trademarks of JPMorgan Chase & Co.