The Last Thing you Need is Another Credit Card, but…

Although I can’t put the entire house on a credit card, I can pay for a lot of its elements with one… like deconstruction, printing fees, legal fees, and plenty of other items. Because of this, it made sense to use the most lucrative credit card possible. My friend Calvin alerted me a couple of weeks ago to a new card by Schwab that gives you 2% cashback on every single purchase. Not bad at all, and much better than the tons of 1% cards and airline mile cards out there.

Furthermore, Schwab just deposits the 2% into your brokerage or bank account automatically at the end of each month. No more messing with rewards, redemptions, and other roadblocks designed to get between you and your refunds.

2% may not seem like a lot, but it adds up. I’d rather spend that 2% on upgrades than just have it disappear into the ether.

3 Responses to “The Last Thing you Need is Another Credit Card, but…”

  1. Frank Says:

    It depends on what you want to do. For some people, an airline card may make more sense.

    Let’s say you get an Alaska Airlines Visa Signature card. You get 25,000 miles to start. If you spend $115,000 on it, that gets you to 140,000 miles. That’s enough for a first class round-trip ticket from Seattle to Sydney on Qantas (well, the Los Angeles-Sydney portion, anyway). As of right now, three months out, those tickets are going for about $20,000. Compare that to the $2,300 you’d get back from Schwab. And unlike many airlines, Alaska is great about finding award seats for their members. Now, if you’re not interested in traveling, or don’t think you’d travel first or business class, then the Schwab card is a far more rational choice.

  2. Mike D. Says:

    Frank: The Alaska Signature card is the one I’m replacing with this card, essentially. It’s a great card as as far as mileage cards go, but what you get out of it depends heavily on what sorts of flights you might take. I just did a search for Los Angeles to Sydney flights three months out on Orbitz and if you fly coach (which I always do), it’s only $670. So in your example above, you could fly first class and have $0 in your pocket with the Alaska card, or you can fly coach and have $1630 in your pocket with the Schwab card.

    Even for a coach flyer like me, miles are usually more valuable for those very short notice trips where the airline is trying to kill you on last second fares. If you have a lot of those, mileage cards are great.

    Another thing about Alaska too — even though I like them — their miles became less valuable last year when all of the reward levels changed. I can also never seem to find any “good” flights which use the saver reward level. Unless you want flights at odd hours, you’re usually paying more miles.

  3. I am a huge advocate for Credit Cards assuming one can pay off the balance every month and aren’t prone to impulsive buying. I have had a credit card (with rewards) in my name since I was 16 and depend so much on them for my last trip to Japan, I took $40 in cash, that’s it.

    BUT with that said, I also handle PHP programming of credit card processing for our site which has been quite an eye opener on how the other side of credit card processing goes. Since doing that, I really don’t feel right using credit cards on small businesses and those that I doubt build the cost associated with the transactions into their pricing structure. Sure, Wal-marts, grocery stores, airlines, even fast food, no biggie. Any one big enough to negotiate their terms and rates with the processors. But small businesses, I think it just takes too much of a hit on them.

    All that to say, I do like the Charles Schwab card very much and was a good pick. I have been thinking of switching my Visa Signature Chase Freedom (soon to be Visa Signature Chase Sapphire) to the Schwab card.

    Because of this, it made sense to use the most lucrative credit card possible.

    At first I read lucrative to mean exclusive – and I was going to have to say something (*cough* AMEX Centurion) – but then I realized you meant lucrative as in best rebate.