Have you ever seen anyone with multiple credit cards from one or more credit card issuer and thought, “Why? Why do they have so many credit cards?”
You may have even reflected on this and considered, “My one credit card has a high credit limit with decent cashback rewards and that’s enough for me.”
Well, it’s easy to be content with one credit card that has universally good benefits and a decently low annual percentage rate. But there are advantages in having more than a few credit cards as long as you use them in a responsible manner.
One common misconception is that if you have more than a few credit cards, you are irresponsible with your spending. It is true that some people who have multiple credit cards can be very irresponsible with their spending and may eventually find themselves in debt.
However, this is not always the case. In fact, some of these people who carry a decent number of credit cards on their person are actually doing the exact opposite and are being financially responsible by maximizing the rewards they get on different cards.
Credit Cards, when used wisely, can be very rewarding
The rewards can come in different forms. Depending on who you are and how you play the credit card rewards game, you may be using your credit card to get cash back, to earn rewards points with a program, to bank up miles with a frequent flyer program, or even accumulate points for a hotel program.
Whichever category your interest lies, you should also know how to maximize your points within a specific program so that you can reap the financial benefits in the best possible way.
Whether it points/cashback with your favorite bank program or miles with your favorite airline, there are certain strategies that can be employed to ensure that you are maximizing a return on your day-to-day expenditures.
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When these strategies are utilized efficiently and responsibly, credit card users can get a lot of value out of expenses that they would have had to pay regardless of whether they had a credit card or not. This is called someone’s natural spending.
When using a credit card to pay for your natural spending, this means you don’t use the card to pay for things you can’t afford. You simply use it on what you would naturally spend day to day or month to month, whether it be groceries or bills. If you only use one credit card though, some of your spendings may not fall underneath your credit card’s reward category.
For instance, you may have a credit card that gives you 3 points per dollar on travel and 1 point per dollar on all other expenses. Any time you use this card for anything other than travel, you are earning only 1 point per dollar in a spending category that may have another credit card with a higher reward for it. This means that you only fulfill your card’s rewards potential when you use it on travel.
Anytime you use this card on dining out you could be missing out on another credit card that may have a 3 point per dollar reward for this category.
So, what if you had a different card with a different rewards category for almost every spending occasion?
What if you had multiple credit cards, each one that fulfilled a different rewards category so that you could maximize the amount of points/miles you earned for every spending occasion?
One of the most common ways to maximize rewards is to increase your credit card synergy
We first need to understand what synergy means.
Synergy means the combination of two or more elements in order to create an advantageous effort that results in a greater effect that would not happen if the elements acted alone. In this case, the elements are credit cards and their advantageous effort is using each credit card’s different rewards characteristics to maximize your financial return.
In a more basic description, you could say that it is the use of multiple credit cards to “cover all of your bases.” Each base being a spending category in which you have a credit card that has a good reward for it. The higher the return the better, but that goes without saying.
Synergy strategy of Chase Credit Cards
Some examples of these spending categories are gas, retail stores, or phone, internet and cable.
Quite often, people get multiple credit cards from the same rewards program that cover different categories.
For example, some people may get multiple credit cards from Chase in order to maximize rewards from their spending. They use different cards when they spend on different things that fall into some of these different spending categories. All of these cards earn points in Chase’s rewards system, Ultimate Rewards, at different rates for different categories.
Another common reward’s system that offers multiple cards with different rewards categories for the same rewards program is with American Express, called Membership Rewards. These points in both rewards systems offer 1 cent per point in cashback, however, they can also be transferred to airline miles, hotel points, and gift cards for more value. Many people gravitate towards either or both of these programs due to the flexibility in point transferal and their higher redeemable value in other ways than cashback.
Due to these two programs being some of the strongest rewards programs out there, they both have well-known credit card combinations with high credit card synergy. Many online communities devoted to using credit cards as a financially advantageous strategy strongly advocate for some of these credit card combinations. Some of which are called “The Amex Trifecta”, “The Chase Trifecta”, and even “The Chase Quadfecta.” You can read about some of these combinations from popular blogs and websites such as The Points Guy.
The Points Guy has articles on all of the combinations just listed.
- The Power of the Amex Trifecta: Platinum, Gold & Blue Business Plus
- The Power of the Chase Trifecta: Sapphire Reserve, Ink Preferred & Freedom Unlimited
- Maximize Your Wallet With the Perfect Quartet of Chase Cards
Although these are great card combinations with high synergy between them, these combinations are not set in stone. Different communities, forums, and blogs will offer different combinations under the same names, all having very high levels of synergy.
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You can see this in The Points Guy’s definition of the chase trifecta being Chase Sapphire Reserve, Chase Ink Preferred, and the Chase Freedom Unlimited. This is a good combination and covers a lot many of those bases that we previously discussed.
The Chase Sapphire Reserve has a 3 points per dollar reward for travel and dining. The Chase Ink Preferred has 3 points per dollar on travel, shipping, internet, cable, phone services and advertising purchases in social media and search engines. Finally, the Chase Freedom Unlimited covers all other costs with 1.5 points per dollar on any expense.
The Points Guy's website also gives another alternative to this card in the Chase Freedom, which is the sister card to the Chase Freedom Unlimited, and it has a 5 point per dollar reward on quarterly rotating categories. Some common rotating categories on this card throughout the year are gas, drug stores, tolls, and lyft.
Both the Chase Freedom and the Chase Freedom Unlimited are great to use on any categories not covered by the Chase Sapphire Reserve and the Chase Ink Preferred. So, in total, you have 3 points per dollar on 7 different spending categories with either 1.5 points per dollar on all other expenses when you use the Chase Freedom Unlimited card or 5 points per dollar depending on the quarterly categories with the Chase Freedom.
This combination definitely has high synergy, but with a high annual fee on the Chase Sapphire Reserve, a moderate fee on the Chase Ink Preferred, and spending categories such as advertising purchases that aren’t applicable to many people, this may not be the most feasible credit card combination with high synergy for most people. Not to mention it includes the Ink Preferred, which is a business card that proves to be hard to acquire without a small business or sole proprietorship with some sort of additional income.
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Ask Sebby, another popular blogger on this subject defines the Chase Trifecta differently.
His combination of cards includes either the Chase Sapphire Reserve or the Chase Sapphire Preferred, the Chase Freedom, and the Chase Freedom Unlimited. This is a combination that still requires you to have an annual fee card either in the Chase Sapphire Reserve and the Chase Sapphire Preferred, but it gives you the option between a card with a $450 dollar fee in the Reserve and a card with a $95 dollar fee in the Preferred.
You may be wondering why you would get a card with such a high fee if you can get one with a lower one.
The Chase Sapphire Reserve has better travel benefits which you can read about in the aforementioned links above. The Preferred differs from the Reserve in which its rewards are slightly lower.
The Chase Sapphire Preferred offers 2 points per dollar on dining and travel in comparison to the Reserve which offers 3 points per dollar in these categories. With either of these cards, you can then finish out Ask Sebby’s version of the Chase Trifecta with the Chase Freedom at 5 points per dollar in quarterly rotating categories and the Chase Freedom Unlimited with 1.5 points per dollar on all other expenses. Ask Sebby’s version of the Chase Trifecta offers a combination that may be a little bit more applicable to the natural spending of most people rather than The Points Guys version that is a little bit more business oriented.
It is also good to note that if you want to be able to redeem Chase’s Ultimate Rewards points for the highest value, you must hold at least one of the higher tiered cards including the Chase Sapphire Reserve, Chase Sapphire Preferred, or the Chase Ink Preferred. Holding an account with one of these three cards will allow you to transfer to airlines and hotels in order to get the most out of Ultimate Rewards.
Synergy strategy of American Express Cards
As far as the American Express Trifecta goes there isn’t much flexibility when it comes to the combination of cards involved in it. The Amex Platinum, Amex Gold, and Amex Blue Business Plus seem to be the three cards in consensus in this formation for optimum credit card synergy. Find out more about the American Express Trifecta through The Points Guy's link above.
However, there are other programs out there besides Chase and American Express that offer different credit cards so that you can choose the right synergy for you. It is often recommended that after you build one of the card combinations mentioned previously, you start to add other cards to your wallet. These cards could include airline cards that give high levels of rewards for purchases through those specific airlines, or hotel credit cards that do the same.
Summary
Even if you are more of a cashback person than a points program person, there are plenty of credit cards out there that offer different rates of cashback for different categories. The key is to find the right combination of cards with the highest level of synergy for you and to use these cards responsibly in order to maximize your return value on your natural spending.
There are different types of bank programs out there with different rewards systems, and due to the competition between companies, new opportunities to maximize rewards continue to show themselves. In essence, if you want to get some value back from some of your everyday spending, find a rewards program that appeals to you. Then build your credit and spend responsibly as you find credit cards that work well together within that rewards system so that you can cover all your spending bases.