75. Getting Your P2 Approved, Business Credit Cards for W-2 Employees, and the Future of Points and Miles: Q&A

Welcome to Point Me to First Class, the only show for employed professionals, entrepreneurs, and business owners who are looking to optimize their higher-than-average expenses to travel the world. I'm your host, Devon Gimbel, and I believe that your expenses are your greatest untapped asset if you know how to leverage them. Ready to dive into the world of credit card points and miles so you can travel more, travel better, and travel often? Let's get started.

Welcome back to the podcast, everybody. Today's episode is another listener Q&A segment. This is where I answer questions sent to me by podcast listeners on a variety of credit card, points, and award travel topics. So instead of my usual episodes where I take a deep dive into one specific points or award travel topic, the listener Q&A episodes give me an opportunity to talk a little bit about a lot of things. That's exactly what we are going to be doing today.

I'm going to be covering questions about applying for credit cards, the difference between co-branded credit cards versus transferable points earning credit cards and why that matters, how to strategize where to put airline spend, what credit freezes are and what they do and don't protect you from, and more. As you can tell, there is a broad range of questions that we are going to dive into today. So, there should be something for everyone in this episode. That being said, let's go ahead and get started. 

The first question that I am going to be talking about today has to do with getting approved for credit cards, and specifically what to do or how to handle somebody who is relatively new in the credit card world getting credit cards.

So I was sent an email from someone who said, “That it sounds like having a P2 or a partner in the points game is a big benefit, but I'm having issues setting my husband up, and I'm hoping that you can give us some help navigating his journey.” 

So this listener's partner is a stay-at-home dad. They don't generate income, and they have never had a credit card in their own name. So this partner has always used a debit card for their spending. Then once they were married to the person who submitted this question, the partner started using their spouse's credit cards as an authorized user. 

So even though this person has a strong credit score, around 740, they are having a hard time getting approved for their own rewards credit card. Apparently, they've already been declined for two rewards credit cards from different issuers, and they're wondering kind of where to go from here, what is the next step?

So I have a couple of different thoughts about this. So first of all, this is true whether or not you are applying for your very first credit card or potentially your 31st credit card. That is that invariably almost everybody is going to have a credit card denial at some point. So one of the things that I think is important to start with here and to think about is this person has mentioned that their spouse has been declined for two rewards credit cards from different issuers. 

One of my first questions is what were the reasons for those denials? Knowing this can help you strategize your next steps or make a plan moving forward. So if you apply for a credit card and you get denied for that card, you should be receiving a hard copy letter in the mail at your mailing address that actually delineates the specific reasons why your application was denied. 

This can be very, very helpful because one, if there's information on there that's just not correct, there's something you can do about it. But if all the information on there is correct, again, this is going to help you decide okay, what do you want to do about that so that you can repair sort of those issues, or you can address those issues before you apply for your next card.

Now one of the things that you want to keep in mind as well that a lot of people don't realize is that when it comes to receiving a credit card denial, you don't just have to take no for an answer. I think a lot of us, especially if you identify as someone who, I don't know, is an overachiever or type A, you may receive a credit card denial the same way that you received a college application denial when you were in your teens. It can feel really, really horrible, and I just want to normalize the fact that a lot of these decisions are made by computer algorithms. They are not personal and they're not final. 

So one of the things that I want you all to keep in mind is that when you submit a credit card application, that credit card application is actually still sort of valid and alive for 30 days. So if you get a denial, you still have recourse. One of the easiest things that you can do is that you can actually just contact that credit card issuer and be polite, but ask hey, is there any way that I can have my application reconsidered? Or are there any questions that you have about this application that I can answer for you that might then allow you to take another look at this application? 

One of the banks or credit card issuers that does this really well is actually Chase. If you get a denial for a Chase credit card, I personally think it is incredibly worthwhile to call Chase. They have a specific, it's called a reconsideration phone number. There's one for personal credit card applications and one for business credit card applications. 

You can call the reconsideration phone line and tell them the card you applied for, when you applied for it, the decision that you received, say hey, can we actually have this application reconsidered? I have had denials overturned for that reason. I think one of the most surprising things is that when you get a credit card denial, you might think you know the reason why it was denied, but then if you call and actually speak to a representative, you may find out that the credit card was denied for a completely different reason that you can very, very easily clear up or address and then get an approval. 

So my number one question or my first question for this couple is just first do we even know for sure why this person was declined for those specific two rewards credit cards? What were the reasons for those denials? If they are still within, again, that sort of initial 30-day period of submitting their application, do they want to just go ahead, contact the credit card issuers, and find out whether or not those applications can be reconsidered? 

But let's just assume it's been way more than 30 days. They've applied for those two credit cards, and those applications are just done and final. There's a couple of other, I think, considerations in this scenario. 

One of them is that when there is a partnership of two people who each independently can theoretically go out and apply for their own credit cards, there are so many great reasons for each individual adult in a partnership to have cards under their own name. It's not just for points earning, for the ability for each partner to go out and independently sign up for new credit cards, earn welcome bonuses, again, potentially even refer one another for credit cards to be able to earn referral bonuses. But I think also just for like this scenario, for credit building and financial autonomy.

I understand from ease, simplicity, convenience, especially for people who are married or in a partnership and have shared finances, why so many times there will be sort of like the one partner who kind of is the credit card account holder, and they just routinely always make their partner the authorized user. Again, that makes sense from a convenience and simplicity standpoint, but you can run into problems like we're seeing here. 

So the other thing that I want to bring up, specifically in this scenario where you have a two-person partnership where one person works outside of the home, generates earned income, the other person works inside of the home and doesn't generate earned income, that actually should not be a huge barrier in terms of the, quote unquote, stay at home or the working within the home partner to be able to apply for their own credit cards.

Because when you apply for a personal credit card, one of the questions on that credit card application is they ask you to list your household income. So if you are part of a two-person household, then you should be listing your total combined household income on your credit card application. So for the partner, again, who's working from within the home, that should then mitigate the fact that on their own, as an individual, they might not be able to prove earned income, but as a household, that household absolutely has a combined income.

So it is also possible that, again, if this is the first time that that partner's ever applied for their own credit card, that maybe they actually just put down as their own earned income something that is not actually representative of the total household income. So that's the other thing to keep in mind in terms of applying for credit cards, especially if this is one of the first cards that you are trying to apply for. 

Now, all of those things being said, just one additional point of consideration because this may come up for all of you, whether or not you have a partner who works from within the home and they're starting their credit card journey. Perhaps you have children, and you're looking forward to the time when you want to help them start their financial responsibility journey, get them their own credit cards is that there are going to be different rewards credit cards that are more or less challenging to get approved for just for a lot of different factors.

But even if you do have a strong credit score, that doesn't guarantee that you're just going to be approved for any card that you apply for. Some credit card issuers, they want to see that you already have credit cards in your name as the personal primary account holder before they're going to want to extend credit cards to you. 

So one of the things that can happen, especially in this scenario where you are really trying to establish yourself as a credit card holder for the first time, even if you do have a strong credit score, is that you may face this challenge of applying for some cards initially and not automatically getting approved for them. In that case, it can be helpful to start with some more entry level type or lower annual fee type credit cards as one of your initial credit cards. 

So an example of this would be like within the Chase points ecosystem. Instead of applying for the premium personal travel rewards card, the Chase Sapphire Reserve card, if you apply for that and you get declined and you otherwise have strong factors in your favor in terms of a credit card issuer giving you a credit card then starting with one of the more entry level credit cards, like one of the Chase Freedom cards, may make it easier for you to get that initial approval. Then as you start to show responsible spending habits and credit card usage on that initial card, it can make it easier for you to get additional cards within that same credit card issuer in the future.

The other consideration that I think can be very helpful for folks in this situation is that applying for a rewards card that's actually a charge card instead of a traditional credit card can be really helpful. Great examples of this within the American Express family of cards. When you look at the American Express membership rewards earning personal cards, like the Green card, the Gold card, even the Platinum card, which is a premium level travel rewards card. These are all charge cards, meaning they do not have a preset spending limit. Part of the way that you have to use a charge card is that you have to pay off your statement in full every single month. 

The good thing about that, which, again, you should be doing anyway with any of your points earning cards, but for charge cards specifically, one of the great things about that is that at least in my experience, it seems that charge cards are more easy. It's easier to get approved for them than traditional conventional credit cards because the risk to the lender is much lower. 

So if you or your partner or someone that you are trying to help with their credit card strategy is having a challenging time getting approved for their very first card or is having a challenging time getting approved for points earning credit cards, then starting with a charge card like one of the Amex cards, I would say a Green card or a Gold card before you jump all the way to the platinum card can be a really, really useful strategy. 

So, hopefully that gives you some ideas for how to approach if you or someone in your life is trying to get into the rewards credit card game from the very beginning if you don't receive an automatic approval the first or second time that you apply for a rewards credit card.

Okay, moving on. The next question is also about applying for credit cards, but in a little bit of a different direction. This question says how can I get a business card if I don't have a business per se? I like this question because there's a lot of different directions we can go with this.

But I will start out by saying, again, when you think about all of the different points earning or rewards credit cards that are available to you, most issuers will have a set of personal or consumer credit cards that you can apply for. A lot, not all, but a lot of issuers also have business specific or business designated credit cards that you can apply to as a business owner. 

The difference between personal and business credit cards, there's a couple of big differences, but from just a user perspective, one of the things that's great about business credit cards and applying for them or being able to hold them is that, in general, they tend to have higher, stronger welcome bonus offers than personal credit cards do. They often times also require more, sometimes significantly more, minimum spend than personal cards in order to earn those welcome bonuses. But, again, they tend to have higher welcome bonuses than personal cards. 

They also tend to have different bonus categories. When you think about business credit cards, they tend to have bonus categories that are aimed at traditional business users and their categories of spend. So you're not going to find business credit cards that tend to have bonus categories in things like groceries. There's not a lot of traditional businesses that have “quote unquote” high grocery spend. Instead you're going to find bonus categories on things like travel, dining, gas, other areas that are business related like social media ad spend, computing services, those types of things.

So having a business credit card can be great in terms of not only earning more or different sign up bonuses, but also having access to credit cards that have different bonus categories that may be available on personal credit cards or just different perks or benefits in general.

Now, one of the things that I think is a huge misconception or just a misunderstanding in terms of getting business credit cards is who does and who does not qualify for a business credit card. One of the things that I really want to dispel is this idea, if you have it, about what you have to have or what you have to do in order to qualify for a business credit card because I think there's a lot of us.

I had this idea in the beginning when I was first learning about credit cards. I was a W-2 employee, right? My entire paycheck came from my employer. I didn't do any business activities outside of my employed job. So I just assumed, obviously, I'm not going to qualify for a business credit card.

But that is not true. So many people can apply for a business credit card. You don't even need to have a business that is your main source of income. I think that that is one of the biggest misconceptions that you think well, my income doesn't come from running or owning a business, or the majority of my income doesn't come from running or owning a business. That doesn't matter. You don't need to be running Amazon or running Nike in order to qualify for a business credit card. So that's the first thing that I want to clarify. 

So let's talk about what do you actually need in order to qualify for a business credit card? So all you need is some sort of business activity, right? So, again, this does not mean you need to own or run your own law practice or run or own your own medical practice. You absolutely can. If you do that, you should get business credit cards. But even if you are a W2 employee, chances are that you are engaging in some activities that will absolutely qualify you for a business credit card. They don't even need to be high income generating activities.

So let's say that you are starting a side gig. That you want to start some sort of business around consulting for people. Again, this does not have to be what you spend the majority of your time doing. If you consult in your area of expertise with one other person or business or company over the course of a whole year, that qualifies. If you are going to start freelancing and you want to submit a couple of articles for publication, that qualifies. 

If you've ever sold anything anywhere, have you ever sold some jewelry on a Facebook group or you ever sold a product that you created on Etsy? Again, this does not need to be you are generating five or six figures on a monthly or annual basis in order to qualify. So many different things qualify. 

For those of you, again, who work primarily in a W2 employed professional capacity, have you ever given a talk outside of your organization? Have you ever been invited to give a grand rounds or to give a presentation, again, anywhere else, even if it's virtual? There are so many, so many different activities that qualify you as having a business. You do not need to have a legal entity in terms of having a tax ID number in order for you to qualify to have a business credit card.

You can be just a regular person and apply for a business credit card as a sole proprietor using your legal name as your business name and your social security number. So, as long as you have a legal name and you have a social security number that qualifies you to apply for credit cards, you can absolutely qualify for a business credit card. So I think the main takeaway here is there are so many things that you might imagine that you need in order to qualify for a business credit card that you do not actually need. 

The other thing that I want to say about this is when you, if you ever look at a business credit card application and you're planning on applying as a sole proprietor, again, using your legal name and your social security number to apply, that business credit card application is going to ask you questions like how many years have you been in business with this business? What is your expected revenue? Usually what's your expected annual revenue? 

Please don't have a heart attack and think that because, again, you can't write down $150,000 in revenue that you don't have a chance of being approved for a business credit card. There are so many businesses that need access to credit that want to have a business credit card in order to separate out their business expenses from their personal expenses before that business has ever generated revenue that it is not at all uncommon for people to apply for business credit cards with very, very little actual business revenue yet. 

So it is okay if your total business revenue so far is $100 from filling out surveys outside of, again, your organization of employment. It's okay if right now your business revenue is $250. Don't think that until you have, again, five or six figures of business revenue or expenses that you're not going to qualify for a business credit card. You probably will be able to get approved.

So, first of all, if you've never thought about applying for a business credit card or if you just assumed that you wouldn't qualify for one, I hope that this little mini conversation has helped to dispel that notion. So go out, start looking at potential business credit cards if you are interested in applying for them and don't be scared to apply for them. 

All right, moving on to the next question. This is a very specific question, but in my answer, I'm going to try to broaden my answer to make it applicable to people even if this very specific example is not one that you are encountering. 

So this next question is asking do the points earned with a Marriott Bonvoy Amex card only get used for Marriott, or do they go in your general Amex account? I love this question because it touches on a couple of bigger topics that, again, I'm going to try to make apply to as many people as possible. 

So the first topic that this question brings up that I want to touch on is the difference between a co-branded card and a transferable points earning card. So the example in this question of a Marriott Bonvoy Amex card, this is an American Express card, but it is a co-branded card meaning that the card is attached to a specific hotel or airline loyalty program. 

So American Express issues the card, but it's a Marriott credit card. So this is a credit card that's going to earn specifically Marriott points. So any time you are looking at a credit card, and it is an airline specific credit card, like a United card or an Alaska Airlines card or an American Airlines card, or you're looking at a credit card that is a hotel specific credit card, like a Marriott card, Hilton, Hyatt card, these cards are going to earn points or miles in the currency of that specific airline or hotel loyalty program. 

So, for this example, any time you put any type of spend on a Marriott credit card, you're going to be earning Marriott points. You're not earning American Express points, even though American Express is the issuer of this specific card. Okay. So that's the first thing that you want to understand is that co-branded airline and hotel credit cards earn points or miles in that specific airline or hotel loyalty program. 

What that means is that as you put spend on that card and you pay off the balance, the points that you earn, they're going to show up and they're going to live in your specific airline or hotel loyalty account. So in this case, those points earned on the Marriott Amex card, they're going to show up as Marriott points in your Marriott account. They're never going to show up as American Express points in your Amex account. They're not going to show up as Marriott points in your Amex account. That doesn't even exist. That's not a thing. They're just going to show up as Marriott points in your Marriott account.

This is what makes this question very interesting. There's a little asterisk next to Marriott, which I'll come back to in a second. But when we think about basically all of the other airliner hotels, specific credit cards. Again, if you have a United card, you're going to earn United miles that show up in your United airlines account. If you have a Hilton co-branded card, you're going to earn Hilton points that then show up in your Hilton account once you have earned them. 

That is where they live. You cannot move Hilton points out of Hilton and into American Express or out of Hilton and into a Marriott account. Likewise, you cannot take United miles earned on a United credit card that get deposited in your United frequent flyer account. You cannot move those United miles out of United and stick them or transfer them into your Chase account or move them out of United and move them into a different, entirely different, airline frequent flyer account. Okay.

So one of the things that you want to understand about the airline and hotel co-branded cards is first they earn points in that specific hotel or airline points currency that stays in your airline or hotel account. You don't earn those points through your overall credit card issuer like Chase or American Express. With pretty much all of the airline and hotel co-branded cards, those points cannot be transferred anywhere. They can only be used or redeemed through that specific airline or hotel loyalty program. 

Now, Marriott is a bit of an outlier for two reasons. Number one, Marriott is interesting in that there are Marriott credit cards that are issued by American Express, and there are Marriott credit cards that are issued by Chase. There's a lot of different rules and regulations about which one of these that you're going to be eligible for based on if you have any of the other ones or how long you've had them, but just know that you can get one of several Marriott credit cards either from American Express and or from Chase. 

But again, all of these Marriott credit cards earn Marriott points. They do not earn Amex points and they do not earn Chase points. But the interesting thing about Marriott that we don't talk about as much as we used to is that Marriott points, when you earn them in your Marriott account, this makes them very different from all of the other hotel and airline specific points. 

Marriott points are actually a transferable points currency. Many, many, many moons ago now there was a program that is now expired, defunct dead because Marriott ate it up called SPG. SPG was a hotel loyalty program, and its points were transferable. You could transfer them out to, I think at the time, at least 20 different airlines. Marriott came along, bought out, gobbled up, ate up, destroyed the SPG program. 

But one thing that remained was that then Marriott points from that time on, they still retained the transferable status. So if you do happen to have Marriott points, either from paid Marriott stays or because you have a Marriott credit card or multiple ones, you can actually transfer your Marriott points out of your Marriott account and to many, many, many different airline partners. I think Marriott has almost 40 airline transfer partners, including some unique ones that are not shared by any of the other five traditional transferable points currencies like Asiana Airlines, Copa, Japan Airlines. 

So there are points transfer opportunities with Marriott points. The things that makes it a little bit less maybe valuable or interesting than the five major transferable points currencies is specifically the transfer ratio. So when you want to move points out of your Marriott account and into one of their airline transfer partner accounts, the transfer ratio is three to one, meaning that for every three Marriott points you transfer out, you end up with one airline mile on the other end of that. 

So if you transfer out 300,000 Marriott points to, again, I'm just going to pretend Alaska Airlines. Instead of having 300,000 Alaska Airlines miles after that transfer, you would only have one third of that. So 100,000 Alaska Airlines miles. So from just a value perspective, most of us don't consider that transfer ratio to be as attractive as the one to one transfer ratio that we see in many of the transferable partners of Amex, Chase, Citi, Bilt, and Capital One points. 

So like I said, Marriott is very unique in this way. All of the other co-branded airline and hotel points currencies, they are not going to have this very sort of interesting transfer partner relationship. 

So for this question specifically, I wanted to hit on what is the difference between an airline or a hotel co-branded credit card versus a credit card that earns transferable points. Also, where do the points that you earn on a co-branded card end up landing and how you can use them.

So, again, just as a sort of wrap up, notice any of your credit cards that have a hotel or an airline name on the credit card, just be aware that regardless of what bank actually issues that credit card, you are not going to be earning transferable points on that credit card. Those are points that you're going to earn that are going to show up in your hotel loyalty account or in your airline loyalty account. 

For the most part, unless they're Marriott points specifically, those co-branded credit card earned points are going to be, quote unquote, stuck in that one airline or hotel program. Meaning you can use them for redemptions within that one program, but you're not going to be able to transfer them out and have this wide range of transfer partners, like we see with the transferable points currencies. 

Okay, moving on, we have another question about a more niche card, a co-branded card, and this is the question. This person writes that they have something that they need guidance with. “I'm going to be purchasing nine plane tickets for a group of people that I will then be reimbursed for by my company. Am I wasting my opportunity by using my Delta SkyMiles Amex to book these flights? It will boost me up to platinum medallion status, and I'll earn around 120,000 miles. Am I missing a better deal out there?”

I love this question. I think it's worth talking about because I think for so many people, there is an assumption that if I'm going to be booking flights on an airline, then an airline specific credit card should by default be the absolute best choice for making that cash flight purchase. Sometimes it is, and sometimes it's not. 

So I want to talk about kind of some of the areas of consideration that I think it's worthwhile to have if you are facing this scenario where you are expecting to purchase cash flights from an airline, and you have an airline specific credit card that you're considering using for that purchase. So I want to kind of highlight maybe three important points around this question.

Okay. The first point is just thinking about from the points earning perspective about how can you leverage cash spend on airline flights so that you can earn the most number of points possible. In this example, using a Delta credit card to book paid cash flights through Delta. Again, I think a lot of people would assume oh, this has got to be the best points earning for this particular expense. 

Here's what's really, really interesting is that that's not always and sometimes never actually the case. Okay. One of the reasons that I think airlines specifically airline co-branded credit cards, a role that they are oftentimes very weak at playing is specifically points earning, even for cash paid flights. Let me explain this a little bit more. 

Many airline co-branded credit cards, while they do earn more than one point per dollar spent on cash flights, still have weaker points earning than other credit cards may have. So purely from a points earning perspective, I think there are a lot of times where even an airline specific credit card is not going to be your best bet in terms of earning points for airline spend. 

So in this scenario, this person has a Delta credit card. There are a couple of different personal Delta cards. They're all issued by American Express. Depending on which Delta credit card you have, it is most likely going to earn either two Delta miles for every dollar spent on a Delta flight or three Delta miles for every dollar spent on a Delta flight. 

So that bonus category, earning two or three times Delta miles on a cash paid flight, may sound like a really good points earning rate. It's certainly much better than earning one Delta mile for every dollar spent, which is I think kind of useless. But, like I said, there are oftentimes going to be other non-airline specific credit cards that have much stronger points earning even for flight specific expenses. 

So one example of this is the personal American Express Platinum card. The personal Amex Platinum card earns five times points on flights when you're booking them through an airline. Okay. So just for this one specific Delta example, you can earn, let's even say three Delta miles for every dollar you spend using a Delta co-branded card to pay for Delta flights. Okay. 

So you can earn three Delta miles per dollar spent, or you can have the personal Amex Platinum card, put that same exact spend on your personal Amex Platinum card, and earn five points for every dollar spent. So purely from a point earning perspective, you can oftentimes earn more points using one of the transferable points earning credit cards that bonuses flights or travel as a bonus category.

Another example of this is a Chase Sapphire Reserve. That card earns three times points on paid cash flights when you book them directly through the airline or five times points when you book flights specifically through the Chase travel portal. Similarly with the Capital One Venture X card, that card offers five times points on flights when you book flights through Capital One travel. 

So number one, think about, especially when you're going to be purchasing airline flights, is your airline co-branded credit card actually going to give you more miles for every dollar you're spending than a different credit card might? Oftentimes, like I said, the answer is no. Many times you're going to do better with one of the transferable points earning credit cards. So that is the first topic when I think about kind of these niche cards and their spending. 

The second topic is one that I already kind of talked about in that last question with Marriott is you always want to be aware of the points you are earning and are they fixed, or are they transferable? If you have a Delta, or again, any airline co-branded credit card and you are buying flights on that airline with your credit card, you are going to be earning miles within that specific airline program. You are not earning transferable or flexible points for that spend. 

So in this scenario, if you use a Delta credit card to pay for thousands of dollars’ worth of Delta flights, not only are you earning fewer Delta miles than you could be earning Amex points or Chase points or Capital One points, but the Delta miles that you are earning again are Delta miles. They cannot be moved anywhere else. They cannot be used outside of the Delta program. 

I personally think that in many scenarios, airline specific miles are going to be less valuable than transferable points currencies like Amex Membership Rewards points or Chase Ultimate Rewards points simply because of the options that exist for you for many, many airline transfer partners when you have a transferable points currency. 

So as far as I'm concerned in this scenario, using a Delta card to book Delta flights paid in cash, I think the two kind of misses here are that one, you're going to be earning far fewer points or miles for every dollar you spend if you're going to pay with a Delta card versus a transferable points earning card. Then number two, the miles that you are earning are going to be inherently less valuable because you have fewer options of how to use them than a transferable points currency. 

For this very specific example, I don't think it makes sense from a points earning perspective to use a Delta co-branded credit card for this expense over something like the personal Amex Platinum card. Because not only does the personal Amex Platinum card, again, earn five times points on paid flights, but you can then transfer those Amex points earned to tons of different airlines, including Delta. So you actually earn more points that you could use on Delta by using an Amex personal Platinum card to pay for that flight than even by using that Delta card upfront. 

Now, the one thing that I do want to acknowledge and point out here because it is relevant in this question is the fact that even if you can earn more points by using a transferable points earning card that I think are oftentimes more valuable than fixed airline miles, even when that's an option, you still may actually want to sacrifice that and put airline spend on an airline co-branded credit card when earning status in that program is very, very important for you and that spend is part of your status earning plan. 

So I think it's useless to put a couple hundred dollars of airline flights on a co-branded credit card because a couple hundred dollars is not going to make a huge difference in terms of helping you to earn elevated levels of status within an airline program. 

But if one of your main priorities in terms of your travel goals is that you are working towards status in an airline program, and you understand that allocating spend to an airline co-branded credit card may sacrifice some points earning but is going to enable you to hit the level of status you want and you get enough benefit from that status to offset the opportunity cost of using that card. Then I think it can make a lot of sense to put paid cash flights on an airline co-branded card.

So this is a great example of a question or a scenario where, again, there is no one right answer. It's not that all airline co-branded credit cards stink. You should never use them. I don't think that's true whatsoever. I think that if you are thinking about putting paid cash flights on a credit card that you should not just assume by default that an airline co-branded credit card is always going to be your best bet. 

I think that there are scenarios where it absolutely makes sense to use an airline co-branded credit card for paid cash flights, but if you are not in one of those other scenarios and what you actually want to do is just maximize your points earning then I would suggest that you look into getting or using a different rewards credit card that's just going to give you more points per dollar spent on flights period. 

Okay. Moving on to our next question. I love this question. I will probably end up doing an entire deep dive episode just on this topic in the future, but I haven't talked about it yet on the podcast. So I thought let's just start by adding it to one of these Q&A episodes and at least starting to scratch the surface on it. 

This question is what credit card would you get if you were building a new house? This is likely a nine to 10 month project. So I love this question because I think there are so many opportunities that exist when you have a sort of I consider it a single large spend. 

So it might not just be one single time that you're putting an expense on a credit card, but when you have a really large expense that falls outside of just your regular monthly or annual expenses, this can be such a fantastic points earning opportunity, but oftentimes it requires a very, very different strategy than the strategy that you have for just leveraging or optimizing your regular, again, every day or monthly spend. 

So there are a couple of ways that I think about this. The first thing that I want to consider is just the question: what credit card would you get if building a new house? First, my answer is I would probably get multiple credit cards. I probably would not focus on just getting one single credit card if you are looking at leveraging what I am anticipating to be a significant spend. 

So I have no idea the details of this person's house build, but I'm going to assume, let's just say, this is going to be at least a six figure spend, if not a multiple six figure spend. That is a very different strategy and approach than just let me look, again, at all of my regular expenses and build a credit card plan around that. 

So here are some kind of high level considerations that I would think about if I was about to build a new house or for any of you who are looking at an anticipated upcoming, very, very large expense. Here are a couple of things that you are going to want to find out before you start putting together a plan or making any decisions.

So number one, I think that it's helpful to have an estimate of how much total spend are we actually talking about here? How is that spend going to be spaced out? Right? Having a single $70,000 expense can look very, very different than having $150,000 expense but that you are going to pay out in increments over three months or six months or nine months. So we want to know, what is your overall estimated total spend for this large expense that's coming up? How is that spend going to be spaced out? 

The other thing that I think is really important to think about is the spend or what amount of that spend for a big expense, is it going to be category spend or non-category spend? Meaning is this expense going to fall into a category where with the right credit card, you could actually really take advantage of a bonus category. 

So an example of this is something like, let's say that you're going to be holding a large event at a traditional kind of hotel venue. You're having a bat mitzvah, you're having a wedding, you're having a conference, you're having some sort of event at a hotel venue where a large part of your expense is actually going to code a specific way. Maybe it's going to code as hotel spend, or maybe it's going to code as food spend if this is all going to be categorized based on like a catering company or something like that. 

So you definitely want to have some sort of estimate for these really, really large single spends of is this actually going to qualify as some sort of category spend, or is it going to be non-category spend? Because that is going to influence then which card or credit cards are going to be the most valuable for you to use on that spend. 

Now, in this example of building a new house, I'm just going to assume that majority of this spend is actually going to be non-category. Now, some of it actually may fall under that category of like home construction stores. Are materials going to get sourced from a place like Home Depot or Lowe's? That's important because some credit cards do actually have home construction stores as a bonus category. So, again, you're going to want to start figuring out how much, if any of this spend is actually going to be some category spend versus non-category spend and then build a credit card plan around that. 

The other thing that I would caution you or at least recommend that you try to figure out specifically for a house project, whether it's building a home or renovating a home versus some other types of really large spend, is this is where you're definitely going to want to at the very beginning phases of this project talk to your contractor or your vendor and try to figure out are they even going to accept credit cards for payment for whatever this project is? Or are they going to say they outright don't accept credit cards, or do they have an option where they only accept credit cards as long as you as the buyer have to pay some sort of credit card processing fee?

You definitely want to clarify this before you start making a plan or before you start assuming that you're going to have this, in my view, really amazing potentially multiple six figure spend to leverage. So I have seen so many stories of people who have made a plan for a really large home renovation project. They've secured a contractor. They have plans already set in place. Contracts are signed. 

Then they learn about credit card points, and they want to start leveraging credit cards to earn points on that huge spend only to find out that the contractor that they have already signed with doesn't accept credit cards, or accepts credit cards but at a really high processing fee that would no longer make it feasible to earn points for that expense. So these are some of those high level questions that you want to answer and figure out before you put any specific credit card plan in place.

Like I said, on a Q&A episode, I'm not going to dive really, really deep into the granular details of what that credit card plan might then look like. I will most likely do an entire episode on different considerations or points earning strategies for these individual, really large spend types of projects. 

But one thing that I will say here is that, again, assuming that you know the breakdown of category versus non-category spend for this project, you definitely want to consider getting, if you're open to it, multiple credit cards for a really large spend. This is going to allow you to take advantage of multiple signup bonuses that are going to be very, very easy to earn with a large project like building a new home. 

You also want to take into consideration when you are going to be making your payments. Again, how high of payment are we talking about? You want to make sure that you've lined up cards that are going to be able to sustain the levels of spend that you're expecting. So this might look like specifically getting charge cards instead of conventional credit cards, or making sure that you have at least one really solid credit card that earns increased points for non-category spend. 

So there's just a couple of ideas off the top of my head of things that you want to consider, whether you are planning to build a new house, do a large renovation project, or have some other really, really high expense anticipated event coming up for you in the next couple of months or year that you want to start planning for.

All right, moving on to our next question. This one has to do with freezing credit. this person wrote in and said, “Can you please explain why you would freeze credit? Why would you do it? What does it mean? What is the point?” Yes, absolutely. Let's talk about freezing credit and why I think everyone should at least consider it and what it actually means and what it doesn't mean when your credit is frozen. 

So when you go to apply for credit, it can be for a credit card. It could be for a mortgage, student loans, car loans, right? The person who's going to be issuing that credit most likely is going to want to pull your credit report so that they can get some sort of sense of what is your credit history like? Do they consider you reliable in terms of extending you more credit? 

So all of us walking around have three main credit reports by three main credit bureaus. So there's TransUnion, Equifax, and what's the last one also starts with an E. I'll think about it in one second. Experian, that's what it is. So TransUnion, Equifax, and Experian. So when you go and apply for credit, your credit reports are what's called pulled. They get looked at. They get accessed by the organization that is considering extending your credit. Okay.

Now a credit freeze. What this means is that you can go to each one of these three credit bureaus, and it's actually very easy to do now. It used to involve things like hard copy mail and filling out forms with like pens and pencils. Now you can do all of this stuff online. So you can go to your individual credit bureaus, set up an online account with them, and you can do what's called freeze your credit. What this means is that if your credit is frozen, then access to your credit report is limited. It means that someone else, a person or an organization, cannot pull or access your credit report. Okay. 

The reason this is important and useful is that this helps to protect you from credit card fraud. So I want you to imagine that you've gone online to each of these three credit bureaus. You have set up what's called a credit freeze with each individual bureau. Let's say that somebody walking around on the street somehow has gotten access to your personal protected information, and they want to go online, and they want to impersonate you and poses you and actually try to apply for a credit card using your personal information that then they intend to take and use. Then you are going to be stuck with the bill. 

Now if all of your credit reports are frozen, when that person goes online to apply for credit card under your name, your identity, if your credit is frozen, that means that the credit bureaus will not release the credit report to the banks when they want to come and check your credit report to decide whether or not they're going to issue a credit card. So this is protective for you. If someone else is trying to get credit, stealing your identity and your credit report is frozen, then all of the legitimate credit lending organizations are not going to be able to access the credit report. So they're going to deny those applications. 

This also happens to you if you have intentionally frozen your credit reports, and you forget about that. You are also not going to be able to get approved for additional credit cards, most likely, if you go and apply for a credit card online, even legitimately, again, for yourself under your own identity, using your identity. 

If a credit card issuer cannot access your credit report because you froze it, then you're not going to get approved for new credit cards as well. This is just a helpful reminder that when you go to intentionally apply for a credit card, make sure that you have unfrozen your credit reports so that you don't get an automatic denial just because of that. 

So freezing your credit can help reduce the risk of unauthorized users opening new accounts in your name. Because when lenders cannot view your credit file then they're not going to extend credit in the form of new credit cards or loans to you or someone using your identity. So credit freezes can be really helpful in preventing other people from opening accounts in your name. 

But, again, they also prevent you from opening new accounts in your name. But that's very easy because, again, once you've set up your online accounts, which with each of the three major credit bureaus, when you've gone in and frozen your credit, there's also an option to do what's called a thaw. Which means that if you have a plan to apply for credit, whether it's a new credit card or a different form of credit, you just have to log back on to each of your three online accounts, and you can set up specific dates where you want to it's called thaw your credit report, which just means that your credit report is going to be accessible. 

Again, you get to determine the dates. It can be for a single day. It can be for a week, but you can set when you want your credit to become accessible and when you automatically want it to get frozen again. So you are in control of that process. 

Now one thing that's really, really important to understand about freezing your credit is, like I said, this is protective in that credit lenders or credit organizations should not be able to access your credit report when it's frozen. So it's protective against people who are not you trying to apply for credit under your name. 

The important thing to understand though is that freezing your credit cannot protect you entirely from identity theft. So if someone steals your social security number or accesses your personal information, they can still do other activities like file a fraudulent tax return or a health insurance claim in your name. So just freezing your credit is not going to be entirely protective against those types of activities, but it is one step in protecting yourself from unauthorized users trying to get access to new credit in your name.

So I think having your credit reports frozen is now, again, just very easy, very straightforward process. I can't think of any great reason to not have your credit frozen if you're in a period of your life where you don't actively anticipate needing to apply for new credit like on a daily basis. 

So last thing to know about freezing your credit is that when you institute credit freezes on your credit reports, this will not impact your credit score, and it won't impact your credit score when you go and you do temporary thaws of your credit freezing. So you don't have to worry about that aspect of freezing your credit. It's not going to do anything to your credit score. 

All right, last question before we wrap up today has to do with the future of points and points travel. I really like this question because I think it's one that if you haven't thought about yet, you probably will start to question at some point, which is that it seems like now more than ever, there are thousands of people learning this hobby. There are thousands of people who are newcomers to this and are just learning about it and are really excited to get involved in it. 

This question says do you ever wonder how long the points game will last? I feel like airlines and hotels will just make it more and more difficult to redeem points with so many people trying to do the same thing. I have a lot of thoughts and ideas about this. Maybe it's because I've been doing this for about 10 years now. So I have seen different trends, and I've seen different phases of people learning about points, people using points. So I want to give you just my overall kind of gestalt about this. 

I think it's really common for people, especially if you're getting into the hobby now recently within the last couple of months or the last year to have this sentiment, because now more than ever there are amazing enormous communities of people learning about points, using points, and talking about points.

I think this is the first time in our collective social history where there were things like Facebook groups that had 20, 100, 300,000 people all in a points Facebook group. So I think it is really, really common to look around and say oh my gosh, there are so many people doing this. Kind of where is the opportunity now? Or how long will this last? 

But I see it from a little bit of a different perspective. So one of the things that I think about a lot is when you are in a really self-selected group, it can be easy to forget that that group does not represent the whole entire world, even if it's a big group. 

So even if you're in a group, like I said, of a 100,000, 300,000 people talking about points, remember that there are millions and millions and millions of people traveling who know nothing about points, or millions and millions and millions of people traveling who have points but they use them the way that all of us use them before we decide to get more serious about this hobby, meaning they're earning points, they're exchanging them straight through their credit card account for travel or for gift cards or statement credits. 

There aren't that many people who are earning and using points in the way that people in this type of community do. Even if that is a hundred or 300,000 people, when you think of all of the people who are really enthusiastic about points, again, I still feel like that is very, very small compared to the overall number of consumers and travelers. 

The other thing and the other trend that I really pay attention to is that I think now what people are seeing and experiencing is that using your points, doing things like running award searches, especially on some of the award search platforms that have really kind of exploded in the last two years is that I do think if you want to consider it competition, that competition in that sense has gone up. 

I think that there are now more people who are more easily able to use their points on these higher value redemptions. I still don't see that as a bad thing. Because the flip side of that is I'm also looking back over the last 10 years, and I don't think there's ever been a time where it has been easier to earn as many points as you can as there are now. 

That's even taking into consideration rules and regulations around credit card eligibility that didn't exist 10 years ago. I think the opportunities to earn points, the number of credit cards that are available to us is larger now than it has ever been. So I don't really worry about how long the points game will last.

I think that there are a lot of vested interests that make a lot of money on points existing. I actually don't know if this is true or not. I should look this up. I have heard that many airlines generate more revenue from their loyalty programs than they do from actual cash paid flights. Truly. I have no idea if that's true or not, but I have no doubt that these loyalty programs are huge revenue generators for companies. So they have a literal vested interest in these programs continuing. 

That being said, everything has to exist in a balance, right? We can't just have points earning opportunities where you can earn 10 points per dollar spent on every single category, or as much as we're seeing credit card welcome bonuses that are amazingly high, I don't think we're going to see uniform million point credit card welcome bonuses. There have to be ceilings and caps on these things, but I really don't think that we're nearing the end of points being valuable. I could be totally wrong. I have no insider information. I hope I'm not wrong. 

But as I've said, this hobby has continued in sort of different iterations over the last 10 years that I've been in it. I don't even think I've been in it very long compared to some other people. So for those of you who are just getting into this hobby and you're kind of worried about this, I don't think that the points game is going to end anytime soon. 

I do think what's going to be required is a higher level of skill and knowledge if you really want to take advantage of some of the best redemptions out there. The beautiful thing is that you don't have to do that if you don't want to. You can still earn points and use them in a way that again is better than 80 or 90% of the population without even going to an extreme amount of effort. 

So I think there's so much room in this hobby, this game for so many more people, because many of us are looking for different things out of the hobby. So we're not actually in competition with one another. Like I said, I think the loyalty programs are highly incentivized to continue this. So I do think things will continue to change because they always do. I think new challenges will come up because they always do. But I also think new opportunities will come up because they always have. 

So I continue to be really excited about earning using points. I still have millions of miles in different loyalty programs and points currencies that I intend to put to great use over the next year or a couple of years. So this is not something that I feel like is a huge concern for myself personally at this point. 

All right, everybody, that is it for today. I hope that you found these questions interesting and heard something useful that you can use in your own credit card and points journey. If you liked this episode and want to hear more like it, then you can check out the two other Q&A episodes that I've done on the podcast in the past, episode number 13 and episode number 52. 

Also, if you have a question that you would like to submit for a future Q&A or ask me anything podcast episode, or if I briefly hit on a topic in today's episode that you would love for me to do an entire deep dive on as its own topic for its own podcast episode in the future, you can always send me your questions or comments about the podcast to my email address, just [email protected]. So thank you for listening everybody. I will see you again, same time, same place next week. Have a great week. 

Thank you for joining me for this week's episode of Point Me to First Class. If you want more tips on turning your expenses into travel, visit pointmetofirstclass.com to learn more. See you next week.