My passport is sitting in a drawer in my home office, cold, alone, and unused for almost a year. I have not been outside the confines of these United States since I spent New Year 2017 defining my tan lines in Havana. It’s not that I haven’t been anywhere since then. I’ve flown home to New York several times, jetted to L.A. to be the flower girl in my friend’s wedding, gave myself a spring break in D.C. to hang out at the Blacksonian for two days (Go there. Now!), and even took a few business trips below the Mason Dixon. But international travel, I have had none.
I save $150/month in a vacation sink fund in the hopes of building up enough money to go abroad once a year. When I found out I was going to be laid off, visions of Bali’s beaches danced in my head as I contemplated renting my condo and getting out of the country for a while. Alas, domestic travel has depleted my sink fund so stateside I must stay.
Yes, I know that there is a solution to this “problem,” and it is called travel hacking. Everybody. Is. Doing. It. I too could open new rewards credit cards for the points bonuses and spend pennies on the dollar to travel to my heart’s content. I have excellent credit so getting approved n’est pas de probleme. So why haven’t I done it yet? I want to. Believe me I do. We all know how I get at the prospect of getting something for next to nothing.
I also love earning points. I’m that friend who’s always saying, “Let’s just put it on my card and y’all can Venmo me your share.” Still, when it comes to opening multiple credit cards and having to spend thousands of dollars in a few months…
We’re Off To a Bad Start
It all started with a t-shirt in the beginning weeks of my freshman year of college. I can’t even remember why I wanted the flimsy screen print on a basic Hanes undershirt. Maybe I was avoiding laundry, which would be a probable explanation.
All it cost me was my name, address, and social security number on an application, thousands of dollars in interest, and a decades long battle with spending money before I get it.
Although my first American Express card sat unused in a drawer for months, eventually it became the devil on my shoulder, telling me that I could afford that orange hoodie with the three quarter length sleeves, the gray skirt with the thigh high slit, and the platform wedges too, even though my only income came from a $7.00/hour work study job at which I clocked five hours a week.
What started at 18 years old with a single account ended with a charged off Amex balance and four maxed out store cards by the time I was 22.
Still Not Doing It Right
With the fear of bankruptcy forever embedded in my soul, I dug myself out of collections and paid off all but one of my store cards. I knew my credit was improving when I started getting offers from Discover and Master Card. The Limited (RIP) even raised my limit all the way up to $1000. It was at this point that I felt confident enough to apply for a Capital One Visa. Because I had once been an authorized user on my mother’s account, the good folks at Capital One granted me a platinum card with a $200 limit.
I spent the next two years acquiring higher limits and a few new cards. However, unlike my college days I now used credit “responsibly,” which really meant that I no longer missed payments and didn’t max anything out. Sure, I carried balances at 19% interest, but the monthly payments weren’t a problem. I owned a house, had a couple thousand dollars in savings, and paid my bills on time, so you couldn’t tell me I wasn’t a money management beast.
In late 2005 my outlook on debt was forever influenced after a church sermon based on Dave Ramsey’s principles in Financial Peace. Up until that point it had never occurred to me that I did not have to have debt. When an idea resonates with me I can go from zero to sixty in no time, and so it was with this one. While paying off my mortgage and student loan seemed insurmountable, clearing the few thousand dollars off my credit cards seemed totally doable. I canceled my gym membership, cut back my cable package, and cut up my Visa Platinum and Macy’s cards in front of the entire congregation. Within five months the debt was gone and I started a cash only existence…For a little while at least.
Back and Forth
Since then I have cycled in and out of using credit. After a weeks’ long shopping binge in early 2006 culminated in opening another store card, I was convinced that credit cards weren’t nothing but the devil trying to knock me off my path.
I once again vowed to leave the plastic alone, and I did so for years…until around 2009 when rewards cards started coming in vogue. That Capital One card that I’d cut to pieces may have been dead, but the account attached to it was very much alive. The allure of rewards got the best of me and one day I called Capital One and converted my card to a Quicksilver. Free flights here I come!
It took a month of buying crap I did not need or want just to accumulate points, for it to register that at a 1.5% earn rate it would take $20,000 of spending just to get a $300 flight. I quickly realized that I was on a journey to nowhere and gave up the quest, but not before pushing my balance close to $2000.
With a windfall from the sale of my house in January 2010 I freed myself of credit card debt (all of my debt actually) and pledged to stay that way.
I did not care about rewards points. Credit cards were not for me. Even in grad school when traveling to Fiji, Telluride, Ghana, Ethiopia, Paris, Scotland, Sweden, Israel, and more I refused to break the glass on my still open (albeit once again dormant) Capital One account. If I could not afford it with savings and Stafford loans then it just wasn’t happening.
Coming to the end of my savings after graduating from business school and before landing a job drove me to once again call Capital One for a new card. After more than a decade of false starts had I finally mastered the rewards card?
While everyone says, “Just use the card for your everyday spending and then pay it off at the end of the month,” I couldn’t quite follow that advice. I used my debit card for everyday spending and the credit card for stuff I couldn’t afford right away and then carried a balance month to month. It wasn’t a large balance, but it generated enough interest to wipe out the $5-$10/month I’d earn in rewards.
It got worse in the weeks leading up to starting my first six-figure salary job and closing on my condo. That living room ain’t gonna furnish itself so obviously it needs Restoration Hardware everywhere!
I took my card to the brink of its limit, but paid it off the same billing cycle with my signing bonus. The combination of a zero balance, three figures worth of points, and a fatter paycheck swelled my confidence that I could finally play the credit card rewards game and win. I put every dime of spending on my Quicksilver card and paid the bill off in full at the end of the week. Seeing the points rack up as my balance stayed non existent had me feeling myself.
Well ego tripping only works for poetry, and it wasn’t long before my “everyday spending” started to include more home decor than my paychecks could cover in a month. Pretty soon the bonus checks I’d planned to use to knock out a large portion of my student loan were diverted to covering my five figure credit card bill, until even that wasn’t enough to keep me from once again carrying a balance.
For the fifty-leventh time I stopped using credit while I spent the better part of a year paying the debt. The points balance that had made me giddy months before just looked like a poor life decision as I paid ten times the rate in interest than I’d earned in rewards.
No sooner had I freed myself from Capital One than the mother of all rewards cards come to my attention, thanks to a GroupMe chat with my sorority sisters.
And to this card, I thee wed. It wasn’t the $300 travel credit or the 3% earn rate on the very liberally defined travel and dining categories. Nor was it the complimentary TSA pre-check or the Priority Pass membership. I was all about the 100,000 point sign up bonus and 1.5x redemption on Ultimate Rewards travel. Finally, a rewards card that could feasibly get me the one thing I’d always wanted: free travel; and all I had to do was spend $4000 in three months.
I got it done in six weeks and promptly used my points to get me to Cuba for New Year’s Eve. I’d love to say that after my trip I curbed my expenditures and settled into a more reasonable spending pattern.
Every month as my balance climbed higher I played tag with my purchases to keep the bill paid in full at the end of the billing cycle. What does that mean? Let’s say in December my credit card bill was $1500. Before the bill is due in January I’d simply charge another big ticket item that I do have the funds to cover immediately, pay it off before the previous bill’s due date and promise myself I’ll tighten my belt enough to cover December’s purchases in February, which would inevitable get pushed to March, then April, and so on.
Borrowing money on borrowed time has an expiration date and it was only a matter of time before I was raiding my savings to continue to make payments in full. I even took the interest hit for a couple of months when I couldn’t bear to touch my “emergency fund” one more time.
In October 2017 a miracle occurred. I paid off the monthly balance on both my Quicksilver and Sapphire Reserve with just the cash I’d earned that month. A month later the miraculous happened again. And just yesterday I sent a payment to Chase to clear my purchases for the week. Is it supernatural intervention? Nope. It’s just a budget. There’s nothing quite like getting laid off for making one stick.
What everyone forgets to mention when they say, “Just be sure to pay your bill in full every month,” is that you need to know how much you’re going to spend before swiping your card. It turns out that it’s actually very easy to manage credit when you’ve planned where the money is going ahead of time.
Although it looks like I’ve at long last reined in my spending, I am not rushing to fill out another credit card application. Sticking to a budget is still a recent habit for me. I’m worried that just like exercising and eating right, it’s a struggle getting on the wagon but super easy to fall off at the slightest jolt.
Spending on a deadline was a trigger for overspending with my Sapphire Reserve. Even when using a card for everyday purchases, the earn rates aren’t enough to amass significant rewards without spending tens of thousands of dollars, so the bonuses are where the real value is. I worry that the pressure to hit a target will have me once again deluding myself that I cannot get there on the strength of what I buy everyday.
I developed an aversion to paying credit card interest long before I actually stopped paying it, so I am not naive enough to think that knowing better automatically equates to doing better. Even though I have technically come out ahead with my Chase Sapphire earnings, I still lost because I spent way more than I ever would have if I was operating on an all cash basis. With no steady source of income for the foreseeable future I cannot afford to charge impulse purchases and figure it out later.
Really this is a matter of trust. Do I trust myself to choose a card that provides the rewards I need in a way that aligns with my budget? Do I believe that I will continue to stick to my budget? Do I have the patience to use the entire promotional period to earn those bonus points? I’d like to think that I do, but my track record when it comes to credit cards is less than stellar. Yeah, it’s been a long time since my days of missed payments and collection agencies, but that doesn’t mean I’ve been winning in the years following those follies.
I would love to be like the bloggers I see who are traveling the world in first class accommodations for less than the cost of a roundtrip flight between O’Hare and LaGuardia. I am so tempted to cancel my Sapphire Reserve and fire off an application for the Preferred and the 50,000 points that come with it, but something always holds me back. They say that the definition of insanity is doing the same thing over and over again and expecting a different result.
Am I alone? Is anyone else hesitant to jump on the travel hacking train? Is there hope for a recovering directionless spender? Hit the comments and share your thoughts.
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