Season 4, Episode 1: Travel Hacking with Credit Card Points

Lounge Rats, Hot Dogs, and Business Class Dreams

We’re back for season four, and ready to sneak into business class to live our best lives. Climb aboard!

Caitlin’s friend Katherine Fan is a credit card and loyalty programs expert who was The Points Guy's first senior travel reporter, and has covered credit cards for NerdWallet, Condé Nast Traveler, AFAR, and Business Insider. So, like, super profesh. She’s our guest to answer all of our questions about credit card points, travel hacking, and how she’s managed to see every continent (and by “see” she means get very close to) mostly on points. She just got her second passport, that’s how jet-set-y sophisticated she is. Now, she does also call herself a lounge rat, so there are some nuances here to dig into.

Listen for the discussion of how to convert your groceries into flights to Phoenix, stay for the repeated warnings to not get into this game if you might fudge it a bit on the want vs. need calculation for aspirational travel living. There is definitely some drama here. Like, did you know some of those fancy airport clubs stock their hot buffets with Sam’s Club hot dogs? (I think that’s what she said.)

Oh yeah - and the Eras Tour story! As usual, we have some advice for the “normal” people in how to start small and still feel like a travel hacking goddess.

Find Katherine on Instagram and subscribe to her Substack to catch all of her credit card tips and tricks so that you, too, can bask in the aquamarine waters of the Maldives, or just fly home to Guadalajara for your cousin’s high school graduation.

Ask us your dumb investing and finance questions, or just say hi! on our Ask Us page!

We have the social medias!! Here’s our Instagram and Facebook and LinkedIn.

This episode was edited by our co-producer Kelly West. Music by Bad Bad Hats and Devmo.

Transcripts for Season 4, Episode 1: Travel Hacking with Credit Card Points with Katherine Fan

Caitlin [00:00:06] Hello, friends, and welcome to Women on the Verge of a Financial Breakthrough, where we're figuring out finance one dumb question at a time. I'm the dummy, Caitlin Meredith, a coach and mediator based in the Bay Area.

Caitlin [00:00:21] And I'm Sara Glakas. I'm an investor, advisor, and founder of Blackburn Financial and the Austin Women's Investing Group, which can be found on Meetup and Facebook. Can you text this show to a friend? We want more money, friends. And if you leave us a review, not only does it help other women on the verge discover the show, it makes us feel like a secret admirer delivered a basket of breakfast tacos.

Caitlin [00:00:50] Sara, are you so excited for today?

Sara [00:00:52] I am really excited for today because I feel like in the first three seasons we got to talk about a lot of things that I knew a lot about and then this season there's a lot of stuff that I don't know anything about including what we're talking about today.

Caitlin [00:01:06] I love it when you don't know anything about something.

Sara [00:01:08] I do not like it. I'm feeling a little bit anxious, but hopefully I can hold my own or ask a couple questions.

Caitlin [00:01:15] Welcome to my chair Sara. Well, she's saying she doesn't know anything about this because our guest today is Katherine Fan. Katherine is somebody I went to journalism school along with our co-producer Kelly West and she is unlike Kelly and I, Katherine's an actual journalist now and she covers You tell what your cover?

Katherine [00:01:37] I currently cover credit cards as correspondent for Business Insider. So what that means is I talk about credit cards, they think about credit card all day, every day. I know their annual fees, I know the benefits, I now what's going to happen to you if your credit card gets cut up or thrown away or stolen, and I also know how to use the rewards from your credit cards to get you from point A to point B. So I've been fortunate to travel to. Every single continent, primarily on points. And I just got my second passport a couple of weeks ago. So thank you, credit cards and credit card points for getting me those things.

Caitlin [00:02:17] Earlier this year, and by that I mean last year, I got invited to a wedding in Rwanda and the first person I thought about contacting because it was a surprise trip was you because I was like Katherine could figure out how to get me there and she unlocked a world which I will call a world but is also like a rabbit hole of communities that are completely dedicated to like. Seeing the world purely based on credit card points like their flights, the hotels, the cars, the whatever, they are gaming this system. Is it called gaming? Gaming seems like cheating.

Katherine [00:02:59] Some people call it travel hacking. Some people call it gaming. I would say in the professional world, we just call it utilizing or maximizing.

Caitlin [00:03:09] Maximizing, leveraging the money you're already spending on things, looking for opportunities for which credit card is the best to spend on this because you get two times the amount of points for that transaction versus another one. So it's not for the unorganized. I will say that and it's for people who just want to use the same credit card and not ever think about it again. Like there's. The strategy has quite a few details that go with it, and it's kind of fun to learn, but what's really fun is the stories of people are like, I went to Bangladesh in business class, and I'm like, oh my God. The 101 of it. Do you have a like a spiel that you give for people that want to use their credit cards to fly for free?

Katherine [00:04:02] Yeah, the most important one to start with is don't get a credit card if you can't be responsible with it. It doesn't matter how great the rewards can possibly be. Debt, especially high interest debt on credit cards. Not worth it.

Sara [00:04:16] Yeah. Oh, that's a good first rule of using credit cards for points and travel hacks and things Yeah, I like that

Katherine [00:04:22] So I will feel like that was a disclaimer that people have been just saying for the last decade or two. But I've recently seen some articles where people are talking about how millennials and Gen Z in particular are really getting into a lot of credit card debt. And before we used to think of it as maybe something we would use for, you know, a splurge, like a sex in the city, oh, I bought some shoes or whatever. But Gen Z is really taking the aspirational points and child's life. To a whole nother degree. So, you know, they're just getting started in their careers a lot of the time, but they're already seeing all of these lifestyles on TikTok and Instagram that they wanna emulate. So I'm really gonna hone in on this one. Be sure you are being responsible with your money. Never charge more to your credit cards than you can pay off in full every month, except in rare circumstances, and we can talk about those later, but let's just pretend there was no disclaimer there. Don't charge more to your credit cards than you can pay off in full every month. No matter the bargains. No matter their bargains, think about it the same way you would think about any kind of spending. Is it a want or is it a need? Even if you think it's a once in a lifetime opportunity, most of the once in lifetime opportunities I've thought I've had in my life have come back up again in other ways.

Sara [00:05:42] That that's really important, Katherine, because now that you said that, I've had several people, whether it's in the Austin Women's Investing Group or clients, carrying high credit card balances, and the justification is points. And I think in my mind, not really being part of like the points world, I was like, are these points like so valuable that they are overriding the 24%. Annual interest rate on this card. It just wasn't really connecting in my head that that was the justification for running such a high balance was, well, at least I'm getting points. So I really appreciate you saying that right off the bat because I think that's probably a pretty easy trap to fall into. Super important, and absolutely not. Your points will never be.

Katherine [00:06:27] Worth more than the interest rate you're paying.

Caitlin [00:06:32] That is also interesting because as a divorce mediator and divorce coach, points often come up in divorces and it can be one of the hardest sticking points, like people will not budge. The lifestyle that they have dreamed of through the accumulation of the points that the couple has in common is like an asset to be divided and people are very upset. About losing the points and all of the possibilities. And again, I'm like, give me the money. I'll take the money, you take the points, but it's more than the points. It's like what they represent. And I think it's a combination of like getting away with something like this is it's like free money, you know, that we somehow got even though you paid a lot of money to earn those points. And also like, strategizing, like we did this in such a deliberate way. And if I don't get the rewards of that, like I don't want him to get it either. I've just have found that people can be more emotionally invested in their airline points than a retirement account. And it can't be an accident. Credit card companies, sorry, I know you probably won't be able to speak on this side, but it feels like they figured something out there to make these seem more valuable than the actual cash.

Katherine [00:07:59] Well, I think you don't even have to think about credit card companies. I think as human beings, we're perfectly capable of creating meaning of our own. As someone who has also been divorced, we didn't have enough points or money to really make a massive difference. But I can say that I think, you know, typically people who are fighting over points in a settlement like that, there's probably one person that did more of the earning and the other person who didn't. And so every person has a different idea of what that means. Because I would say any. Relationship where, you know, whether it's money or points that you're earning equally, if you earn somewhat equally or somewhat balanced, you both have your own idea of how you want to manage it, you probably also both have you own stashes. So again, not to go off on a huge tangent here, but again, the idea of what something is worth, very different from what it is actually worth, which does tie in with my job. I do, it is hard to say what points and miles are worth. Whether it's emotionally or tangibly. So one big aspect of my job is figuring out an approximate value for different types of points. So you can decide, is it better to pay in cash or to use points?

Sara [00:09:10] That was definitely going to be my main question of this whole thing is the exchange rate between points and dollars. Like how much is a point worth? Is that something like that we can delve into like right at the very beginning? Yeah, let me give a quick.

Katherine [00:09:27] Summary I will pretend people don't know anything about it and we'll kind of go from there but pretty much the way credit card points work when you spend money the credit card company makes a little bit of money off of the interchange fees and to incentivize you to swipe your card more they pay you a teeny tiny percentage of what they're making on those transactions and they gamified a little bit. So everybody now has credit card, it seems like. Fun fact, during the pandemic, we discovered that a lot of airlines, the whole airline itself, the planes, the business and all of that, some of them were worth approximately the same or even less than their loyalty program. So all of the points that went into their miles, because they're essentially treated like almost a form of credit in and themselves, a credit card company. Purchase a certain number of points from an airline in exchange for their customers to redeem at a later point, or the other way around, an airline can trade some miles in exchange for a business partnership or a relationship they want to build with a credit card issuer. So that's a very high-level picture of kind of where this made-up currency is coming from. And currency is actually a really good word to describe what these points are as well when talking about what is the value of a point to a dollar. Think about them from the analogy of money. A British pound is different from a US dollar, is different form a Japanese yen, but each of them has an approximate value that is somewhat pegged to the other one. Now it's easiest usually to use kind of a golden standard. We're fortunate in the US, we get to be the golden standard for a lot of other countries. But similarly with points, we kind of peg that to the US dollar here in the U.S. So most of the time when I'm thinking about what a point is worth. I'm looking at it relative to, is it worth one cent? Is it a little bit more than one cent, a little less than one set? And that comes down to how much value can I trade this particular point for? So to the point of what Caitlin and I discussed when she was trying to get to Rwanda, her parents had a huge stash of points, but it's not very useful because- Don't tell my brother. Yeah, that's okay. But no, they are super useful. They're just not useful for the specific route you want it. I know I couldn't use them. And that doesn't mean that they're not valuable. In fact, that is one of the airlines I fly the most when I find myself in a pinch needing to get somewhere. They do great in specific routes. And similarly, your money is going to go great in the US. But your US dollar may not be very useful, let's say, on the Great Wall of China. And so. You, as you're getting into the points and miles game, the most important thing to think about is how do these points, how do these rewards benefit your life? Not the other way around. American Express is really popular. It's known as kind of the high-end brand. Their points are very aspirational. They have fancy metal credit cards. However, I live in Austin. They're not necessarily the most useful for me here in Austin because we don't have Amic Centurion Lounge here in Austin. So that means I'm paying a lot of money for an airport lounge system that's very high end, it's very aspirational, but I can't go to it that often. So that's a good example offhand of a card that I wouldn't suggest someone get offhand unless they had many, many opportunities to use it throughout the year.

Caitlin [00:13:06] I'm so sorry, I know this is a tangent, but this is a lifestyle question. As someone who has only ever been to an airport club twice in my life, I always thought that you'd use it on a layover away from your home airport. Do people go to their own airports early to be able to use the luxurious clubs there? Oh yes, absolutely.

Katherine [00:13:28] Let me tell you this, actually, as someone who has danced in and out of the freelance world for many years, I spent a couple of years kind of, I would say almost like couch surfing, except I was kind of airport and travel surfing. I split my apartment with a good friend who was a digital nomad at the time. I was traveling for work about twice a month to Argentina. And so he would come in and stay in my place during the days I was gone. I would go to the airport, I would eat my meals in the airport. I would get on a flight. They would feed me on the plane. And so honestly, I was, I, I it was a little bit of a rat. I was just doing it in airport. Oh yes. So, you know, points and miles people are pretty intense and they do this. Such a well-fed rat though. Is the food good? It depends on the club. So if you do want to live the club rat life, you may need to start focusing on the ones that have really good food. I will not name the one I used to have a membership to, but it felt a whole lot like eating in Sam's club. Oh, it probably literally was eating in sam's club, I probably was eating cheese.

Caitlin [00:14:46] Okay, good note. Okay, learning. I already have learned so much here, okay, about what club aspirations to start working towards. Okay, including my home airport. So where I derailed you is that like some credit cards and loyalty programs are really good for some people, but even though they're amazing, they might not serve you if it's like the routes that you usually take or your home airport isn't included, blah, blah,blah. So that's the degree of research to see. Patterns are, what your dreams are, and which of the programs will match up with those.

Katherine [00:15:22] Yeah, I would say offhand, if you're just starting from scratch, the first thing to think about is where you spend the bulk of your money every month. I would say I actually recommend people to start with a no annual fee credit card because you can't really go wrong with it. You can't make a mistake with it in terms of saying, signing up for something you can pay for next year. So signing up for a no-annual-fee card, there are some really great ones out there right now. In fact, I use no annual fee cards for most of my purchases. The best cards will typically give you a little bit of cash back. It should be more than 1% or 1 cent per dollar you spend. And there are two main buckets of credit card rewards. There's some nuance to it, but we'll just go with two for right now. You can either earn cash back or you can earn travel rewards points. Now cash back, no annual fee cards. You kinda can't go wrong with those. My recommendation there is to get one that earns at least one and a half cents per dollar you spend, put everything on it, groceries, daycare, gas, whatever else, get comfortable with that, build up really healthy habits from there, and consider moving on to other things.

Caitlin [00:16:39] I had a cash back card and I really felt like free money every month and then I felt like oh man I could be getting miles, that could be airline tickets. Are they really the same thing or is this so case by case that it's hard to even say?

Katherine [00:16:58] It's a complicated world because now there are hybrids. There are cards that earn cash back. But if you pair them with another card, you can transfer those points over to your travel rewards card and then use those points for travel. But what does that mean, pair it with another car? Here's a great example. One of the best known credit cards is a Chase Freedom. Chase Freedom FLEX, Chase Freedom Unlimited. There's a basic Chase Freedom card. They're no annual fee cards. They earn. You know, either 1.5% cash back on every dollar you spend, or they have different bonus categories like dining or groceries. And if you use a Chase Card, a Chase Freedom Card, and you also happen to get the Chase Sapphire Preferred Card that you've probably heard of or seen when your friends go out to eat, the Chase sapphire preferred card is a travel rewards card. But because are both issued by Chase and they both earn Chase. Ultimate rewards points, you can transfer points from your Chase Freedom card over to your Chase Sapphire Preferred card, and then the points you earned on restaurants, you can now spend for.

Sara [00:18:10] Okay, so when you're pairing the cards, you're pairing them from the same, the bank that's issuing them. So chase to chase or AMEX to AMEX, not chase to AMEx.

Katherine [00:18:21] Also, just because a card is issued by MX does not mean that the points can be transferred between each other. They have to be in the same family. So all of those cards I mentioned just now earn Chase Ultimate Rewards, but Chase also issues the Southwest credit cards. Now those, you cannot transfer your points from the Chase Freedom over to your Chase Southwest card. There's a lot of nuance to that and that's why I have a job. I'm very grateful. But just for a quick answer for you. What you mentioned there, Caitlin, even, I would caution people to be aware of when you're like, oh, but I could be earning miles instead. That doesn't necessarily mean anything because the value of a mile, super flexible, just like the value a dollar, value of yen, you may not know what a yen is worth. So when you hear that, you know, you could be making 5 million yen per year. It sounds like a lot, but that doesn't mean anything unless you know what the yen is relative to a dollar.

Caitlin [00:19:19] Yes, and unlike currency, the airlines can just one day be like, Oh, now a flight to Europe is actually requires 70,000 miles instead of 30,000 or something like that. And then you're like,.

Katherine [00:19:33] Oh, you sound like some who's been burnt before.

Caitlin [00:19:37] Asking for a friend. Well I will tell you I just got round two round-trip tickets to Europe for the summer on points but I had to it was like jump roping waiting to get in because by now they're all at the high it takes 72,000 on United to get in but I know they have a 40,000 fair but I have to wait till I see it. So you have to check all the time. So if what we're supposed to think on this podcast is our time is actually worth money. If you calculate the time that I check on these sites, I am getting paid a very, very low wage to do it. But I did I was successful. So it feels worth

Katherine [00:20:25] Um, I don't, don't forget that sometimes chasing your addictions is a hobby too. So that's how I justify it. Time I enjoy wasting is not wasted time. That's what I say when I'm digging through the thrift store as well. So just so you all know out there, there's a certain type of grubby rat-like personality that really likes it. I'm not speaking of anyone else. I am speaking of myself. But it's like thrifting also, you kind of have to enjoy the chase. If you don't, yeah, there's also options there just like you can go shop from a consignment store. There are people who will help you figure out how to book that trip you want without forcing you to check all the time. They're really good at it. They love doing it. You pay them some money or some points or some cookies and go from there. But yeah, like there are ways around all of that. Everyone's figured out side hustles around it. But again, the most important thing with credit cards. Stay within your means. Also find a card and an ecosystem of rewards that you enjoy. Like if you only ever fly with one airline, don't bother thinking about all the other possibilities. Like if, you know, you like beach vacations, why waste your time going to other things? And maybe this is just me getting older, but figuring out who you are and what you enjoy the most is a very helpful way to approach this process and everything else in life. Similarly... If you know you're going to be stressing about getting the full value of every single one of your benefits or something like that, there's a lot of merit to getting a credit card that will be really easy on you. Again, like I said, no annual fees, so you don't have to worry about whether or not you got $695 worth of value this year. You can get one that doesn't offer the highest rewards, but offers a nice consistent value so you're not always like, oh man, should I be using this card for gas and this card for groceries? Just use the same card for everything, and then you know you won't forget payments. You know you want mess up or leave one at home or something like that. You won't always be chasing that feeling that you forgot something or you lost something.

Caitlin [00:22:30] I notice in these online communities that you have introduced me to that people systems like they have labels on each credit card, like use this one for gas, this one, for restaurants, use this, one for target, like, and they're trying to manage spouses or partners that have the same credit cards. And there's a lot can be some tension around they got gas and they didn't use the right credit card and that people that are prone to this kind of thing with all their spreadsheets and all that. Can really get lost in it. And for others, it can be a huge source of stress. So I think you're right in like kind of gaging, will this be fun? Or is it going to like rule your life in ways that just amp up anxiety and like FOMO.

Katherine [00:23:18] And relationship tensions. Although I will say, as someone who also has a business as a divorce mediator and coach, that might not be a bad place for you to get extra business. We're just joking. We do not advocate for the dissolution of relationships here, but if it was gonna happen anyway.

Caitlin [00:23:36] If they're not using the right credit card. Yes.

Caitlin [00:23:40] Yeah, no wonder you talk to so many people who are worried about about points, I get it now, full circle. It does become, I think, emblematic of things or, and what I was gonna say, sorry if this is irrelevant, but in couples, like where there's a breadwinner and then the other person is like, let's use this card. So they do all the research, they figure it out. This is how we're gonna, it's just sort of compensate for them not bringing in money, but figuring out how to leverage the money that's like coming in and getting spent. They also don't want to lose those miles because they're like, I'm the one, we wouldn't even have them if it wasn't for me. But the other person now has a taste for like, Oh, sweet. It's all free. But they don't know how.

Katherine [00:24:27] I think it's a lot like, you know, day trading, just because you've been in proximity to the outcome of successful day trading doesn't mean that you're going to be able to replicate it for yourself.

Caitlin [00:24:37] Now we have to do another disclaimer. Sara, day trading.

Sara [00:24:44] No. Everyone knows what day trading is.

Katherine [00:24:46] No, I don't advocate for that either in points or in ca-

Sara [00:24:52] I mean, can we go back to something that that you guys are both talking about that, again, is kind of where I'm I think I'm missing some information. So Caitlin gave the example of wanting a round trip flight to from Europe and knowing there's a 72,000 point price and a 40,000 point price. Is the dollar... Price of those tickets also fluctuating that much? Like at the same time, the point price is? That sounds like almost half price. So is it the same thing as waiting for a half price ticket or are those points and dollar prices, are they related or not related? Does that question make sense? It does make sense.

Katherine [00:25:40] And the answer for you is it's complicated. So think about every system being very similar to trying to shop for a flight. There might be 10 flights I can get you from Austin to New York, but they're all across seven different airlines and they're not obligated to all charge the same rate because they have different reasons for why they might want to charge whatever. One airline might be trying to get a plane from here to there. So any extra money they can pick up along the way from transporting it. Good for them. Another one. Would have to go out of their way in order to bring that flight down and then bring it back. So they're like, this is the dollar amount we need to charge in order get our money's worth, we don't care what everybody else is pegging it at. Same goes for these points. When you only use United, for example, as the airline you wanna get to Europe with, they have all the control because they get to say, nah, Caitlin wants to go when everyone else wants to, and we're gonna charge her double. But if you earn points that have some flexibility, for instance, those Amex points, those chase points, that you can transfer to different airlines based on which everyone gives you the best deal, then you get a little bit of that control back. So similarly, if you're looking at Google Flights and looking for a cash flight, you could say, you know what, I normally like to fly Delta, but Southwest is half as much this week, so I'm going to fly Southwest. That's the same sort of thing you do when you diversify your points.

Caitlin [00:27:02] And I would say that the points that I was trying to use, and ultimately did, were for United. And the way that I have understood it, though this is just maybe as Brene Brown says, a story I tell in my head, is they have like a certain number of slots per flight that they're gonna give at the cheapest point rate. And if people use those, that's it. They can claim, oh, a flight to Europe, it could be 40,000 points, you could fly to Europe. They only have to sell one seat at that 40,00 rate. And that if someone changes, because once you book on points, in my experience, you can change it without penalty, they're shifting all the time. So I think when I'm able to get them after they weren't available, someone who got that slot changed their flights so that cheapie spot became available to me. Catherine, is this just a story I've made up? It depends, very much depends on whichever airline.

Katherine [00:27:56] But yeah, more or less, that's kind of how it works. That's also kind of how it worked on the cash side as well. So sometimes if you're seeing like, well, many airlines actually, if you see a flight going for $300 and everyone's like, oh my God, this is such a good deal. And then two seconds later, they're like, they're all gone. That was a hoax. And that's not necessarily a houx. It just means that everyone got the discounted one.

Caitlin [00:28:19] Sara, what was your other question? Because I have another one for her, but I know. Oh, I have so many.

Sara [00:28:26] Maybe maybe this is similar maybe it's a little bit different but how do you decide when to redeem points or miles do you have like do you think people should hoard them for like a big trip even if that trip is a long way away or i mean there are effects of inflation here that are sometimes at play is it better to redeem them as fast as you can and use them up? Are there different like schools of thought or is there a best way to do it? Yes, that is a great question.

Katherine [00:28:59] Super intuitive. And yes, the answer I would say is that as a general rule, earn and burn is a common phrase you'll see in those online communities that are really intense, and they primarily apply to points you earn with a specific hotel chain or an airline. So for instance, like Caitlin mentioned, Southwest can change how much it charges for flights, and so can United. They can even change how a point is valued on their airlines. And as a general rule, that number tends to go down for consumers. So if you have a stash of Southwest points or a stache of United points or Marriott points, the general suggestion is, yeah, try to spend them as quickly as you earn them. And again, this is a good reason to not go into debt for a large number of points or out of some. Aspirational trip you don't even have planned yet, because you might be thinking, oh, if I could just get to a million points, I'm going to be so rich. And then if something happens in the meantime, and those points are suddenly worth what 250,000 points used to be worth, then all of that hard work will have been for nothing. There's one small exception when it comes to maybe holding onto your points for a little longer, and that's when you're earning points from an issuer, again, like Chase, like Amex. But also Citi, Capital One, Wells Fargo, because these companies are now creating this points system of their own where they set the value. They say, you know, if you earn X amount on this card, we'll give you this many points. You can pull points from this card over to this card. So they're trying to get you, they're really trying to getting sucked in, but they are bringing you into a space where then they have some control over what those points are worth. And because they want to nurture that relationship and get you as invested as possible, they tend to be a little bit more static because those points will always be worth X, Y, Z. So let's look at my chase points for instance. I am a chase girlie through and through. That was my first and oldest account that I manage. And they're very flexible in the US because the two biggest airlines that everyone flies through the chase system are Southwest and United. A chase point is worth one point across the board, whether I transfer it to Marriott, to Southwest, to United, or to more than a dozen other airlines and hotels, but they're super flexible because again, like cash, if I want to book a United flight, I can do that. If I wanna book a Southwest flight, I can't do that, but if I only earned points with either United or Southwest, I can take advantage of that good Southwest deal we talked about just now. I'm stuck with United or else I have to pay cash. So. Coming back to your original question, you can do a little bit better to sit on points from these banks instead of from the airlines or hotels themselves. That's not to say they're more stable, but they're a little more stable than just a single company. Think about it a little like index funds. Like if your index funds go up, everything's going up together, but if you're just invested in a single stock, then it goes up or down. You have money or you don't have money. Awesome. Thank you.

Caitlin [00:32:23] Right, Caitlin. Is it my turn yet?

Sara [00:32:25] It's your turn.

Caitlin [00:32:27] What if, asking for a friend, you ended up signing up for three cards that a crew points for specific airlines, and they have an annual fee, and then you also hear, then somebody tells you to get a specific chase card that is better than the ones that you already have. So you open that one in September. And now. You don't want those other ones anymore but you've also been told even though you have a financial podcast you can't remember if it's true or not that if you shut down a credit card it affects your credit score like how do you then close a car can once you sign up for one are you stuck there for the rest of your life what's the best way to close a credit or to stop paying the annual fee if you're not like. What do I do with my Southwest and my United cards now? Oh, well, you know, you've got some.

Katherine [00:33:29] Pretty good options there actually, because I have been in that exact same boat. Since we're talking about friends, I'm assuming you are your own friend, and I literally have all of those same cards and the person who told you to open that card was probably me. Well, I have good news for you for your United card. You can downgrade it instead of canceling it. So you remember how we talked about those no annual fee cards. That's what I did with my own United card, there is a card called the United Gateway card. It is a no annual fee card. You pretty much don't earn anything on it. You don't get any special benefits like a checked bag, but it doesn't cost anything. So that way you can keep your credit line open still. And I've had that one for, since the mid 2010s. So it's, you know, one of my older accounts and you're right, if I were to cancel it, it would impact my credit somewhat. I can do it, no problem. But I don't hate the card. I just don't use it as much anymore. So one thing you can do is to keep it. Again, caveat. Don't keep open cards if you're prone to losing them. Thinking, oh, well, I can just spend on it and I don't have to deal with that until 30 days from now. If you're proud of that mindset, you gotta do the thing where you cut them up, throw them away, cancel them, whatever it is. But if you only doing it because you don't use it any longer, you can always look into seeing whether or not you can downgrade the card. You can typically Google it, you can call customer service and ask them. You won't always be able to downgrade to a card that doesn't have an annual fee. So for your Southwest card, the lowest one you can get has a $69 annual fee. However, you typically will get some kind of concession from the credit card company in exchange for you paying that fee every year. So for instance, for your southwest card, you probably get a stash of points every year when you renew and that annual fee hits again. So check your account, see if that's worth it to you. But if it's not, sometimes you can also ask for a retention offer. So Chase doesn't really do them as much as say, Amex does. AmeX does offer retention offers, which happens when I call in and say something like, I'm not using this card enough. I'm thinking about canceling it. Is there any offer you can give me that would incentivize me to keep it for another 12 months? So sometimes you'll get an okay one. It'll be a handful of points for a certain amount of spend. Sometimes it'll be really nice, generous one. It depends on your account, how they value you, where they are in there. Revenue cycle and all of that, but it is better than absolutely nothing. So always check, always call, and also go into it with a plan. Know kind of what you wanna get out of it. Know that if you don't get the outcome you want, are you going to downgrade it or are you gonna cancel it? So go in knowing what it is that you wanna ask for. Let's just get a negotiation in general, but do your research beforehand so you know what they might offer. And then you'll know if you could say something like, well, that doesn't sound great. Can you do this? And they might. Wow.

Caitlin [00:36:22] Okay, I have another one. Sara, are you okay with that? Keep going. Keep going, yeah. I hear in these communities that people are using the points for hotels. And every time I'm like, why would you use airline points on hotels? It seems like such a waste. But hotels are really expensive too. I just have in my mind that like, no, I wanna fly far, far away. And like, what a waste to use it on a Marriott. But, and I'm not a business traveler, like I don't have any loyalty with a specific hotel. Is that an invention of mine that it's like poorer use of your mileage points to use on hotels than flights? Or it depends.

Katherine [00:37:05] That's cause you and I travel and like, Caitlin, we've been a lot of places in this world and we've done a lot middle seat economy. We talked about this. I would say I am realizing as I get older why it is nice to be comfortable when I get somewhere or on the way to getting there. The hostel. The hostel, yeah. Honestly, that word came to mind when you were talking about why would people spend? Cause here's the admission. I never tell normal people, especially people I work with, I still stay in hostels all the time, especially if I'm going somewhere. Don't care and I just need a safe place and I don't want to sleep in the car, I'll stay in a hostel because it's usually way cheaper. And you meet people and it's funny. I meet people and there are some reasons why also I've decided I like them, which is I do enjoy earning loyalty points. So I usually will book through hotels.com as well and I get a little bit of something from that. But that's me as primarily a budget traveler and a lot of the people in the points and miles world really love their luxury. So they just have different priorities. But you can still get really good deals even for non aspirational, you know, we're not talking five star luxury. You can still book hostels on points and miles as long as they're in the travel portal or something like that. So it's all a matter of personal preference. And I think in these communities, it's a little bit skewed toward you know people love these fancy redemption. So we see a lot about them. There are people out there who are talking about points and miles on a budget. I'm one of them, kind of. It's just not as fun to hear me talk about it. You know what I mean? Cause like there's budgeting people and then there's like go all out people, right? Just talk about money, talk about points. It's all the same. So there are plenty of people who do points and miles on a budget. A lot of them actually are families. So, you know, now that you have a daughter, you understand you could choose to fly alone and spend all your points or you could take her with you. So a lot of the people who are enjoying points but still staying in more economical properties are looking for, a lot of times, hotel status is the big leveler. So you can often get those from credit cards as well. For instance, the Marriott Bonvoy Brilliant is a high-end cart, has a very high annual fee, but it comes with really good Marriot status. Same for this. What's Marriots status? So sad, it's just like with airline status, you get upgrades, you get extra points, you get all these nice, fancy little treats along the way. The Hilton Aspire credit card, for instance, very high annual fee as well, but you get Hilton's highest tier of elite status, which, you know, if you're staying somewhere nice, can get you free breakfast for two, or room upgrades, you get early check-in, late check-out. Those are all super valuable, especially if you have young kids or like my mom has taken to doing road trips lately, I like to get her in a hotel room by three o'clock. So she's not driving late into the dark. And sometimes she can sleep in a little bit. So those are all perks that, you know, normally you're probably paying 35 to $70 for a late checkout or an early check-in. Those are all ways that credit card benefits can get you that little extra boost. So even if you don't want to pay, you know, 50,000 points for a hotel room, you can stay somewhere else. But still have status with that company and they might give you free continental breakfast in the morning and it feels nice.

Sara [00:40:35] I feel like this is a point that I want you to elaborate on because something just stuck with me here, right? Like you get points and miles for spending on the card. So if you are a frugal person who doesn't have a lot of expenditures, you're not going to accumulate the miles or the points that are often touted as look at this, look what I received from these points, is that right? I think I'm coming back to this story when I was in college, there was this guy, he was a business owner, and he, you know, got this really fancy hotel room, and he's like, oh yeah, like I just started putting all of my business expenses on my credit card, and so like, we had to buy a bulldozer, so I just put it on my card. And I was like, wait, that's like $250,000, like. Swiped on your card. So is that right? That like the level of your spend is going to dictate what you should expect from kind of this experience or this optimizing?

Katherine [00:41:41] Points and miles. Yes. And at the same time, there are plenty of ways kind of around that, that dude, this is a whole world. It's just like any other kind of money, right? You know how some people are all about, you know, retiring early on a budget and I'm a school teacher and I never made more than 50,000 a year, how I'm retiring at 35. Same with points and miles people. You definitely have the people who, you, know, spend a million dollars a year and just kind of your average Joe down the road. But because they had that small business, they're getting a ton of points. However, there are lots and lots of ways you can earn points sometimes even without having a credit card. One of my absolute favorite underrated hacks is shopping portals. So we all know kind of how affiliate shopping works probably or affiliate links. If I'm an advertiser and I wanna get X number of people coming through, so Rakuten actually is probably a name a lot of people have heard of. Rakuten is one of the best known shopping portals. When you buy, let's say, clothes for your kid at Old Navy, you could walk into the store and buy it and you'll just get whatever points you get on your card or you swipe your debit card and you get no points. Or you can buy from Old Navy online and click through Rakuten to get to the oldnavy.com link. Now, when you do that, if Rakuten has a deal that day where Old Navy's paying them, who knows, 8%, 10% of the total amount you spend. Rakuten might split 50% of that with you. So you'll see a sign that says 5% cash back on Old Navy. So when you go through Rakuten and buy the exact same thing from Old Navy that you're gonna buy in the store anyway, you can earn 5% back in the form of cash back. Some of these, most airlines and hotels actually have their own affiliate shopping portals. So you could earn miles for Southwest or United when you shop through their portals, or again, for the exact same thing you're gonna buy anyway. So this is one of my favorite tricks to share with people because I actually was making, ooh, I was a baby of the first recession. I graduated in 2008 and nobody was hiring journalists at the time and definitely not for real money. So I was making $28,000 in my first job, feeling pretty good about it actually. But most of the points I earned at that time, I earned by shopping through shopping portals. So everything I needed to get on a daily basis. Again, I think Old Navy came up because I used to shop at Old Navy quite a bit, but that was a really good source of these points and miles. So just because you might be very frugal or you may be early in your career, you may work in a nonprofit, that doesn't mean you can't travel on points and mile. In fact, there is a whole community of people out there who are all about learning how to use points and Miles, how to earn them, accumulate them, spend them. On a tight budget, you'll see a ton of single moms, you'll a ton young teachers, retirees, people who are disabled, people of all spectrums of life, not just the fancy ones with all the business spend or who make seven figures a year in salary. All kinds of people are getting.

Katherine [00:44:57] The points of my own space.

Sara [00:44:58] That's really cool.

Caitlin [00:44:59] The shopping portals make me nervous because the usually the only time I'm remembering them is when I'm realizing like oh if I got 200 or like 2500 more points I could do the trip to Europe and then I start like browsing in the shopping portal and I'm like never heard of this company oh those are that's an interesting bag. It's definitely not the need, it's like, how can I? Earn these points to go where I want to go, which I recognize we've already said the disclaimer. Don't think like that, but they are tempting.

Katherine [00:45:35] I was going to say Caitlin. Do we need to do a little bit of therapy here for you?

Caitlin [00:45:39] I already told you, we've tried already.

Katherine [00:45:42] No, I will say this too. I do think people who are like us, who have spent a lot of our lives in different places are extra drawn to points and miles in a way because we're usually living our lives with part of ourselves somewhere else. Like for many, many years, my parents lived on a different continent and 12 time zones away from me. So I missed them a lot. And I was always thinking in terms of like, the way people think about driving home for the holidays is how I think about flying to Taiwan for the holiday. And so I think there is something I have a really soft spot actually in my heart for people who are third culture people, fellow first and second generation immigrants, people who have spent a lot of time as expats because usually people think of travel as being something you do either for work or for fun. There's a huge third category that is, I call it traveling for my heart, but it is traveling to see the people that I care the most about. When I was a kid, I don't really remember my family going on vacations per se because we were always traveling. We were saving for once every two years, we'd go back to Taiwan and see my grandparents, my uncles and my cousins and my aunts over there. And so there's this huge pool to go back, not necessarily even to see the same new places, but to see same places, to see people that you care the most about. And I have a really big soft spot in my heart. For helping those types of people be able to travel. Because I think, you know, at the end of the day, it's amazing if you get to see an incredible sunset over the Maldives or something like that. But there's absolutely nothing like showing up for the people you care about, like your friends in Rwanda for their wedding. And so, yeah, I think we're definitely not gonna shame you for wanting to do that and wanting to go to all these places. And I would say that desire was probably there to begin with. Points and miles are just another avenue to help people like us be able to accomplish the things that otherwise only feel like a pipe dream.

Caitlin [00:47:41] And I have been amazed by people's creativity now that you've introduced me to this group of like figuring out how can I get points and miles from the things I'm already spending money on. So looking at childcare options, like it's just one of the things you take into consideration then, wow, that's preschool is super expensive, we love it. Do they take credit cards? Okay, that's an added advantage. So it's not necessarily money you wouldn't normally spend, but like another aspect. People doing work on their house, which contractor accepts a credit card and which doesn't? If it costs you 3% extra, would you pay the 3% to use a credit? Would that translate to a better benefit for you than the cash? And so I admire people's creativity in this space who are trying to make it work. And. There's a lot of bonding that goes on by like the the great deals and like you'll never I got a cash card at staples And there was a 50 by 50 dollars of gift card get another one free I don't know what all the deals are and people just feel very victorious off of getting these wins

Katherine [00:48:53] I sometimes joke that we are the extreme group hunters in our little demographic because it's true. You know, sometimes when you happen to catch a clip from one of those shows and they have that weird gleam in their eyes, I'm like, I can't judge them. That is absolutely disgusting.

Caitlin [00:49:09] Yeah.

Katherine [00:49:14] Well, actually, let me talk about, to your point about creativity, one of the aspects of credit cards that's been really interesting to see in the last few years has been credit cards are coming out now for helping you pay rent and for helping pay mortgage. And as financially savvy people, you know that historically the reason you cannot pay for these things with a credit card is because you're typically paying for something on a line of credit. But these days we've kind of evolve some of our relationships with how credit cards work. A lot of people in this generation actually, myself included, are way better with credit cards than they are with cash. Like you give me $50 in cash, I spend it very quickly. I give it away, I tip, I do these different things with it because it doesn't register in my mind. I don't have a record of it. But my credit card, I check it pretty constantly. And so since we have this different relationship with it now, there are a few cards that have come out in recent years that allow you to pay rent. So the built credit card is one of the best known and you'll see it pretty much everywhere in apartment complexes, in places like New York and San Francisco, the big cities. But I have one and I don't even rent. So it has a lot of benefits to it. One of the reasons why it's really appealing, their tagline is kind of, you know, we're helping you earn rewards on the biggest expense in your budget, because typically housing is the largest expense for most people's budgets, whether you own or rent. And there are other companies, everyone's trying to figure out how to break into that mortgage space as well, because they've probably seen all those people out there charging an extra 3% for the $50,000 contractor renovation that they have to pay in one fell swoop. I've done definitely not the 50,000 level, but I've definitely done a couple of renovations myself. And the only thing that soothed my five-figure budget hit was

Katherine [00:51:08] I don't think I'll do it.

Caitlin [00:51:11] Um, where do you tell people to get good information about like, today, if someone wants to like, okay, I want to learn about it, or I want to compare cards. Are you writing those articles that we can point them to? I know like nerd wallet has done some comparisons I've seen before. I don't know if they're your competitors, and we can just cut that out if they are. I'm curious where you, like people that want to dip their toe in this and get started, where the usual routes you suggest they find good information.

Katherine [00:51:46] Pretty much all of the points and miles sites and financial sites now cover credit cards. Obviously, I'm going to put a plug for Business Insider because I work there and I write them. But it's not just me. I have a huge team of great freelancers and experts in this space who we discuss these ideas, what we think something is worth. We typically will value points from different systems. Not too differently from each other, kind of all within the same general ballpark. So you could typically safely trust outlets that, if you consistently see chase points rated around 1.8 to 2 cents apiece, that probably sounds about right. If you see someplace that values, you know, merit points at like 5 cents apce, that's a little high. That's probably not something that you should take into consideration. Business Insider is where I work now. I used to write for The Points Guy, I used write for NerdWallet. I know each of the people on those teams are very conscientious and very hardworking in terms of establishing what those points are worth. But I would say more than anything, understand your own profile, your own financial needs, your wants, your lifestyle before you go into any of this because it's a little bit like moving into a new home. You might have an idea of what you think you like style-wise, but close your eyes and think about what matters to you before you get on Pinterest or Instagram and look at all the beautiful feeds, because this gorgeous chandelier may be amazing, but it doesn't look great with your eight-foot ceiling. So similarly, as you said, these magical overwater villas off of some aspirational beach may look fantastic, but maybe you would rather take your daughter and go backpacking somewhere for two weeks. So you want points that will get you that. Not necessarily a single night where you don't even have status so then you check in at 4 p.m.

Caitlin [00:53:49] Like that rip.

Caitlin [00:53:52] I think about that when the people are in like their lay flat suites on an airplane as someone who flew back and forth to Africa several times a year and was in the middle of economy every single one of those trips I think like but then I think okay if I could get one of those tickets for that seven minutes in heaven.

Katherine [00:54:14] For that one night over there. That'd be more like seven.

Caitlin [00:54:18] The older I get the more I'm like worth it but versus like an extra three flights to Europe like there's that is mind-boggling. So I think also evaluating like in my life that for some people they could do a business flight twice a year because they're gonna have that spend they have the income to justify all that and for other people that could be the trade-off is real of going for that like. High amazing luxury versus getting three back in economy and being able to go more places and just having to level set.

Katherine [00:54:57] And here's kind of where my idea of traveling for the heart kicks in again, because I think whenever there's not an obligation necessarily, but a stronger pool than just a desire for a vacation or a cushy business trip kicks in, you know you're going to have to go back and forth to and from Africa several times a year. It's not going to be sustainable if you did that in business every time. But now that you're not going as much, right? Now is kind of where that trade-off kicks in sometimes for me. I am saying this to justify my somewhat recent habit of I have been to Taiwan three times in the last 13 months, and I finally started treating myself to business class because I actually ended a lot of points during the pandemic because I couldn't go anywhere. But I've had to go back for family reasons, for personal reasons. And I was like, you know what, I got to come back. I have to do a good job at my job when I get back. I have be on when I got there. I'm going to start treating myself better and not force myself to endure. It turns out I really hate jet lag. I am really sensitive. It's awful and it gets worse and worse. It's not as bad when you are decently well rested. I have discovered. And so I have been holding off until this point because I know it is such a slippery slope and how am I ever going to go back to middle seat economy? But now I am thinking more and recognizing more that it is really worthwhile to take good care of yourself. You can always earn more points if you ruin the disks in your spine.

Caitlin [00:56:33] My daughter in the back and I go to business.

Katherine [00:56:37] I also think there's not something bad to be said for, like, not taking your kid, too. It depends. Like, sometimes you've got to take care of yourself, and I think for those of us who are super used to prioritizing everyone else around us, your kid might also enjoy staying with their friend for a few days and having that routine. The people we have become as adults are not necessarily who we were as kids, and Sometimes I have seen people talk about how, hey, you know what? I tried to give my kid this amazing experience and all he wanted to do was go to Disney World like his regular friends. And so I think there's something to be said in the points of mile space for not necessarily feeling like you have to take your child everywhere. You are allowed to do this just for you two. And especially, it's hard. It is hard to be a parent and it is hard be a parents with jet lag and it's is hard when the child has jet lag because I used to be that child. My mom took four of us to Taiwan every two years by herself. Because my dad was working. And now I think back, I'm like, oh, you saint, how did you not throw me off?

Caitlin [00:57:37] Yeah, because you can't recover from jet lag until the kid does. Because it's not where you'll be woken up no matter what if anyway, good point. Also the child will probably get sick.

Katherine [00:57:51] Apparently that's what we did.

Katherine [00:57:56] Say this as I am sick now Here doing beautifully, um, okay.

Caitlin [00:58:02] Wait, I think I have what was my other question for you about this back and forth. Oh I know what I want you to tell the story of going to see Taylor Swift.

Katherine [00:58:13] This is kind of silly. I was just sitting by myself on I think July 4th proper and I happen to think huh Well, I know that some of the Amsterdam shows have some of The cheapest tickets so far because I'm kind of opposed to paying crazy money, especially in cash for a concert ticket So I was like, oh, let's just see what they look like this week. And I don't remember quite what it was It's probably in the low 300s I was I okay. There is a direct flight from Austin to Amsterdam if I leave right now I can go home, stick some clothes in a backpack and try to make it to the airport before final call. So I booked a ticket for Amsterdam 90 minutes before it was due to take off and I wasn't even home. So I will say that is a record even by my own standards. And because it was the 4th of July, I have my favorite parking space near the airport, fully booked. So I ended up parking at the Hilton by the airport and then running the final half a mile or so in July, Texas heat. July. I know it was bad. I finally finally flagged down some Uber driver who took pity on me and I was like can I give you 10 bucks to you? I think he thought I must be in an emergency. So he was like no no honey it's okay. I still give it to him. But I was a charity case and I managed to make it. They were delayed by about 15 minutes. Perfect. Worked out great. I was not in business class. I was definitely in economy. There were so many children. I I forgot how much children travel in the summertime. And so it was a very unrestful flight over to Amsterdam, but I have a lot of Marriott points. I booked myself a Marriot night and because I have status, I was able to check in early and I was about to check out late, so I did manage to sleep off some of my jet lag. I made it to the concert. I think I left a little bit beforehand so I wouldn't get cut in the crush, but I just took the train back to my hotel, which was right by connected to the airport, had a great night's sleep, wandered around a little and flew back. That was my 4th of July weekend. That's so lovely. I was on the edge of my seat. That's nice. I barely made it the edge my seat! Did you like the concert? I did. I really enjoyed it. It was very fun to- I think it was really fun for me as like not a diehard Swiftie to get to be a part of that energy. Yeah. It was just so fun. I think one of the reasons I really wanted to go to another country as well is because I love seeing those international crowds come together. And as someone who really doesn't know most of the songs or the lyrics, I love seeing everyone, all these different languages, backgrounds, everything, getting all dressed up, getting a little excited. It's pretty fun. Aw, that's cute.

Caitlin [01:00:53] I love it. Katherine, thank you so much. You made it like the least intense possible for a world that I have come to know as a very intense one. Well, thank.

Katherine [01:01:03] I will say I'm a very sentimental person so I will say this too about points and miles. I think to your point earlier about how points and Miles are, you know often the breadwinner makes the money but the partner is the one who figures out how to do the travel. I think as women money is historically an aspect of life we've been borrowed from for most of history and it is so cool to see people. Investing their own money, purchasing their own real estate, and all of these different things. And I think Points and Miles is just another space where we're seeing women really come into their own, create something of it. I used to see a lot more men sitting in first class. Pretty good airline status, so I got upgraded a lot. But it was almost always all middle-aged white men. And there are more and more women, people of different races, different ages, different backgrounds sitting there as well. And a lot of that is due to points, and a lot that is also due to really cool business success. So that's something I would love to keep seeing in this area, whether we're all sitting in middle seat in economy, or sitting in first class. I hope that more and more of us are sitting in middle seat economy by choice because we want to sit with the people we love and not because that's what we got stuck with.

Caitlin [01:02:29] I love it.

Caitlin [01:02:35] Do you have a question about finance or investing? Send it to us in an email or voice memo to our website, womenontheverge.com. Don't worry, Sara will answer it. I won't.

Sara [01:02:46] Hey, women on the verge, we want you to know that economic abuse isn't always obvious, but it's a powerful form of control. Maybe a partner limits your access to money, sabotages your work, or racks up debt in your name. If any of this feels familiar, please know you're not alone and support is out there. Learn more at thehotline.org or call 800-799-

Caitlin [01:03:11] Our podcast is edited by our co-producer, Kelly West, with music by BadBadHats and DevMo. I know the first thing you notice is that I'm cupid in.

Sara [01:03:30] This podcast contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. PASS performance is no guarantee of future results. There is no guaranteed that the views and opinions expressed in this podcast will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not considered as a solicitation to buy or sell any security.