credit cards

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As unemployment numbers continue to rise, many employees are stressed about whether they’ll have a job next week or not.  Some have already, some have already lost their jobs and are scrambling to find new employment.   In this time financial planning is crucial.  This is a time when people are feeling and are desperately in need of guidance.  If you think that you are about to encounter a layoff,  you need to be focusing your attention on what can be controlled:  cutting expenditures, figuring out emergency funds, evaluating how to replace lost benefits, and making a game plan for the job search.

1. Save Emergency Cash

For those that are still employed but the future of their job is uncertain, I would encourage them to have at least 12 months of savings in cash.  Unfortunately many will not have enough.  But if they’re still employed and the emergency funds are not there, tapping into their 401(k) might be a viable option.  I know what you’re thinking.  Tapping into your 401k usually goes against all that I stand for.  And with this dismal market,  it might be a dangerous move, but;  if they become unemployed that option might now be available to them.

Typically if you’re still employed you’re allowed borrow up to half of your 401(k) balance, up to a maximum of $50,000.  Running these numbers you can guesstimate the period of how long you think it will take you to find a new job and then how much you would need to borrow to get you by until the new job is made.  If you borrow from your 401k while you are still employed then you avoid the 10% withdrawal penalty.  Sure there is some speculation in this move, but if you’re in a high demand field you may be able to use this move to your advantage.

Warning: If you do this, be sure to double check with your employer when you are due to pay it back.  It tends to vary from employer, but it could be due back immediately, within 60 days or some period greater.

2. Don’t Pay Off Debt

Another common misconception of after being laid-off is that most people want to take their savings or take their retirement savings and pay off debt, such as credit cards or even the 401(k) debt.  But in this type of market, paying off debt should not be the priority especially if you are unemployed.  The priority is to keep get your savings intact and making sure that you have plenty of cash on hand.  Sure credit card debt is bad, but just focus on making the minimum payment until you get your job situation in check.

3. Focus On Crisis Budgeting

If you’re used to going to shopping every weekend or eating out every other night at fancy restaurants, then most likely those changes are just around the corner. You need to sit down and seriously hammer out a budget of things that you need and things that you don’t need.

You may even consider working out two budgets, one for while you’re working and one for when you’re not working, so that way you can truly see how much you’re spending per month. And then, you can contemplate whether you can go on a cheaper cell phone plan, or cut your cable bill services. Sometimes adding that extra payment per month might not seem like a big deal, but $50 here and $50 there will surely add up, especially on a limited budget. Also, too, knowing which expenses you absolutely must be covered will help you realistically search for your future job.

4. Replace Lost Benefits

In the aftermath of a job loss, people should take stock of what benefits have been lost, which ones you are entitled to by law, and which ones may be portable.  how to continue health care coverage, especially if there are dependents.

Typically, employees are eligible to keep the same coverage through COBRA for at least 18 months. But, they may have to pay 102% of the cost of their insurance premium. If there premium have been subsidized by their employer, then that cost will be a rude shock.  COBRA can often be a good bridge choice, but it ends up being a health benefit. Families paying $200 a month for insurance under COBRA, it could be $1,000.  Luckily, the government just passed new law concerning COBRA benefits that qualifying period will be only responsible to pay for 35% of the benefit.  This comes at a time that should be very helpful to many that are facing layoffs ahead.

Many employers offer life insurance, long-term care insurance, disability policies and they may be portable as well. For another person or one who is not in good health, ability to take over the payments on existing $100,000 life insurance policy may save the worry of having to find another carrier. It’s better to keep it for a few months, although make sure they don’t need it, and drop it later.

5. Consider a Career Transition

Many people will be forced by an unforeseen job layoff to reassess what they want in their lives and what is meaningful to them. They may have to craft resumes, cover letters for the first time in years, and feel at a loss especially if they are switching to a new career path, which is an unfamiliar field.

If you haven’t jumped on the social media bandwagon, it’s time.  Consider Facebook, LinkedIn, Twitter and other social media sites to reconnect with old networks and also create new ones.  The more people that know your situation the better.   Also, consider starting a blog to showcase your talents. Need a good blog for inspiration?  Guess what, you’re already here.

by Steve Rhodes

Source: goodfinancialcents.com

Apache is functioning normally

Editor’s note: This is a recurring post, regularly updated with new information and offers.

The American Express® Gold Card and the American Express® Green Card are two of the most iconic credit cards offered — the Amex Green alone has been around for more than 50 years.

But classic doesn’t mean outdated, as these cards have both received dramatic makeovers in recent years, resulting in two competitive products aimed at different market segments. The Amex Green is more focused on travel, while the Amex Gold is better suited for everyday spending on groceries and eating out.

Today, we’ll take a deep dive into the features and benefits of these two products and see which one might be the better fit for you.

Comparison of benefits

Benefit detail American Express Green Card American Express Gold Card
Annual fee $150 (see rates & fees). $250 (see rates & fees).
Welcome bonus Earn 60,000 Membership Rewards points and 20% back on eligible travel and transit purchases made during your first six months of cardmembership (up to $200 back) after you spend $3,000 on purchases on your new card in your first six months of card membership. Earn 60,000 Membership Rewards points after you spend $4,000 on eligible purchases with your new card within the first six months of cardmembership.
Earning categories
  • 3 points per dollar on travel (including flights, hotels, transit, taxis, tours and ridesharing services).
  • 3 points per dollar at restaurants.
  • 1 point on all other purchases.
  • Terms apply.
  • 4 points per dollar at U.S. supermarkets on up to $25,000 spent per calendar year (then 1 point per dollar).
  • 4 points per dollar at restaurants.
  • 3 points per dollar on flights booked directly with airlines or through Amex Travel.
  • 1 point per dollar on all other purchases.
  • Terms apply.
Travel benefits
  • Up to $189 annual credit for Clear Plus.
  • Up to $100 annual LoungeBuddy credit.
  • Car rental loss and damage.*
  • Baggage insurance.**
  • Trip delay insurance.***
  • Up to $120 in Uber Cash annually ($10 monthly credits) for U.S. services. Must add card to Uber app to receive benefit.
  • $100 experience credit for your stay of at least two nights at The Hotel Collection.
  • Car rental loss and damage.*
  • Baggage insurance.**
  • Trip delay insurance.***
Additional benefits
  • ShopRunner free 2-day shipping on eligible items. Enrollment is required.
  • Purchase protection.**
  • Extended warranty protection.**
  • Entertainment access.
  • No foreign transaction fees (see rates & fees).
  • Up to $120 annual dining credit at select restaurants (up to $10 per month) per calendar year. Enrollment is required.
  • ShopRunner free 2-day shipping on eligible items. Enrollment is required.
  • Purchase protection.**
  • Extended warranty protection.**
  • Entertainment access.
  • No foreign transaction fees (see rates & fees).

*Eligibility and benefit level varies by card. Not all vehicle types or rentals are covered, and geographic restrictions apply. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company. Coverage is offered through American Express Travel Related Services Company, Inc.

**Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.

***Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by New Hampshire Insurance Company, an AIG Company.

Welcome offer

Both cards have an attractive welcome offer.

The Amex Green currently offers 60,000 Membership Rewards points and 20% back on eligible travel and transit purchases made during your first six months of cardmembership (up to $200 back) after you spend $3,000 on purchases on your new card in your first six months of cardmembership. This is the best offer we’ve seen available to the public.

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The Amex Gold, on the other hand, offers 60,000 Membership Rewards points after you spend $4,000 on eligible purchases with your new card within the first six months.

MASKOT/GETTY IMAGES

Because TPG currently values Membership Rewards points at 2 cents each, both points bonuses are worth $1,200. But you can get up to an additional $200 back with the Amex Green bonus.

Sometimes, the cards have offered higher targeted welcome offers through the CardMatch Tool (offer subject to change at any time), so be sure to check this tool before applying for a card.

Note that if you’ve held either of these cards before, you’re almost certainly ineligible for a welcome offer. Despite the revamps both cards have received in the past few years, they’re still considered the same products. In addition, American Express also considers other factors to determine welcome-bonus eligibility, though it should notify you of your status before you submit your application and face a hard inquiry.

Winner: Given the additional 20% back on travel and transit purchases as part of its welcome offer, the Amex Green comes out ahead in this category.

Related: Ultimate guide to credit card application restrictions

Earning categories and bonuses

The Amex Green offers 3 points per dollar on travel — including transit purchases such as taxis and ride-hailing services. You also earn 3 points per dollar at restaurants around the world and 1 point per dollar on all other eligible purchases.

The Amex Gold Card offers 4 points per dollar at restaurants and on purchases of up to $25,000 spent each calendar year at U.S. supermarkets (then 1 point per dollar). You’ll also earn 3 points per dollar on airfare purchased directly with the airline or through Amex Travel. For all other purchases, you’ll earn 1 point per dollar.

WYATT SMITH/THE POINTS GUY

When you compare these rates, the Amex Gold offers you 33% more points at restaurants than the Amex Green, and it also offers 4 points per dollar when you buy groceries (or anything else) from a supermarket in the U.S (up to $25k in purchases each calendar year; then 1 point per dollar.)

And although they both offer 3 points per dollar on select travel purchases, the Amex Green Card opens up the bonus points to all travel-related purchases. This means anything coded as “travel” on your monthly statement will receive the bonus points.

For the Amex Gold Card, you’ll only earn 3 points per dollar on a limited number of airline-specific purchases, which includes purchasing airfare from the airline directly (not an online travel agency) or through Amex Travel. This means you’ll only earn 1 point per dollar for hotels, cruises, transit and many other travel-related purchases.

Winner: If you’re a commuter or a frequent traveler (and don’t spend much at U.S. supermarkets) and don’t have another card that offers you bonuses for travel spending, then the Amex Green has a strong advantage. Otherwise, the Amex Gold Card will likely offer more points for most people’s spending.

Related: What counts as travel on the Amex Green card?

Travel benefits

A standout benefit of the Amex Green is its up to $189 annual credit toward a Clear Plus membership, which is enough to fully cover the cost of one adult membership.

Clear machines SUMMER HULL/THE POINTS GUY

The Amex Green Card also offers an annual up to $100 LoungeBuddy credit, which can be applied to the admission fee for hundreds of lounges worldwide. This could be somewhat valuable to those who don’t already have a Priority Pass Select benefit from a different credit card. Enrollment is required.

The Amex Gold Card offers up to $120 in Uber Cash. With this benefit, you’ll receive up to $10 monthly in Uber Cash credit, which can be used on Uber Eats orders or Uber rides in the U.S. The fact that you can use these credits on takeout means card members should have no problem using the cash — which puts a full $120 value on the perk.

Both cards offer car rental loss and damage coverage (secondary coverage)*, baggage insurance** and trip delay protection.*** However, the Amex Gold also provides access to benefits and discounts when booking accommodations through The Hotel Collection (minimum two-night stay required).

The trip delay protection is typically the most valuable to many cardholders since you’ll be reimbursed up to $300 per eligible trip if your trip is delayed more than 12 hours. This will cover unexpected out-of-pocket expenses, such as meals, lodging and personal use items.

Winner: Given that both cards offer the same travel protections, the Amex Green comes out ahead with its valuable Clear and LoungeBuddy credits.

Related: What your card’s trip protection covers

*Eligibility and benefit level varies by card. Not all vehicle types or rentals are covered, and geographic restrictions apply. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company. Coverage is offered through American Express Travel Related Services Company, Inc.

**Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.

***Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by New Hampshire Insurance Company, an AIG Company.

Shopping benefits

The Amex Gold Card has an up to $120 annual restaurant credit at select establishments, including The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. If none of those appeal to you, you can apply that credit to delivery or takeout orders from Grubhub. Because it’s so easy to use, most cardholders can get the full $120 value from this benefit. Enrollment is required.

You’ll also notice that both cards offers purchase protection* and extended warranty benefits* — an important card feature to have for many purchases (especially those that can break easily). The Amex Gold Card comes out slightly ahead in this department since the purchase protection perk covers your purchase up to 90 days from the day of purchase, up to $10,000 per claim and $50,000 per year.

While the Amex Green Card also includes the same 90-day benefit, you’re capped at $1,000 per claim and $50,000 per year. For an expensive purchase, the Amex Gold Card is preferable, but most cardmembers will find the maximum to be more than sufficient with the Amex Green Card.

THE POINTS GUY

Additionally, both cards come with free ShopRunner two-day delivery from select online merchants and the American Express Entertainment Access program that gives you preferred access to shows and sporting events.

Winner: With its dining credit and more valuable purchase protection coverage, the Amex Gold easily comes out ahead in this category.

*Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.

Related: Complete guide to the Amex Gold dining credit

Bottom line

Although the American Express Green Card has much to offer, its more upscale sibling — the American Express Gold Card — is still a better fit for most.

Using the Amex Gold Card to earn more at restaurants and U.S. supermarkets is likely more attractive to most people than the Amex Green’s bonus earning on a wider range of travel purchases. In addition, the higher annual fee of the Amex Gold is offset by up to $240 in annual credits.

Still, with a lower annual fee, useful travel credits and broad bonus categories, the Amex Green is a solid option.

No matter which you choose, you can rest assured you’re adding a great card to your wallet.

For more details, check out our full reviews of the Amex Green and Amex Gold.

Official application link: Amex Gold Card with a welcome bonus of 60,000 points after you spend $4,000 within your first six months of cardmembership.

Official application link: Amex Green Card with a welcome bonus of 60,000 Membership Rewards points and 20% back on eligible travel and transit purchases made during your first six months of cardmembership (up to $200 back) after you spend $3,000 on purchases on your new card in your first six months of cardmembership.

For rates and fees of the Amex Gold, please click here.
For rates and fees of the Amex Green, please click here.

Additional reporting by Emily Thompson, Benét J. Wilson and Jason Steele

Source: thepointsguy.com

Apache is functioning normally

Each payday you have great intentions.  You swear that this is the month where you aren’t going to spend too much money. You are going to watch every penny and keep your spending under control.  Before you know it, you can’t even afford to buy groceries.   Is there an answer to your problem?  Yes.  STOP SPENDING MONEY.

Overspending is a problem which affects many people.   Whether you are rich or struggle to make ends meet, you too might find that you spend too much.  Some reasons are financial, and others are emotional.

The first way you can get spending under control is to take a look as to why you are spending too much. That is the first step.  No one can answer this question but you.

After years of helping thousands of readers (just like you), I’ve compiled a list of the top 12 reasons that people overspend.  You might find yourself in one, two or even more!

HOW DO YOU KNOW IF YOU ARE OVERSPENDING?

YOU’VE MAXED OUT YOUR CREDIT CARDS

When there is no room to charge anything on your cards, you might have a problem.  In most cases, maxed credit cards signals you are living beyond your means.  If you have to continue to charge because you don’t have money, then you are spending too much.

YOU CAN’T FIND A HOME FOR YOUR LATEST PURCHASE

Your temptation might be electronics or handbags. No matter what you love to buy, you might notice you are running out of room to store things.  When the stuff takes over your home and is causing clutter, it is time to take a long hard look at how you spend money.

YOUR BUDGET NEVER WORKS

There may be months when you don’t have enough money in your budget to cover your mortgage or food.  When you continually spend money on the wrong things, your budget will not work.

That means if you have just $50 for entertainment, do not spend $75.  That other $25 has to come from another budget line.

YOU SPEND MORE THAN YOU EARN

Take a look at your credit card balances. You might be paying only the minimum balance because you can’t pay it in full. When you spend more than you make and continue to add more debt, take a look at what you are buying.  It might be time to pull back and stay out of the stores.

HOW TO STOP SPENDING SO MUCH MONEY

Now that you can see how you spend your money, the next step is to make a change.  You have to stop throwing it away.  Right now.  Here are the steps to take to control and stop spending money.

1. MAKE A BUDGET

I know, I know.  I probably sound like a broken record as I keep bringing up this budget thing.  However, it’s true. If you do not have a budget, you have no idea where you are spending your money.

A budget is needed so that you can direct your money where to go each time you get paid.  It also helps you know how much you have to available to spend on groceries, clothing, dining out and even entertainment.  When you know you have a limited amount to spend on specific categories, you are instantly in control of our spending.

Read more:  How to Create a Budget (even if you suck at budgeting)

2. PLAN AHEAD

Meal planning is one thing many people don’t think about when it comes to overspending.  If you don’t plan your meals (and stock your fridge and pantry accordingly), you are more likely to run out to eat for dinner. Doing this at $25 a pop 2 or 3 times a week takes its toll on your budget.

Creating a meal plan will not only help you control your spending, but you might also find that you eat (and feel) much better too.

3. USE A SHOPPING LIST

Before you go to the store, it is essential you make a list.  Check your fridge, freezer, and pantry so that you are not purchasing items you do not need – especially produce.

There is so much waste of food that expires before you can consume it.  That results in you buying items so that they can end up right in the trash can.  Make sure you plan your shopping trip and then purchase just what you need, as well as what you can eat before you hit the store the following week.

4. STOP PAYING FOR CONVENIENCE

There is a quick fix for nearly everything.  You can find dinners in boxes, small pre-packaged snacks, etc.  Rather than purchase convenience items, buy the larger size snacks and then re-package yourself into smaller baggies.  You will not only get more out of a box, but you can even control how much you put into each baggie.

There are other ways we pay for convenience.  We pay for someone to iron our shirts, wash our cars and even mow our lawns.  By doing these things ourselves, we can keep much more money and easily stop overspending.

Read more:  How You are Killing Your Grocery Budget

5. STOP USING CREDIT CARDS

We live in an age where our money is all digitally tracked, be it on credit or debit cards.  Yes, they are more convenient, but they make it easy to overspend.  When you use cash, it is impossible to overspend.  You honestly can. Not. Do. It.

I hear all the time that people pay off cards at the end of the month and that they don’t overspend, but that is not the truth for most people.  You might think that it is just $10 a week.  However, that $10 a week is a hit of $520 over the course of a year.  What could you do with an additional $500 in your pocket?

Read more:  How to Create a Workable Cash Budget System

6. PAY YOUR BILLS ON TIME

We all have bills.  We know when they are due.  When you miss the payment due date, you get assessed a late charge.   Pay them on time, so you don’t pay more than you need to.

In addition to late fees, not paying your bills on time can have an adverse effect on your credit score.

Learn how to organize your bills, so you never pay them late again.

7. DO NOT LIVE ABOVE YOUR MEANS

Few of us would not love new clothes or a new car. We all would like to make more money or get the hottest new device.  The thing is, can you afford it?  Is it a want or is it a need?

If you are using credit or loans to get items that you can not afford, then you are living beyond your means and spending money you don’t have.  Scale back and make sure that you can honestly afford the house or the car and that it doesn’t ruin your budget and cost you too much.

Read more: Defining Your Wants vs. Your Needs

8. DON’T FALL FOR IMPULSE BUYS

Stores are sneaky about making us spend money.  They use signs, layout, and even scents to lure you into wanting to buy more.  The thing is, if you purchase something you did not intend to, then you are already blowing your budget and probably overspending.

Another way that you are spending too much is when you plan dinner but then decide at the last minute to go out to dinner instead.  Why do that when you have food waiting for you at home (which you’ve already paid for)?

The final reason you may impulse buy is that of emotion.  If you feel a rush because of that new item, you may purchase out of impulse and emotion instead of need.

Read more:  Stopping Impulse Shopping

9. FIND ANOTHER BOREDOM FILLER

I remember being in an online forum when my kids were little, and we talked about our day.  Many of the mothers went to the store every. Single. Day.  They said they could not handle being in the house and just had to go somewhere.  That resulted in them buying things they did not need.

If you are bored, find a new hobby.  If you just need to get out of the house, why not go for a walk or play a game with the kids?  Find a way to redirect your boredom so you stay out of the store and stop overspending.

10. USE FINANCIAL GOALS

When you do not have financial goals, you have nothing to work towards. You might want to get out of debt, or you may want that newer vehicle.

Take a look at what you are spending each week on non-essential items.  What would happen if you would put that money into savings or paid off your debt instead?  How much closer would you be towards getting that new car or being debt free?

Find a goal you want to achieve.  Talk to your family and see if you have something you can work towards together.  By setting a goal that everyone wants, you will all be more aware of your spending and will contribute towards reaching it more quickly.

11. STOP SPENDING MONEY WHEN YOU TRACK YOUR SHOPPING

I know many people who have tried to use cash, and they say it does not work because they spend it too quickly.  There are others I know who spend too much on plastic each month.  The reason is that they are not tracking what they spend, which is a reason why they overspend.

If you use cash, this is where the envelope system is most helpful.  You will track your spending out of each one so you can see where your money is going.  As the envelope amount gets smaller and smaller, you think twice before you pick up that item — because you may not be able to afford it.

You can do this same thing if you use plastic.  There are all sorts of tracking apps to help you monitor what you are spending on all of your various categories.

No matter how you pay for items, make sure you are always tracking what you spend – you might be shocked to learn where your money goes.

Read more:  Creating and Understanding a Spending Plan

12. DON’T FALL FOR THE SALES

When you walk into the store, pay no mind to the sales.  Use your list and stick to it.  Don’t fall for the fancy sales signs, smells, and flashing lights to lure you into buying something you don’t need.

Read more:  Understanding the Tricks Stores Use to Get You to Spend Money

Before you can gain control of your finances, you need to figure out why you are spending more than you should.  Simple changes to the way you view money can make all the difference.

Source: pennypinchinmom.com

Apache is functioning normally

This post may contain affiliate links. That means if you click and buy, I may receive a small commission. Please see my full disclosure policy for details.

Last updated – May 1, 2023

(Make sure you read Part 1 of My Journey and get caught up before you proceed with reading part 2 below).

As I shared in Part 1, I had declared bankruptcy.  Fortunately, a few months before that had actually happened, I met my (future) husband.  We both had the same beliefs and morals, and we immediately connected.  He knew of my financial past.  In fact, he even said that he really did not want to get married until my bankruptcy was behind me.

In early August 2002, I formally declared my bankruptcy.  It was not a good feeling, but at the same time, I had owned my mistakes. I knew that this would follow me for the next ten years of my life.  I messed up.  Plain and simple.  The good thing is that my (future) husband was understanding.  And, within a few days of my bankruptcy being filed, he proposed.  In June 2003, we were married and began our lives together.

We both were a little older and wanted children, so we knew that we did not want to wait to start our family.  After just 15 months of marriage, our first little girl was born – Emma.    Prior to having our first child, we both agreed that I wanted to stay home and raise her. This meant I would need to quit my job. It also meant some strain on our family financially.

We pressed on.  While money was tight, we did a good job at not using our credit cards to live.  However, we ended up taking out a home equity loan to take care of some things around the house.  We also had two vehicle loans.  We even had a little bit on credit cards.    We struggled some months to make the minimum required payments, but we managed.  I still am not sure how did just that.

March 2007 came along, and our son was born.  That meant we would have another mouth to feed in the coming months.  We kept pressing on — sometimes robbing Peter to pay Paul.  In October 2007, our son’s Godparents shared with us Dave Ramsey and his Total Money Makeover plan.  We both knew we needed to eliminate our debt but of course, were clueless about how to go about doing it.

We were both very curious and eager to learn what Dave Ramsey could teach us.  So, in early November 2007, we placed an order for his books.   We sat down and read everything within a few days (no joke).  As we read his books, we had no clue as to how this man would change our lives — forever…..

Source: pennypinchinmom.com

Apache is functioning normally

Some people buy things because they think it will make them happier. They may buy a new pair of shoes to feel better about themselves or a new car to impress someone.

Well, I want to tell you something: Buying things won’t make you a happier person. Instead, you should focus on what makes YOU happy.

However, that doesn’t stop some people from spending much more than they have, especially because it’s easy to think that buying things will make them a happier person.

Considering that 68% of people live paycheck to paycheck, 26% have no savings whatsoever, the median amount saved for retirement is less than $60,000, and the average household has $7,283 in credit card debt- I’m going to assume that the average person is feeling more stress than happiness due to the things that they buy.

Sure, you may get a little bit of excitement as you purchase that new pair of shoes or new car (occasionally), but for the most part, you won’t still have that same feeling years later.

You probably won’t even be happy with that purchase just a month later!

Usually, you’ll regret it or feel some other negative feeling, and in today’s post we’ll talk about why that spending won’t make you happy.

Now, I’m not saying that all spending is bad. Spending is fine, as long as it’s budgeted for, you can afford it, and it actually makes you happy! In this blog post, I’m referring to the opposite type of spending- the type where you’re trying to impress someone, emotional spending, and so on.

Related:

Buying things won’t make you happy for many reasons. Continue reading below to learn more.

Your stuff doesn’t define who you are.

Having more stuff doesn’t make you happier and your stuff doesn’t define who you are.

You’re not that pair of pants…

You’re not your car…

You should only purchase things that you want and/or need, and not if you are trying to pretend to be someone else. You should only own something if you truly want it. Who cares about what everyone else has!

Your emotions can lead to spending disasters.

Some people spend money and buy things because they believe that it will make them happy. This is known as emotional spending.

According to NerdWallet, the average U.S. household (who has debt) has an average credit card debt of $15,611, and I’m sure some of that is due to emotional spending.

Emotional spending occurs for many different reasons. You may have had a bad day at work, a fight with your loved one, and so on. You might even be spending because you are stressed out about the amount of spending you have done.

However, emotional spending usually just leads to more problems and most often, never cures anything.

To end your emotional spending habit, I recommend:

  • Figuring out how much debt you have. You’ll most likely be shocked, and hopefully this will persuade you to change your spending habits and the way you deal with stress.
  • Understanding why you spend when you’re stressed. In order to stop stress spending, you need to really think about why you have this problem. Without understanding your problem, you may continue to fall into the same cycle over and over again.
  • Thinking about your financial goals, so that you can stay motivated.
  • Finding different ways to deal with stress.
  • Sticking to a budget.

Buying things can prevent you from reaching your goal.

You may be preventing yourself from reaching a financial goal by purchasing more and more. This can lead to additional stress, sadness, a feeling of defeat, and more.

The next time you are going to purchase something that is just a “want,” you may want to think about whether or not it will hold you back from your goal.

More stuff means more to maintain.

With every item you add to your life, there will be more and more that you’ll have to spend extra time and money to maintain. Things may get broken, lost, stolen, dirty, etc. They may need to be repaired or even replaced.

Who wants all of that stress?

That purchase may cost you more in the long run.

To build on the previous point, the initial cost of purchasing an item may not be the only cost. You may also need to pay to store the item, organize it, interest charges, and so on.

This can lead to more stress, more time spent on the item, and so on.

There’s always something else to buy.

I know people who are always buying the latest and greatest items. Every year they will buy the newest iPhone, they’ll upgrade their laptop, and more. Most of these people are in debt and live a paycheck to paycheck lifestyle.

Are these people happy?

I don’t know, but I don’t see how upgrading every single year could make you a happier person if you can’t afford it.

The thing is, there will always be something newer to buy. If you want the latest and greatest thing, you may be disappointed because there will always be something else.

What makes one person happy won’t necessarily be the same for you.

I’m sure almost everyone, at one point in their life, has felt the need to keep up with someone else.

You may want the same car, the same house, the same designer clothing, and so on.

The problem with this is that it can make you broke.

When trying to keep up with someone else, you might spend money you do not have. You might put expenses on credit cards to (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

This can lead to a significant amount of debt.

Trying to the same things as someone else is not worth it because:

  • You will never be happy, no matter how much money you spend.
  • You will constantly compare yourself to everyone.
  • You will go into debt because that’s the only way you feel like you can keep up.
  • You will have a loan payment for everything because that’s the only way you can “afford” things.
  • You won’t have any money leftover for retirement, an emergency fund, etc. because you’re spending it all on things you do not need.

Instead, you should figure out why you want to keep up with someone else, think about your own life and your own goals, realize that jealousy won’t get you anywhere, and try your best to live within your means.

You’re not impressing anyone.

If you’re purchasing things just to impress others, well- you will be disappointed. For the most part, no one cares or will even know that you bought something new.

You should do what makes you happy and only buy things for yourself- not to impress anyone else.

Money problems may lead to stress and other problems.

If you buy things that you cannot afford, this can lead to significant amounts of stress and other financial problems.

You may find yourself with more credit card debt than you can handle, personal loans, high interest charges, stuck in a paycheck to paycheck lifestyle, and more.

Who wants all of that?

Do you think that buying things makes you happy? Why or why not?

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Source: makingsenseofcents.com

Apache is functioning normally

There has probably been at least one point in everyone’s life when they have engaged in a bad money habit. However, it’s best to realize your bad money habit now rather than later!

I believe it’s much better to realize your problem as soon as you can so that you can take action towards changing for the better. Doing so can help you improve your financial situation for years to come.

Understanding your bad money habits and making a change can help you stop living paycheck to paycheck, eliminate debt, pursue your passion, save for your goals, reach retirement, and more.

Here are several bad money habits that may be making you broke.

Keeping up with the Joneses – what a bad money habit!

I’m sure almost everyone, at one point in their life, has felt the need to keep up with the Joneses.

Whether you are five years old and want that new toy everyone is playing with, or if you are 40 years old and are feeling the need to upgrade your house, car, etc., everyone has experienced it.

The problem with this is that keeping up with the Joneses can make you broke.

VERY broke.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

This can lead to a significant amount of debt.

Keeping up with the Joneses is not worth it because:

  • You will never be happy, no matter how much money you spend.
  • You will constantly compare yourself to EVERYONE.
  • You will go into debt because that’s the only way you feel like you can keep up.
  • You will have a loan payment for everything because that’s the only way you can “afford” everything.
  • You won’t have any money leftover for retirement, an emergency fund, etc. because you’re spending it all on things you do not need.

Instead, you should figure out why you want to keep up with the Joneses, think about your own life and your own goals, realize that jealousy won’t get you anywhere, and try your best to live within your means.

Related:

Letting your emotions take control of your spending.

Emotional spending is a bad money habit that many people take part in. It’s one you should stop, because it doesn’t cure any problems.

According to NerdWallet, the average US household (who has debt) has an average credit card debt of $15,611, and I’m sure some of that is due to emotional spending.

Emotional spending occurs for many different reasons. You may have had a bad day at work, a fight with your loved one, and so on. You might even be spending because you are so stressed out about the amount of spending you have done.

To end your emotion spending habit, I recommend:

  • Figuring out the amount of debt you have. You’ll most likely be shocked, and hopefully this will persuade you to change your spending habits and the way you deal with stress.
  • Understanding why you spend when you’re stressed. In order to stop stress spending, you need to really think about why you have this problem. Without understanding your problem, you might just keep falling into the same cycle over and over again.
  • Thinking about your financial goals, so that you can stay motivated.
  • Finding different ways to deal with stress.
  • Sticking to a budget.

Not facing your debt.

Too many people never face their debt and don’t even know how much debt they have.

By not thinking about your total debt figure, it may seem less real and a way to run away from it. However, that will catch up to you in many ways, such as high interest charges, a bad credit score, numerous phone calls from debt collectors, possible paycheck garnishments, and more.

The first step to paying off your debt is to face it. You should add up your total debt, learn more about the debt you have, and create a plan to eliminate it.

Ignoring the importance of financial education.

Many people do not fully understand how credit cards work, how to improve their credit score, and more. However, if more people were educated on financial issues, this could lead to less debt, better managed budgets, and more.

I recommend diving into a good personal finance book, bookmarking your favorite financial blogs, staying up-to-date on the latest things going on in personal finance, and more.

Thinking you don’t need a budget.

Too many people go without a budget, because they believe they don’t need one. Sadly, many people believe that budgets are only for “poor” people, people who are horrible with money, and so on.

But, that just isn’t the case, at all. Nearly everyone needs some form of budget, even if that means just comparing your income and your expenses each month.

Budgets are great, because they keep you mindful of your income and expenses. With a budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Budgets have helped people reach their goals, pay off debt, make more money, retire, and more.

Believing you’re invincible.

While I always try to stay positive and am a firm believer in the power of positive thinking, I do believe that everyone should have an emergency fund. However, many people have no emergency fund whatsoever, and this is a bad money habit.

There are many reasons to have an emergency fund:

  • An emergency fund can help you if you lose your job. No matter how stable you think your job is, there is always a chance that something could happen.
  • An emergency fund is wise if you do not have great health insurance or have a large annual deductible.
  • An emergency fund is a good idea if you have a car and need repairs.
  • An emergency fund is a need if you own a home. One of the lucky things that homeowners often get to deal with is an unexpected home repair. Having an emergency fund can help you if your basement floods, if a hole forms in your roof, and more.

Emergency funds are always good to have, because they give you peace of mind when something costly happens in your life. Instead of building onto your stress, you will know you can still afford to pay your bills and worry about more important things.

Being afraid of investing.

One of the biggest bad money habits is that far too many people are afraid of investing and never start.

Here are some reason to invest:

  • You can retire one day.
  • You never know what may happen in the future, so preparing now is important.
  • You can allow your money to grow over time.

I always say, the first thing you need to do if you want to start investing is to just jump in. You’ll never learn unless you make an attempt.

Read more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!

If you are new to my blog, I am all about finding ways to make and save more money. Here are some of my favorite sites and products that may help you out:

  • Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I earn over $70,000 a month online through my blog and you can read more about this in my monthly online income reports. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
  • Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
  • Answer surveys. Survey companies I recommend include Survey Junkie, Swagbucks, Pinecone Research, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
  • Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first two weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. Each meal costs around $2 per person or less. This allows you to save time because you won’t have to meal plan anymore, and it will save you money as well!
  • I highly recommend Credible for student loan refinancing. You can lower the interest rate on your student loans significantly by using Credible which may help you shave thousands off your student loan bill over time.
  • Cut your TV bill. Cut your cable, satellite, etc. Even go as far to go without Netflix or Hulu as well. Buy a digital antenna (this is the one we have) and enjoy free TV for life.
  • Try InboxDollars. InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5.00 for free just for signing up!
  • Find a part-time job. There are many part-time jobs that you may be able to find. You can find a job on sites such as Snagajob, Craigslist (yes, I’ve found a legitimate job through there before), Monster, and so on.
  • Lower your cell phone bill. Instead of paying the $150 or more that you spend on your cell phone bill, there are companies out there like Republic Wireless that offer cell phone service starting at $10. YES, I SAID $10! If you use my Republic Wireless affiliate link, you can change your life and start saving thousands of dollars a year on your cell phone service. I created a full review on Republic Wireless as well if you are interested in hearing more. I’ve been using them for over a year and they are great.

What bad money habits are making you broke?

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Source: makingsenseofcents.com

Apache is functioning normally

Man, this card looks amazing! 4x cash back, $100 in annual hotel credit, and…

Oh, wait – there’s a $95 annual fee. 

Bummer. 

Well, hang on – maybe it’s still worth it? How can you tell? Will the perks and benefits justify the fee? Or is a no-fee card always the way to go?

To find out, let’s investigate paid rewards cards – why some cost $95 and others cost $695 (yeah…I know) – what you get for your money, and how much you really need to spend for a paid card to make sense. 

What’s Ahead:

What are annual fee credit cards? 

Source: fizkes/Shutterstock.com

As the name implies, annual fee credit cards are rewards cards that typically cost anywhere from $50 to $695 a year to use. 

Why do credit card issuers charge annual fees for some cards and not others? 

Credit card issuers typically charge an annual fee to help cover the costs of the perks included with the card. Despite the gobs of money these banks and card issuers make, even they can’t afford to offer every single cardholder free lounge access and $300 in travel credit each year. 

Annual fee credit cards usually include some combination of the following over no-fee cards:

  • Higher cash back.
  • Higher redemption bonuses (e.g. points are worth 1.5x when redeemed for travel).
  • Better welcome bonuses ($500 versus $200).
  • Statement credits (e.g. $300 annual hotel credit).
  • Perks and bonuses (VIP lounge access, 24/7 travel concierge, etc.).

Why are some fees so low ($35-$95) while others are insanely high ($695)? 

A $500 card will typically include more statement credits than a $100 card. 

Let’s look at two, seemingly identical travel cards: 

  • The Chase Sapphire Preferred® Card costs $95 a year, offers 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®., up to 5x points back on travel-related expenses, and more.
  • The Chase Sapphire Reserve® Card costs an eye-watering $550 per year, offers a 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®., and up to 10x points back on travel-related expenses, and more.

Sure, the fancy-schmancy Chase Sapphire Reserve® Card has more cash back (10x) and a higher redemption bonus within Chase Ultimate Rewards® (1.5x vs. 1.25x) than its sibling, but neither of those justifies a $455 price difference.

That is, until you consider the former’s annual cash bonuses. The Chase Sapphire Reserve® Card includes the following credits:

  • $300 Annual Travel Credit.
  • $100 Global Entry or TSA PreCheck® Fee Credit (every four years).
  • Complimentary enrollment in Priority Pass™ Select (aka VIP airport lounge access).

So even though the Chase Sapphire Reserve® Card costs more than a new mountain bike, it starts to make a little more sense if you plan to use all of the included credits. $550 – $300 – $100 = $150, which is just $55 more than the Chase Sapphire Preferred® Card. 

In short, most cards with fees over $100 should come with ample bonus credits to offset the fees. 

Can you ever get an annual fee waived? 

It may surprise you to hear that yes, even credit card annual fees are negotiable. You may not always negotiate successfully, but you can always try. 

Here are some tips for getting your card’s annual fee waived. 

Negotiate with your existing card company

If you already have a no-fee card and are considering upgrading to one of your card issuer’s paid annual cards, ring them up and just ask nicely. They may be willing to waive your annual fee for the first year.

Ask them to price-match with another card

Let’s say the annual fee credit card you really want costs $295 for the year, and you notice that it offers similar benefits to a competing no-fee or low-fee card. Call the card issuer and ask if they’d be willing to price match with the lower fee card – or better yet, waive the fee entirely. 

Chat with the retention department

If you already have an annual fee credit card and are trying to get your fee waived or reduced, and the agent on the phone isn’t playing ball, you can always ask to just cancel the card. 

At that point, one of two things will happen:

  1. You’ll be routed to the retention department, which is much more likely to bend to your requests.
  2. The agent on the phone will proceed to cancel your card.

If you don’t want to cancel your card, you may then have to suffer a moment of awkwardness when you tell the agent “actually, NVM” – so keep that in mind if you don’t like having your bluffs called!

When is it maybe worth paying a credit card annual fee? 

Source: Victor Josan/Shutterstock.com

You’ll earn more cash back than with a no-fee card – accounting for your annual fee

Let’s say you’re considering a card that charges a $95 annual fee but offers 3x cash back. 

Your first inclination may be to calculate how much you need to spend to offset your fee with cash back. So that’s:

$95 / 0.03 = $3,167

You easily spend that much in a year, so it seems like a good deal.

But hang on – remember, you’re not just trying to offset your fee – you’re trying to earn more than you would with a no-fee card. 

By the time you’ve spent $3,167 with a no-fee card with 1.5x cash back, you’ve already earned:

$3,167 x 0.015 = $47.50

Not until you spend twice that – $6,333 – does the annual fee credit card “catch up” to the no-fee card and start earning you more. 

In short, keep in mind that once your cash back covers your fee, you still have a lot more spending ahead of you to catch up to a garden variety 1.5x card. 

The card offers a steep welcome bonus to cover its fees

Thankfully, many annual fee credit cards have big, juicy welcome bonuses to cover their annual fees – oftentimes for several years over. 

Take, for example, the American Express® Gold Card. Sure, it charges a $250 credit card fee – but it also has a welcome bonus of 60,000 Membership Rewards® Points worth between 0.6 and 2 cents a pop when applied to travel through certain partners. 

You’ll get a statement credit for things you’re already paying for

The first time I saw the credit card fee for The Platinum Card® by Amex, I could hardly believe it. $695 a year? Who’s falling for this? 

But then, the little Amex fairy told me to keep reading, and amazingly, The Platinum Card® started to make sense. 

In addition to up to a 100k welcome bonus and up to 10x Membership Rewards® Points on select purchases, The Platinum Card® offers:

  • $200 Hotel Credit.
  • $200 Airline Fee Credit.
  • $200 Uber Cash.
  • $240 Digital Entertainment Credit.
  • $100 Global Entry or $85 TSA PreCheck®.
  • And more.

Before talking points and perks, the statement credits alone account for $940 worth of bonus cash back. 

If you’re already spending $940 within those areas, then The Platinum Card®’s $695 annual fee doesn’t just make sense – it’s a discount. 

The card has perks and bonuses that make your life easier

In most cases, a credit card’s perks alone probably aren’t worth paying an annual fee – but if you’re seeking a tiebreaker between a fee card and a no-fee card, they may just tip the scales. 

Annual fee credit card perks often include:

  • Travel insurance.
  • Lounge access.
  • 24/7 travel concierge assistance.
  • And more.

For example, among other things, the Delta SkyMiles Gold American Express Card always gives you Main Cabin 1 Priority Boarding, so you can stash your stuff and just relax sooner on every flight. That perk alone may not be worth $250 a year, but anything that lowers your stress is worth something!

When is it not worth paying a credit card annual fee? 

You won’t earn enough cash back to cover the fee

Remember, most no-fee cards these days offer 1.5x cash back. The Citi® Double Cash Card actually offers 2x cash back (plus a host of other benefits). 

For that reason, it’s becoming harder for annual fee credit cards to compete with their pro bono brethren. The annual fee card likely won’t justify itself on cash back rewards points alone, unless you spend a lot. 

You’ll need to also consider the perks and bonuses attached. 

The perks and bonuses aren’t worth the annual fee

The Luxury Card™ Mastercard® Black Card™ is a textbook example of a paid card that just isn’t worth anywhere near its annual fee. Its chief bonus – a $100 airline credit – doesn’t come close to covering the outrageous $495 sticker price. 

Keep in mind, too, that the perks, bonuses, and statement credit provided by an annual fee rewards card are only worth cash if you use them. I myself have forgotten to use my statement credit in the past, which is just leaving money on the table.

Your credit score isn’t high enough

This one’s simple – if your credit score is below 690, you may not even qualify for an annual fee rewards card in the first place. 

But wait a second – if you’re trying to pay for a credit card, why would the credit card company stop you from giving them money? 

Annual fee rewards cards are designed to attract big spenders – specifically, big spenders who have a track record of paying their bills on time. That’s why credit card companies require a higher credit score for paid cards – around 690, compared to 660 for a regular, no-fee rewards card (though numbers vary by card issuer). 

If you’d like to learn more about your credit score, check out How Credit Works: Understand The Credit History Reporting System. And if you’re trying to bump your numbers so you can successfully apply for a fancy paid card, we can help you there, too – check out How To Improve Your Credit Score, Step By Step. 

You need 0% APR on purchases or balance transfers

You should know that annual fee rewards cards rarely, if ever, offer 0% APR incentives. 

Again, that’s because these cards are designed to attract big spenders – not big savers or debt consolidators. In fact, most annual fee credit cards hammer you with the industry’s maximum APR right out the gate – usually around 29.99% – meaning there’s zero forgiveness for missing a payment. 

If you think you might need some help with old debt, new debt, or simply may miss a payment in the next year or so, you should absolutely stay away from a paid rewards card. Instead, consider our list of the Best 0% APR Credit Cards and Best Balance Transfer Cards. 

The card fits the lifestyle you want – not the one you have

Don’t make the same goober mistake I did!

From 2013 to 2015 I had a certain travel rewards card for work that commanded a $95 annual fee. And boy, was it worth it – my company required us to put all travel and dining charges on our own card (to be reimbursed later), so I was racking up the points. 

Then, when I left my job in 2015… I decided to keep my card a little longer, assuming I’d keep traveling. 

Instead, I settled in, wrote my book, and forgot to cancel my card. Basically, $95 down the drain.

Once I realized my mistake, I learned a valuable lesson in money management: 

Pick the credit card that fits the lifestyle you have – not the one you think you’ll have.

Questions to ask yourself before paying a credit card’s annual fee

Source: alexialex/Shutterstock.com

To consolidate the two previous sections, here’s a “gut check” questionnaire to see if a paid card is right for you:

  • Is my credit score high enough to apply for this card? Or do I need to bump my numbers?
  • Do I need 0% APR on purchases or a balance transfer? If so, a paid card typically doesn’t offer these and isn’t a fit – I should check out the top-ranked 0% APR cards for new purchases or balance transfers instead.
  • Why am I considering this card? Does it fit my existing spending habits? Or will it encourage me to spend more when I should be saving?
  • Will the welcome bonus offset its annual fee? Are the points worth a penny each, or less? And will I spend enough to trigger the welcome bonus in time (e.g. $4,000 in 3 months)?
  • Is it really better than a no-fee card? Now that no-fee cards offer up to 2% cash back on all purchases, is this paid card really worth it?
  • What is the combined statement credit worth? And will I even use it?
  • Will I really use this card for longer than a year? Or should I set a calendar note in 11 months to cancel it before paying the fee again?

When in doubt, stick with a no-fee rewards card. Like Mazdas and Toyotas, they truly are catching up to their “luxury” counterparts in terms of value and benefits for way less money. 

For a list of the top-ranked no-fee rewards cards, check out Best No Annual Fee Credit Cards – Don’t Pay A Dime To Get Another Credit Card. 

Tips for getting the most out of your no-fee card

They say that before you spend $35,000 on a shiny new car, you should spend $35 washing and waxing your old car first. Oftentimes, a good spit-shine is all you need to appreciate the car you already have. 

Similarly, if you’re considering upgrading from a no-fee card to a paid card, try spending a little time with your no-fee card first. 

  • Maximize your cash back rewards – Does your card offer rotating 5x cash back rewards categories like the Chase Freedom Flex℠? If so, be sure to both activate and maximize those rewards.
  • See what hidden perks your card has – Even no-fee cards offer a surprising amount of perks these days. Capital One VentureOne Rewards, for example, offers a free Auto Rental Collision Damage Waiver, free Travel Accident Insurance, automatic Extended Warranty Protection, and even lounge access – all for $0.
  • Consider another no-fee card first – If you still feel that your no-fee card isn’t meeting all of your needs or maximizing your cash back, consider another no-fee card before you invest in a paid card. As illustrated above, the Capital One VentureOne Rewards Credit Card is an excellent travel card with no fee that you can use specifically for booking flights and hotels without worrying about covering your annual fee.

Summary

So, should you pay for a rewards credit card?

Probably not. No-fee cards are just so generous with cash back and perks these days that most paid cards just aren’t worth it unless you’re spending gobs of money. 

But if that’s you, do the math – calculate how much you’ll spend on a no-fee card and its equivalent paid card, and determine how much money you’ll save and cash back you’ll earn. If a paid card truly pays you back in spades, it might be worth it. 

But for most of us, a no-fee rewards card will make us plenty happy.

For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

Read more:

Source: moneyunder30.com

Apache is functioning normally

Our rating

United Gateway℠ Credit Card

  • Sign-Up Bonus: Earn 20,000 bonus miles after you spend $1,000 on purchases in the first 3 months your account is open.
  • 2x miles: United Airlines purchases. 
  • 2x miles: Gas stations.
  • 2x miles: Local transit and commuting.
  • 1x miles: All other purchases
  • Redeem For: Award flights on United and its partners.
  • Annual Fee: $0
  • Credit Needed: Good or better

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The information related to the United Gateway Credit Card has been collected by Money Crashers and has not been reviewed or provided by the issuer of this card.

Earning frequent flyer miles from your credit card usually requires paying for a premium product, and there aren’t too many airline credit cards that have no annual fee. 

The United Gateway Credit Card is one of those rare airline cards that has no annual fee. But as you might expect, it comes with fewer benefits than its more expensive competitors. That may or may not be a dealbreaker for you — read on to find out.

What Is the United Gateway Credit Card?

The United Gateway Card is offered by Chase as a way to earn United Airlines MileagePlus frequent flier miles, with no annual fee. 

You start out with a modest sign-up bonus: Earn 20,000 bonus miles after you spend $1,000 on purchases in the first 3 months your account is open.

From there, you earn 2x miles on United purchases, at gas stations and on local transit and commuting expenses. Those expenses include rideshare services, taxicabs, train tickets, tolls, and mass transit. As with most cards, you only earn one mile per dollar spent on other transactions. 

Beyond the rewards program, the United Gateway Card has few benefits, but they can be valuable. 

First, you receive additional access to award seats at the lowest, “Saver” level, an important benefit reserved for United MileagePlus cardholders and United customers with elite status. You also receive 25% back on food, beverages, and Wi-Fi on board United-operated flights. And you get up to $1,500 in trip cancellation and trip interruption coverage, an auto rental collision damage waiver policy, extended warranties on select items, and purchase protection coverage on select purchases.

There’s no annual fee for this card and no foreign transaction fees. This makes it a great choice for international travel. Finally, you enjoy a 0% intro APR for 12 months on new purchases after account opening.

What Sets the United Gateway Credit Card Apart?

The United Gateway Credit Card is different not just because it has no annual fee, but also because it provides a few significant benefits and multiple opportunities to earn bonus miles. 

  • Double miles. You earn 2x miles on United purchases, at gas stations, and on local transit and commuting expenses.
  • Travel insurance protections. These include rental car insurance, trip cancellation and interruption coverage. 
  • Purchase protections. These include theft and damage coverage and extended warranty protection. 
  • Low fees. This card has no annual fee and no foreign transaction fees. 
  • Introductory financing. You enjoy a 0% intro APR for 12 months on purchases, though not balance transfers. 

Key Features of the United Gateway Credit Card

The most important features of this card are low fees, bonus miles and cardholder benefits. 

Sign-Up Bonus

Earn 20,000 bonus miles after you spend $1,000 on purchases in the first 3 months your account is open.

Earning Rewards

This card offers plenty of opportunities to earn bonus miles:

  • 2x miles for United purchases
  • 2x miles at gas stations 
  • 2x miles  on local transit and commuting expenses 
  • 1x mile on all other eligible purchases.

“Local transit and commuting expenses” covers a wide range of purchases, including: 

  • Rideshare services
  • Taxicabs
  • Train tickets
  • Tolls
  • Mass transit

Redeeming Rewards

You can redeem your accumulated miles for award flights operated by United and its partners. 

Exactly how much value you get from them is a moving target. That’s because United no longer publishes an award chart and has been known to change how much it charges for particular flights without notifying anyone. But in general, you need 80,000 to 100,000 miles for a one-way, business class ticket to Europe. You can get by with about half that if you travel in economy. 

0% Intro APR Promotion

This card offers 12 months of 0% APR introductory financing on new purchases. After that, variable regular APR applies.

Important Fees

There’s no annual fee for this card and no foreign transaction fees imposed on charges processed outside of the United States. 

Credit Required

This card requires good or better credit to qualify. If your FICO score is much below 700, then you’ll likely have trouble being approved. 

Advantages

This card’s advantages are designed for occasional United flyers rather than frequent travelers who care about high-end perks. 

  • Expanded access to the United Saver award level. This is a key benefit that allows you to get much more from your miles when you redeem for award flights. 
  • No annual fee an foreign transaction fees. This card’s biggest claim to fame is that it has neither of these fees. 
  • Good bonus categories. There’s a lot of ways to earn double miles with this card. That isn’t what you’d normally expect from a no-fee card. 
  • Good travel insurance and purchase protection benefits. Many credit card issuers aren’t offering benefits any more, so this is especially nice to see. 
  • MileagePlus partners and policies. You can redeem your United miles for flights on its numerous Star Alliance and non-alliance partners. United also eliminated change and cancellation fees on awards, so you’re free to book a ticket when you find a good deal and cancel it later if it doesn’t work out. 
  • 0% APR introductory financing on purchases.  Very few airline cards come with 0% intro APR financing, so this counts as a win for those planning big purchases (including vacations) soon after account opening. 

Disadvantages

This card lacks many of the features that you might expect from a rewards card. 

  • United devalues its miles. United eliminated its award charts several years ago, which means that it can always charge more miles for awards whenever it feels like it. For example, United recently started charging up to 50% more miles for many of its award flights to Europe without any prior notice. Unfortunately, you can’t count on the price you see now being available when it comes time to redeem your miles. 
  • No free checked bags. Pretty much all airline credit cards with an annual fee offer a free checked bag, but not this one. 
  • Low sign-up bonus. Most airline credit cards with an annual fee offer at least 50,000 miles as a sign-up bonus. The Gateway Card’s bonus is worth less than half that amount.

How the United Gateway Credit Card Stacks Up

The closest competitor to the United Gateway Card is the American Airlines AAdvantage MileUp Card from Citi. See how they compare before you apply for either.

United Gateway Credit Card American Airlines AAdvantage® MileUp® Mastercard®
Annual Fee $0 $0
Sign-Up Bonus 20,000 miles 10,000 miles
Rewards Rate Up to 2x miles Up to 2x miles
0% Intro APR 12 months on purchases None
Foreign Transaction Fee None 3%
Credit Needed Good or better Good or better

Final Word

The United Gateway Card is a basic airline credit card, but it still manages to give you more than you would expect from a stripped down version of the more premium cards. It does this by offering expanded award availability, decent travel insurance and purchase protection and many opportunities to earn bonus points. And if you can take advantage of the 0% APR offer, then it’s really worth considering. 

At the same time, you’ll get a less valuable sign-up bonus and no free checked bags. Both of those are perks you should reasonably expect from any airline credit card with an annual fee. 

What you’re left with is a card that’s well suited for someone who flies United a few times a year. But if you find yourself flying the friendly skies more often than that, then you should look into the United Explorer, Quest, or Club Cards, all of which have annual fees. 

The Verdict

Our rating

United Gateway℠ Credit Card

The United Gateway Card is a frequent flyer credit card with no annual fee and fewer perks than more expensive airline cards. However, it does have a few strong bonus categories, and some valuable cardmember benefits. That makes it a competitive card for occasional travelers.

Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Jason has been writing about personal finance, travel, and other topics on blogs across the Internet. When he is not writing, he has a career in information technology and is also a commercially rated pilot. Jason lives in Colorado with his wife and young daughter where he enjoys parenting, cycling, and other extreme sports.

Source: moneycrashers.com