On Simplicity

There’s a lot to be said for keeping things simple.  Sure there is an argument for having complex systems and running around like a demented squirrel in order to squeeze the last penny out of a coupon. But there is also a case for simplicity. Somewhere….

I’m close to making that change myself, and have been moving towards it for some time now.  From a credit card perspective I have a bunch of cards that I don’t use any longer. They serve no purpose, and just add clutter and confusion to my life.  Sure, the savvy among you will warn me of the dangers of closing an account that is 4 years old because it will screw up my AAOA (Average Age of Accounts) and destroy my credit score- but really, is that such a big deal?

The approach I’ll most likely take isn’t completely tree hugging commie on this.  I’ll employ a degree of savvy and attempt shift credit lines off onto my oldest card, but I’d really like to build a new structure, and I see it moving from sock drawing cards after meeting minimum spend to consolidation.

I actually already did this with Chase on the personal side.  I’ve held the Chase Sapphire Preferred, a United card, Hyatt card, maybe one other and now hold just a Freedom.  That all changes in a few days when my Ritz Carlton card arrives, but the way I see it is the Freedom is the core, and when the annual fees come due on cards I’ll just push the line of credit over to that core and close out cards.  There is an argument for not doing this, and instead incubating new Freedom cards via downgrades, but at this time I don’t see the value in that.

Let’s say I have 10 Freedom cards.  I can then generate $15K per quarter when the 5x category aligns with the stars, such as this Quarter, where I could buy a lot of groceries.  However, I hold the old Amex Blue which grants me 5% all the time anyway.  Certainly, I agree that an Ultimate Reward point is worth more than a penny, so there is some upside, but it isn’t enough upside for me to start stressing about which card has which load on it, and tracking all that crap.  I just don’t chase pennies any more.  So, rather than earn 75K ultimate rewards, I’ll just earn $1000 in cash, if I choose to work that hard at it, and it’ll do.

I’m still debating the Fidelity Amex vs Arrival.  I gave both to the wife and say ‘use the Fidelity Amex where you can and the Arrival where they won’t take Amex’.  But we are talking about ‘real spend’ here.  And we are excluding Grocery, Gas and Drugs (5% on my Amex Blue) so it’s really a difference of pennies again.  Over a year, I’d be surprised if there is $1,000 of walking around incidental spend in this everyday category.

Is difference between 2% Cash and 2.2222893% travel money (that we will certainly spend) worth holding two cards and flipping between them vs just cutting one out of the wallet?  From a clarity perspective, the Arrival makes a lot of sense.

I’m starting to think this through and the way I see it now we will get to:

• A 5% Card for Gas, Groceries and Drugs
• A 2% Card (Probably the Arrival) for everyday spend
• An ATM Card

And that is all we will carry in our wallets.  There will then be a small stash of 11 month cards that are there until termination calls, and another of fee free cards, but not more than one fee free card per issuer.  That’s the ‘vanilla’ stuff. I figure that it might be smarter to carry certain cards in my passport case, such as those that grant lounge access, though I may fly domestically and forget about them….

Distinct from that I would hold a series of cards that is used solely for points generation, , SPG cards, Club Carlson cards here.  But these don’t need to come out with us every day.

Why haven’t I done it already?

There is a contradiction in my thinking.  I believe that if you want to earn vast amounts of points clean systems don’t work.  Also, I generate spend purely opportunistically.  This means that if I happen to be walking past a rack of cards, or driving by the right store, I might swing by and pull the trigger on some spend.  I don’t ever go out purely to generate spend.  With that in mind I need a toolkit handy.

For example, I need:

• An Ink – I don’t want to have it in my wallet, but as I MS opportunistically, I’d want it handy
• SunTrust Debit
• Reloadables (Serve/BB)
• An extra card with a nice line of credit – such as the SPG Amex.

I wonder if there is a middle ground where I can find a way to clear out the clutter, but not be overly negatively impacted by the changes I make?