601 | Travel Rewards 101 | Devon Gimbel from Point Me to First Class

22:37This is in strong contrast to that second flavor of credit card rewards called transferable points or miles. These come from the main banks, the main credit card issuers like Chase, Citi, Capital One, Wells Fargo, Amex, Built. And then we have this new program as of around the last year called Rove, which does not have credit cards, but they have their own points currency that is technically transferable. And all that means is that when you earn credit card points or Rove miles from that program, you are not limited to using those points or miles through one specific airline or one specific hotel.

23:13Instead, every single one of those programs has a menu, a full menu of multiple airlines and hotels that you can move your points to. So think about it as, you know, instead of having a gift card to Chipotle, where that's great if you want to eat Chipotle, you can't walk into Cheesecake Factory, you can't walk into Starbucks and use that Chipotle gift card. That's what a fixed points or miles system is like. Instead, let's say that someone gave you a$200 Visa gift card. Great. Now you're hungry anywhere that accepts Visa gift cards as cash or as currency, you can go and you can eat there. That's like what a transferable points or miles system is like.

23:50It just expands your options exponentially. Oftentimes, especially for people in the beginning, if the only credit card they've ever had is an airline credit card or hotel credit card, I usually say, that's okay. That's great. You don't need to close it down, but let's make it a priority to find one really solid transferable points earning credit card for you to bring in and really have that as your mainstay credit card because the choices you're going to have for how you use your points when you are ready to travel, that's going to be critically important. And that's kind of coming back to this idea of flexibility.

24:23Airline and hotel points and miles are not flexible. Transferable points are exceptionally flexible. Yeah.

24:30Jonathan Mendonsa:That aligns with, again, going back to the 2017 version of Travel We talked about these transferable points. And I always started with Chase Ultimate Rewards points. Yeah. I just found that the transfer partners for me, and again, this is why this is very personal. There's no monolithic advice. For me, I looked at Chase Ultimate Rewards and said, okay, United. I fly United a lot. Southwest, I use that a lot. British Airways, and that's something maybe we could come back to. I don't know if that's still as great of a sweet spot as it used to be back in the old days and then Hyatt Hotel. So I'm like, damn, these Chase points are fantastic.

25:06Jonathan Mendonsa:For me, that was a slam dunk. And maybe I advise that too much to the exclusivity of, hey, you should start with that. But transferable points have proliferated in the intervening years. It used to be basically it was Chase and Amex membership rewards were the two big ones. But even Capital One has over a dozen transfer partners. This has been, I think, one of the most interesting changes, evolutions in this landscape over the last 10 years. I agree with you 100%. When I started this, Chase and Amex were really the very strong, kind of ubiquitous, really powerful, really useful transferable points currencies.

25:41They both issue many credit cards. You had a lot of options for what's the best fit credit card for you. They both issue personal and business credit cards. So particularly for business owners, it was really nice to have an option in either one of those currencies to really consolidate a lot of your points and a lot of your cards within one transferable point system. City and Capital One existed, but they looked nothing like what they do now. Those two programs have increased incredibly, both in terms of the quality of their credit cards and the quality of their transfer partner menus over the last 10 years that they are now very strong contenders for very powerful points currencies, depending, again on what it is you're wanting to do with your points.

26:22But then having built this brand new points currency that came in in the last couple of years, I also mentioned Rove, which is very, very new. We now have more options for the different types of transferable points currencies that are available to us than ever before, which I think is a good thing. And it can also feel a little overwhelming to try to wrap your arms around it from the beginning. Before, it really did feel easy and true for me to say, start with Chase. This is such a great beginner points currency. They've changed a lot of their rules around credit card eligibility recently. Also, I think the utility of their points specifically, they have not been as innovative in terms of keeping their points options as strong and new as some other credit card currencies.

27:06So it's not that I don't think Chase is great anymore. It's that it no longer has kind of the predominance that it certainly did 10 years ago, especially with Built coming in. You talked about the transfer partner menu of Chase and why that was so attractive to you. United, Southwest, British Airways. Built has come in, in my opinion, as a direct competitor of Chase because their transfer partner menu most closely mirrors Chase. So for the people who always loved Chase for the ability to transfer points to Hyatt hotels, for a long time, Chase was literally the only transferable points currency that gave us access to Hyatt.

27:42Built came in. Now we can access Hyatt with Built points. And Built has been, I think, very strategic, especially this year. They introduced three brand new points earning credit cards. I think that they are a very, very strong competitor to Chase. So, yes, it's not the same old advice that we've always been giving, for sure.

28:00Jonathan Mendonsa:Speaking of built, I know when they first came on the scene, they were famous for, hey, you can pay your rent with a credit card. Is that still true? So this is closing the second of three loops that I've opened up. Is that still true today? Are there ways to pay mortgage and rent with a credit card? Yes. What is true is that you can earn points for your rent payment using the built system. When built first launched, they only had one single, no annual fee personal credit card, you actually did use that credit card to pay your rent. So when you would pay your rent, that would come off of your credit limit on that card.

28:37And then Bill could either pay your landlord directly or by ACH or by check. And this was revolutionary because, again, when we look at our personal expenses, for so many of us, our single highest, if not one of the highest costs that we all have is housing. I know that as someone who bounced around for all of my education. I was always in major cities. I grew up in Southern California. I went to undergrad in the Bay Area. I spent years of training in Boston. These are expensive to live in cities. We would always just pay our rent with checks. When Built came out and actually made it possible to earn, again, transferable, valuable transferable points for rent, this was, I think, a huge advancement in the points and miles space.

29:16Now, what happened is they elevated that earlier this year. They came out and they actually sunsetted their original no annual fee card. They introduced three brand new points earning credit cards at different tiers, different annual fees, you can still earn points for paying rent. It's a little bit of a different system. You don't actually pay your rent with the credit card, but you do earn points for your rent. But then they also introduce the ability to earn points for your mortgage payments. And so again, even if you don't want to become someone who's pulling out three or four different credit cards, one for dining or one for travel, if all you said was, I want to turn my housing payment into points.

29:53You have a way to do that. I think that that is an exceptional advancement for those of us who started to get frustrated. Those of us who really are down deep in the rabbit hole and want to optimize everything to have something like a housing payment and not easily, not easily be able to turn that into points had long been a frustration. So there were always these, I don't want to say secret, but there were always these more convoluted methods that you could use multi-step methods to turn your housing payment into points. I think the average consumer doesn't want to do that. They don't want to turn their mortgage payment into a five-step process.

30:29They want simplicity. They want it to be straightforward. And Build is the most simple, straightforward process that we have for that now. Okay.

30:36Jonathan Mendonsa:Fantastic. It's funny. Of course, I know about Build, but I haven't opened a Build card. I haven't really looked into it. I held off on Build for a long time. As someone who really loves doing this and I'm all for trying out new card products, seeing how they're going to work. I don't have a problem having a large credit card portfolio. It's very fun for me. I never got in to Built when they first came out because by that point I was a homeowner. So I didn't have a rent payment. I had a mortgage payment. So the Built card itself in its original form was not terribly useful to me. And as a points earning card, the card also was not as powerful as some of my other cards, coming back to that conversation about really prioritizing cards with strong bonus categories, there was never a great argument for me to use the built card for everyday spend.

31:20That changed for me when built introduced these brand new cards in January. So I was a holdout for many, many, many years. And they finally got me with the brand new cards that they introduced in January. I am a reluctant built lover. Now there are things I don't love about the way that they've structured their program, but the quality of the points and what you can do with them, you just can't argue about the value of bill points.

31:43Jonathan Mendonsa:Okay. Wow. This is fantastic. I love that they have Hyatt as a transfer partner as well. I am a gleeful renter right now. That's really half of my life expenses now go to rent. So I need to really start looking into how can I earn some points on these things. Okay. You mentioned something in passing about kind of it's become a little harder to get cards they're now issuer restrictions i mean famously and again this is going back this has been many years at this point but chase 524 they're now once in a lifetime quote unquote once in a lifetime and i'd love for you to dive into that restrictions on opening cards they're now hey if you have this card from a certain brand or a certain line of cards you can't have this other one again in the old days circa after 524 came out, Chase 524, it was the advice clearly was, all right, your first couple of cards, if not your first five cards should be Chase cards, because those are the quote unquote best cards and you don't want to get shut out.

32:44Jonathan Mendonsa:I suspect that's old time advice in my own brain. So what's the state of play in 2026? This is one of the more wild aspects of how things have moved in the last decade. And I feel like I haven't even been doing this for a quote a long time. I mean, I would read stories about the true wild, wild west when people would apply for seven credit cards in one day, they'd get every single one of them. And then you could get the same credit card 20 times. You know, you just get the same one over and over and over again and still earn the welcome bonus. You know, I think that's such a great example of, I've heard this when I was practicing medicine and going through medical school.

33:14I feel like everyone has some version of, oh, it was so much better 10 years ago or so much better 20 years ago. And I don't think that's true. I think every single time point, there are things that are amazing about it. And then there's also limitations. I think that's true in points as well. But certainly what used to be true is that it was much easier to get approved for certain credit cards, to get approved for multiple credit cards. And we've seen this trajectory, especially with Chase and even more so in the last year, but we've seen this from other issuers as well. I think this is probably a direct response to wanting to limit the ability of people to only sign up for credit cards for the purpose of earning the welcome bonus and then never use those cards again.

33:55We have to remember that credit card issuers, where are they making their money, right? How is it that these products are solvent so that they can continue to offer things like credit cards and credit card rewards? Now, certainly, which will not apply to anyone in this audience or community, credit card issuers earn a lot of money from people carrying balances and the extortionate, truly obscene interest rates that US credit cards are allowed to have. So that's one aspect of a revenue stream for them. Again, that won't happen to anyone listening to this call, but there's also merchant interchange fees.

34:24So every time you swipe a credit card, So money is being generated from that, even if as the consumer, you're paying off your statements in full every single month. And so credit card issuers, I think, have started to respond to, you know, this movement towards people really favoring brand new credit cards, but then not holding them for the long run, not putting regular spend on those cards outside of that period of when they're earning the welcome bonus. we've seen some significant restrictions around credit card eligibility. And you mentioned Chase, they now, even within the last year, have started introducing in more rules where kind of American Express-esque language, where Amex has always kind of been famous for this quote, once per lifetime rule, where Amex has said, you are eligible to earn the welcome bonus on a specific credit card product once in your lifetime.

35:11So if you get that card, then you decide down the line, you no longer need it, you close it down. If you try to apply for it again, they might give you the card, but you're not eligible to earn the welcome bonus anymore. So that really limited the velocity that some people had for earning a lot of welcome bonuses in Amex. Chase has started to institute some of that same language around their Sapphire products. On the business credit card lineup side, Chase has two no annual fee business credit cards that are really wonderful business credit cards. They, for the first time, have introduced language where you're eligible for the welcome bonus on one no annual fee card once.

35:45So you can actually hold both of those credit cards as a business owner and use them. It used to be that you could earn the welcome bonus on both of those cards. Now Chase is saying no. And I think that this is really highlighting the importance of being deliberate about what cards are you applying for at what time. I don't think it makes sense just to run out and apply for a credit card because you read a blog article or you heard a friend say, here's some random card with a high welcome bonus. You really, you should do a little bit more research than that. But then also coming back to that point about welcome bonuses are great and they are important, but let's also make sure that we think strategically about what are the cards that are going to be the most useful for us in the long term, because it's not the scenario anymore where you can easily go out and get approved for 10 credit cards in a month or the same credit card over and over and over again from the same issuer, then credit card companies are really wanting to push consumers into more loyal behavior.

36:40Get our credit card, but keep it. Use it. Put spend on it. I think that it is nice to do at least a little bit of research in the beginning to say, if I want to start with one of these transferable points currencies, again, maybe it's not the knee-jerk reaction to start with Chase anymore, but let me pick one that I think is going to be a good fit for me and start there.

37:00Jonathan Mendonsa:okay i definitely want to dive into an example of somebody who let's say they spend two thousand dollars a month each month on their card they're a five person they're trying to put as much on their credit card each month but they're not a business owner when you say a hundred thousand dollars a year is that like the rack rate so like if you're getting a first class flight that might have cost twenty thousand dollars but you probably wouldn't have spent twenty thousand dollars in cash on the flight if you didn't have points. Do you consider that rack rate for what goes into that calculation? I love this question.

37:33I feel like this is another big controversial point of discussion in the point of my life, which I love. I'm like, let's talk about this. Point of clarification is that you're using some somewhat outdated information. So because I am compulsive and I do this professionally, I track everything. What am I earning? What am I spending? The last two years, I've actually used points to book around$250 ,000 worth of travel each year. And again, I travel solo. I travel with a family of four. And I'm old. I'm picky. We do tend to travel premium cabin when we fly internationally. Now, let's talk about this number because I think this is such a great point.

38:09I think there are a couple of misnomers in the award travel world. And I think a lot of this too, especially with social media, becomes very clickbaity. How do We talk about what we do so that people pay attention. And again, I'm old and ornery. So I'm like, no, let's just tell the truth. First of all, I don't consider award travel free travel. I think there's certainly a way that you can do it where you defray as much out-of-pocket cash cost as possible. But especially when we're talking about something like booking flights using points, every single airline, even if you're paying, quote, completely in points, they all have some element of a cash cost.

38:44This is usually taxes, fees. Some airlines have what's called a fuel surcharge, which we're certainly seeing now, where this is out-of-pocket cash you have to pay even when you're using your points. It can be very low. It can be $5 per flight. It can be very high, over$1 ,000 per person per flight. So number one, I personally have never thought about award travel as free travel. I've always thought about it as, how do I take my existing travel budget that is a cash-based budget? How do I actually 10x that or 20x that using points. But it comes back to this question of what exactly are you getting?

39:15Are you saving X number of dollars in travel? No, because to your point, I personally would not be choosing to spend$100 ,000,$200 ,000 of money on travel. The reason I love points so much is I don't have to make that decision. Actually, the way that I found points in miles was when I came out of my medical training, I had no financial education. No one talked to me about it growing up. I knew nothing. I was terrified because I didn't want to mess up money as an adult. And I was starting so late. Most of us who come out of medical training, we're in our early thirties. We maybe haven't started saving for retirement.

39:47We've been making less usually than minimum wage during our training because we work 80 or 90 hours a week. And the reason I found points and miles is because I started getting educated about personal finance and I found it through the FIRE community. And I like these distinctions about like, what are we actually talking about? I think the way that we use words matters. And so I don't think about using points as quote, saving X amount in travel. I think about it as I booked X amount of value in travel and we have to hang our hat on something for that value. So how do we know that? Or how do I come up with these random numbers, right?

40:19I, I booked an X value flight or I booked X value of travel last year. The way that I think makes the most sense to do it. And not everyone agrees, which I think is wonderful. We don't all have to agree on this is that I look at the real flight that I booked, right? So most recent, actually, the most recent trip I took, this is something that no normal person would do. And I fully acknowledge this. This is entirely a strange points person thing is each year, starting last year, I have two kids, my oldest is 10, my youngest is seven. I had told both of them if they wanted to, I'm not going to force them if they wanted to, I would take each of them on a solo trip every year.

40:55And we could talk about what would they want to do for that. I have some veto power, but I really wanted them to get to do whatever they wanted to do. My 10-year-old, who has transited through Frankfurt Airport before, had said, can we fly on a Lufthansa 747 in first class? Because on that airplane, it's a two-story airplane, first class is in the nose, the very front of the cabin. It's an extraordinary experience. There's so much more about flying Lufthansa first class out of Frankfurt that's really exceptional. And I said, well, if I can find points flights, sure. This is what my points are for.

41:27Let me make memories, tell me a beautiful experiences with my family. So we flew from Chicago to Frankfurt on a Friday that he had off of school recently. We spent the night in Frankfurt. Next morning, we turned right back around, got on our Lufthansa first class flight so we could fly home so he could fly, you know, in the front of a 747. And it was amazing. It was such a beautiful experience and memory. Now, would I ever pay cash for a one-way Lufthansa first class flight? Personally, probably not. I mean, maybe if I won the lottery and I literally had hundreds of millions of but I don't think that's going to happen because I don't play the lottery.

41:57But at the same time, if I was going to book that, I mean, Lufthansa has assigned a cash value to that flight, correct? If someone wants to book that ticket, Lufthansa is going to say, this is how much it costs, take it or leave it. Now, to me, it's irrelevant whether or not would I pay cash for that? Because the vast majority of what I book using points, the answer is no, but that still has real cash value. So the way that I calculate it is what would the cash cost of this flight or this hotel be? What did I pay out of pocket in terms of my cash cost? If it's a hotel, that's usually zero. But for a flight, there are going to be taxes and fees involved.

42:33How many points did I actually need to book that flight? And then I do a calculation where I say based on the cash cost of the flight minus the taxes and fees that I actually paid, compared to the amount of points I used to book, how many cents per point in value did I get out of my points. Like every single one of those points I used to book that flight then has a value for that specific booking. That is how I do it. I've heard arguments where, well, we all know this. You can look on Google flights. You know, the price of a one-way flight is going to be grotesquely elevated compared to half the cost of a round-trip flight.

43:07So some people argue, well, even if you're flying one way, you should only take half the cost of a round-trip flight. I don't think that's the wrong way to do it. But the fact of the matter is I'm not flying round-trip. And one of the beauties of points is that you can book different legs on different carriers. We didn't fly Lufthansa on the way out. We flew on KLM, totally different program. I used a totally different type of points to book those flights. Again, some of this is semantics, right? I mean, there's no actual right answer, but I think these are the interesting conversations and discussions we get to have.

43:37That's the way I calculate it. And yes, just again, for the record, it's not like I would ever pay that in cash. but someone who does have cash or a corporate traveler, their company is paying that. So that is how much that hotel costs for that given trip. Yeah.

43:51Jonathan Mendonsa:I think words clearly matter. And I love the way your mind works because just hearing you talk there for the last couple of minutes, I'm like, this just appeals to me. And I think it's going to appeal to a lot of people in the FI community because yeah, we do think a, there's not one right answer to anything. That's pretty important. Like People even ask about savings rate in terms of the FI calculation. And you can easily get bogged down in, is it after tax? Is it before tax? How do I count Roth contributions versus traditional contributions? And it's like, okay, let's take a deep breath and just come up with a methodology that works for you.

44:26Jonathan Mendonsa:But how are you earning all these points? Is it mostly from your business through everyday spend? Let me step back. Let me take this in two pieces. So in terms of how many points am I actually spending on an annual basis? The last probably two years, it's been a lot more than it was before because post-pandemic, we're finally getting back into travel. And my family does enjoy international travel. So that costs a lot more points oftentimes than domestic travel does. And so again, last year, I mean, I also travel quite a bit. So just for context, last year, we took our kids to Paris for their spring break.

45:01I went with a girlfriend to Hong Kong and Tokyo over the summer. This was purely a business trip, which again, is not going to apply to the vast majority of people. In July, I did a ridiculous thing where I flew from Chicago to Emirates to Paris to Munich back to Chicago in about three days because I specifically wanted to try these different airlines and airplanes. And then my family took a summer trip to Europe, the four of us. And then we spent my kids winter break at a new hotel that had just opened in Cabo. So all of that was on points with, again, paying cash for taxes and fees for airlines.

45:35But the hotels were entirely booked with points. So there was no out-of-pocket cash cost for the reservation itself. For me, that was kind of a typical year. So you can see multiple international trips. Again, when we travel with our kids, I usually do prioritize flying business class for the four of us. So I want to acknowledge all of these things. That may not be the way that other people travel. And so for us to book that kind of annual travel, I usually average in terms of the amount of points spent, usually 3.8 to 4 million points in one year, right? That's a lot of points. You're not probably going to earn that signing up for three or four brand new credit cards.

46:12but I think it's so great that you were talking about these two different trips that my family took to Japan and what you took to Japan. I will also say it costs a lot more to travel with a family of four than if you're predominantly traveling with a partner or you're doing solo travel. But in terms of points earning, I usually earn on average around 6 million points a year. And again, let's put caveats and all the asterisks around this. The background is, again, my husband and I are both business owners and we have businesses with legitimate spend. So there are businesses you can easily qualify for a business credit card.

46:44Let's say you're planning to write a novel. You can apply for a business credit card and you'll get approved for that. That business probably does not generate a significant amount of expenses. My husband is a self-employed physician. He runs his own medical practice. I have a full-time business, my points consulting service, and I have educational products. So we both have multiple six figures of expenses from our businesses annually. That is very, very easy to leverage. And we also have our personal expenses. So I do, like I said, we use Bilt for our mortgage. We have quarterly estimated taxes, whether you want to count that business or personal.

47:20I mean, it's still money that we're spending every single year. And I leverage that to earn points. And so we do have a high level of spend. Absolutely. Let's acknowledge that. And if I didn't know what I know about credit cards, if I had one business credit card, one personal credit card, and it was earning, again, the baseline kind of one point per dollar spent, I would earn a tiny fraction of the points that I earn on an annual basis because so much of our spend is earning bonus category points. We also bring in other points earning mechanisms. I don't know if you've ever talked about shopping portals like Rakuten on your podcast.

47:57Jonathan Mendonsa:Very little. Very little. This is such an interesting conversation for the FI community because I think maybe more than a typical cross-section of random Americans. People love to solve puzzles. They love to optimize, right? They want to solve that puzzle of, wow, if I can turn one into 10, what would that actually take me? The points community is a little bit similar. I don't feel like I personally am chasing down every single last point. I'm also not using every single credit card on every single, excuse me, every credit on every single one of my credit cards. It still has to be something that's useful for me, but there are a couple of very, very high impact things that you can do, again, to dramatically boost your points earning.

48:34I know what those things are. And that's where I put my time and effort. What I don't want people to walk away hearing is, oh, I need a business in order to earn a lot of points or my personal spend needs to be exceptionally high. That's not true. If it is, then great. You're in a wonderful position to take advantage of that. And also, you can earn certainly. I have people in my community. I run a community of 30 ,000 women physicians. I have had thousands of people come through my online courses. So I have a good view of not just I'm not the standard, you know, by any means in anything. But I have so many people in my community who are easily earning one to two million points per year.

49:11Again, from being strategic about the credit cards they earn, especially for folks who do have a partner where we can get into talking about what does it look like for two adults in a partnership to be strategic about both earning points using credit cards to refer to one another. kind of building out a more kind of inclusive type of credit card portfolio that two people can participate in. There are so many different ways that you can easily, again, without going completely off the deep end to really boost your points earning.

49:39Jonathan Mendonsa:Yeah, this is really important because when you're saying, hey, I earned 6 million points per year, roughly 500 ,000 points per month. It's like, okay, well, good for you. But as you quickly followed up, hey, without the shopping portals and the category of bonuses, among other things, but specifically you delineated those two, I would have earned a fraction, a tiny fraction, you said, of those 500 ,000 points a month. That means, again, for optimizers who are listening to this podcast, you can really help juice these earnings by being smart, by being intentional. We're going to have to do a deep dive if you don't mind.

50:15Jonathan Mendonsa:I've loved to have you on the podcast so many times. I'm like chomping at the bit now to do episode two through 27. I think we need to do at least a segment on those shopping portals and category bonuses. That's going to light up the pleasure center of people's brains here when they're hearing that. Because circa 2013, in the early days of travel rewards, it was just these guys, basically it was guys in their 20s who had no job. Drinking champagne, great for them. Good for them, but what about the rest of us? What about those of us with families and jobs and et cetera. And it's just, that just never appealed to me.

50:51Jonathan Mendonsa:And I think it really turned people off. And I think that's what the early days of the five community where you had some more extreme people who fit just a certain tiny little niche of, Oh, it must be nice for them who are making a lot, but they're really extreme. Like$20 ,000 a year, which again, you know, when I first found Mr. Money mustache, I was like, these are fascinating concepts. And also at that time, I assumed, well, I'm going to have a traditional job until I'm 65. So I probably will have more disposable income to play with. So I didn't see myself in that traditional kind of phi archetype, just like you're saying.

51:25Jonathan Mendonsa:Exactly. And I think it's so important to see yourself or to at least see a path in a story. So yeah, I love that you dove into it. And I want to point out just one thing because again, while it's totally true, I'm not making up the numbers of points I earn or how I use them. It's not this binary thing where, okay, you're in a partnership, you both own businesses, you earn this amount of points. If that's not my situation, then there's no point. I have no opportunity here. I'm going to earn nothing. This is not a binary whatsoever. And I think there's so many parallels between the people who do so well in points and miles and people who are really invested and educated in personal finance.

52:02And I say that because when I was first learning, I mean, I knew nothing, nothing about finances, about financial responsibility, nothing until my early 30s. So I started at the very, very bottom of the ground and I had to learn all of the things. And I remember, you know, you read kind of the foundational elements of personal finance and, you know, why is it beneficial if you do have money left over after paying all of your expenses to do something like invest in a retirement account? What is the benefit of potentially, you know, if you max out your retirement accounts, then putting money in, you know, a taxable brokerage account.

52:38And I feel like within the world of mainstream financial education, nobody questions that, let's say you've got$10 ,000 at the end of the year, you could leave it in an envelope in your wall for 30 years. Like my grandmother who grew up during the depression and didn't trust banks did, right? Like literally people used to do that with their money. They would keep it at home because at least it was real and it was there. I think we would all argue, maybe not the best return on your investment. The money is going to lose value, certainly over time. Then we take a step up. Then someone says, well, why don't I just put that money in a checking account or a savings account forever and ever and ever?

53:13Certainly they could do that. And we would argue, okay, that's probably going to have a better return than leaving it in an envelope in your house somewhere. But also, what if you just invested it in a low-cost index fund? What if every year that money that you had, you put it in an S &P 500 index fund, you didn't touch it, you let it grow for 30 years, what would happen? We've all seen those compound interest calculator curves that we all love them, right? How many of us check those all the time? You know, what about now? What would my net worth be now? You know, and I was so fascinated when I was learning about these kind of foundational elements of personal finance.

53:49At the same time, for me, I was a very, very junior employee in a medical practice, but it was a physician-owned medical practice. So the partners, the senior partners of my group, you know, they owned everything. They owned the building we were in. It was a laboratory. We had a lot of expensive equipment to run in medical grade testing. They would have conversations about, should we bring in this new piece of equipment? If we do, should we rent it or should we buy it? It's$400 ,000. Should we just do a bank transfer? Should we do this? And I'm sitting here learning about credit card points and I'm thinking, oh my gosh, this is the equivalent, like paying for all of your expenses with a debit card, with checks, with an ACH transfer.

54:24This is the equivalent of my grandma having her life savings in an envelope, in a wall, in her house. It is not bad, but it is such a missed opportunity. And it was so fascinating to me that, again, I feel like it's become very mainstream in the financial education community for us to say compound interest, right? None of us knows exactly what the stock market is going to do. And yet we have enough collective faith. the money we put in today is most likely going to grow and outpace inflation over time. And I look at all my expenses the same way, that these are little baby assets and I can leverage them.

54:59I can buy the things I need and get no points for it. At least I have the things I need. But I can also be really smart about this and I can pick great credit cards and I can turn these expenses, maybe not into 3 million points, but I can turn these expenses into a couple hundred thousand points and even those can have significant value. If that gets you$5 ,000 of travel a year that you don't have to pay cash for, how would that change the way that you think about travel and plan travel? And I'm just doing this at scale, right? I know that I'm probably not your average user, but there's everywhere in between.

55:33There's people getting$200 worth of value from their points annually. And there are a lot of people getting multiple tens of thousands of dollars of value from their points annually.

55:42Jonathan Mendonsa:You've painted this picture beautifully, that this is really accessible for everybody at your level. Okay. How can we try to get as many of our life expenses on credit cards as we can while maximizing shopping portals and category bonuses and such, of course, with the caveat pay on time and in full every single month and put together a trip or multiple trips. And I wanted to pivot into that first trip. So somebody who, again, is they've been on the sidelines. How long would it take to go from zero to your first nearly free trip? How would you know where to start? Do you start with, hey, I live in St.

56:22Jonathan Mendonsa:Louis or something? Do you look at your local airport? Do you look at the destination airports for the airlines as you're flying? Do you think about hotels or do you just start earning with these transferable points? How long would it take for them to get started with this? acknowledging that we cannot possibly make a totally inclusive answer here, which kind of drives me crazy because I want to go through the 29 ,000 use case scenario, but I'm not going to do that. How real could this actually be? I don't think anybody wants to pour time, effort, allocating their expenses in a little bit of a different way.

56:56If it's going to take six years to take a single trip, I wouldn't recommend this for anyone if that was the truth. Again, I think for someone, let's take that person who's spending$2 ,000 a month on expenses they could be putting on credit cards, I'm going to also go out on a limb and say, let's say that person is partnered where there's another adult in their life who's also in a financial position to pay off all of their credit card statements in full every month. They're also interested in maybe getting into this hobby as well. I think those two people, again, conservatively, I'm not talking about the version I would do now with 15 years of experience, talking about the brand new version.

57:28You each get one new credit card, a very well-determined credit card. You put all your expenses on that. you could easily be sitting on 400 ,000 points within three or four months. Now the question is, okay, but what does that actually mean? What do I get out of 400 ,000 points? You could actually do a lot. Let's say you picked one of those built credit cards or a Chase credit card. Again, I have no financial incentive to recommend any specific card because I have no affiliations with any cards or issuers whatsoever. But I'm thinking about what are still some of these core first cards that I think it makes sense for people to consider.

58:05then you have access to those transfer partners. And this is a piece we haven't even gotten into. This could be a whole entire podcast episode on its own, but what you do with your points is also why I've been able to extract so much value from them. Credit card companies do not tell you the best way to use your points. If you have any cards that have ever earned points, you're probably familiar. You log into your account. Maybe it's an American Express account or a city account, Capital One. It tells you you have 110 ,000 points. These points are worth. And it'll say something like$1 ,000 in travel or you can turn them in for$600 in Amazon gift cards.

58:43And you're thinking, oh, okay, that's great. That's better than nothing. Why not? What your credit card issuer is not telling you is that if you're ever gonna redeem your points, again, through the options they give you, cash equivalents, gift cards, booking travel through their specific, credit card travel portal site, booking a flight, a hotel, their points are going to have a very low ceiling of value. You are never going to break through that ceiling. But remember how we talked about transferable points are so amazing because they have this whole menu of airlines and hotels where you can actually move your points out of your credit card and into, let's say, your Hyatt loyalty account.

59:17Depending on the points you have, you can move them into a Hilton loyalty account. You mentioned British Airways, Air France, all these different airlines. That is where, once you kind of learn again how to do this, you no longer have that ceiling or that cap on the value of your points. So if you, let's say, earn those 400 ,000 points and you only use them the way your credit card company tells you you can use them, okay, maybe that's going to be worth 1%, 1 cent per point. That's kind of what you can look at, 1 to 1.5 cents per point. But when you learn really how to move them out, all of a sudden that ceiling expands.

59:52You can get anywhere from 2 to 5 to 7, maybe 10 cents per point. So for people who've said, gosh, I've used my points before, they never seem to go very far. Part of the conversation always has to be not only how are you earning them, but how are you using them? Because I would never get, I wouldn't get a 10th the value that I get out of my points if I only use them the way that my credit card company told me I could. I get all my value from my points by transferring them out to transfer partners. So for that beginner person. Let's start you off with one solid transferable points earning credit card.

1:00:25Put your expenses on that card. Let those points balances build up. You will likely earn a welcome bonus, assuming that you meet the spend requirement that the credit card issuer tells you about. Within four, five, six months, especially if you have a partner you're doing this with, you're going to have a couple hundred thousand points. So an easy place to start. Let's not go to the expert level advanced use case scenario, hotel stays are actually very easy places to start. And Hyatt is such a great example. So let's say you have a built card or a chase card. Those are the flavors of points that transfer to Hyatt.

1:00:56It is so, so easy to find Hyatt hotels. Again, they have some beautiful ones domestically. You don't have to leave the country. You certainly can if you want to. And you can use your Hyatt points to book a hotel stay. So maybe you're still going to pay cash for your flight to that destination. No problem. But you can easily turn those Hyatt hotel points into an incredibly valuable stay. Airlines and using points for flights, I do find that to be somewhat of a higher learning curve than using your points for hotels. But there are still easy places that we can start with flights as well.

1:01:30Jonathan Mendonsa:I wanted to touch on something that you mentioned a couple times. And it actually ties back to a question I asked earlier, which was around restrictions. I think a lot of people get bogged down with the different products. And I know it has changed a little bit. Chase, for instance, they now have these rules for the Sapphire line or now these business credit cards. And it's not limited to Chase, of course. But a lot of people get confused when it comes to a spouse or significant other and opening up a card and getting a bonus in terms of these different products. Can you talk a little bit about that?

1:02:04Jonathan Mendonsa:Because this is really, really important, especially because it can, even with like authorized users, I suspect we don't advise that in today's day and age, all cases, because there are limitations, but just paint a picture of that general theme of like, okay, Hey, I am an authorized user on my spouse's card. Can I get the bonus as well? How does this all work? I think it's so interesting because this specific area of points and miles is such a great example of how drastically different things are when you are specifically wanting to build out credit cards for the purpose of earning rewards versus what I would call typical human behavior.

1:02:39And I think typical human behavior is something like, let me get my one credit card, my for everything credit card. I put all my expenses on that. That's typical human behavior. Credit card human behavior is, let me be a little bit more strategic and maybe I'm going to have more than one credit card, again, matched up so that I can really optimize these bonus categories. Typical human behavior for folks who I see who are partnered is usually maybe, you know, partner number one applies for a credit card, gets approved, automatically adds partner number two is an authorized user. You both have, you know, quote, that credit card, but only one person is the primary account holder.

1:03:16That makes sense, right? Typical human behavior. It's simple, especially for people who are partner didn't have combined finances, simplifies things. There's no problem with that approach. Credit card behavior, very different, or points person behavior is very different. And the reason for that is that as to individual adults, and the assumption is that both people are eligible to apply for, get approved for US-based credit cards. Sometimes you may have a partner who doesn't have access to that system, but for people who have partners who all have access to the same credit cards. The difference is that each of you individually, you're eligible to earn the welcome bonus on every single one of these over 100 different rewards credit cards.

1:03:55So when you're starting to think again, what is the strategy here? If I open a brand new credit card and I make my spouse the authorized user, then I earn the welcome bonus for the one credit card, the one I'm the primary account holder on. The authorized user doesn't have their own kind of separate welcome bonus. But instead, if my partner and I both apply, and you can do this, we both apply for the same exact credit card, assuming we have enough upcoming expenses where we can meet the minimum spend requirement on that card. Now we've each earned a welcome bonus. So we've doubled the amount of points that we've been able to earn as a partnership as a couple, especially for people who are interested in travel rewards.

1:04:33I think it's really smart to think about, wow, what is our opportunity if we operate not independently and separate from one another, but we actually take full advantage of our both ability to apply for different credit cards. And I actually love the partnership model too, because there are some credit cards where it doesn't actually make sense for both partners and a couple to have their own version of a credit card beyond the welcome bonus, because there's no added benefit after the welcome bonus. But there are also certain credit cards where it actually makes tremendous sense for each partner to hold their own copy of it because of the ability to boost points earning or access to certain perks and benefits.

1:05:11And so if anything, if you want to take anything away from this segment of the conversation, it's that if you want to be strategic about points and miles, I don't think it's a great default behavior to just automatically make your partner an authorized user every time you open up a brand new credit card.

1:05:26Jonathan Mendonsa:You just said there are some cards where it makes sense for each person to have a copy of the card. Just can you give an example and like very concrete like why that might be the case? A hundred percent. So I can think of two use case scenarios. Use case scenario number one is if you have a rewards credit card that has an amazing bonus category, but the credit card issuer caps the amount of points you can earn in that bonus category on an annual basis. I will give an example of that in a second. But then the second reason would be if there's a credit card that has specific perks or benefits that only apply to the primary card holder and both people in a partnership actually want to have access to those specific perks or benefits, then it would make sense for them both to hold it.

1:06:06But let's come back to that first scenario. There are some phenomenal points earning cards, and these do tend to be the cards that have above average bonus categories. But the credit card issuer says, okay, you're going to earn five times points on this category, but only up to$1 ,500 spent per quarter of the year. After that, you keep putting expenses on that card in that category, you're not going to earn five points per dollar spent. You're going to earn one point per dollar spent. Great example of this. Chase has a no annual fee credit card. It's called the Chase Freedom Flex card. It's marketed as a cashback card.

1:06:40Chase also doesn't tell you that if you hold a Chase Ultimate Rewards points earning card, the Chase Freedom Flex actually functions as a points earning card. It's brilliant. The only problem with the Chase Freedom Flex card is that it has rotating quarterly bonus categories. That's not the problem. The problem is that those rotating quarterly bonus categories, again, they earn five times points, but it caps out as$1 ,500 spent. If the quarterly bonus category is something that you or your family tends to spend more than$1 ,500 on, in the past, they've had things like Costco as a quarterly bonus category, Amazon spend.

1:07:11Sometimes they have charitable organizations where in Q4 of the year, if you really want to do a lot of your giving in that one quarter, there's all sorts of different examples. So as a family, if you don't want to be limited to having one card with a cap on your five times points earning. Both partners could hold their own card. Each card can earn five times points on up to$1 ,500 spent per quarter. So that's one example. Another example, very, very popular rewards card. I still think this is a fantastic card for many people. It's a mid-tier card. So it's not low annual fee. It's also not obscene extortionist annual fee like we're seeing from a lot of premium cards now.

1:07:48It's an American Express personal card, the personal gold card. I love this card. It earns four times points on dining, four times points on groceries, categories that a lot of people tend to spend money on. The caveat is that for the grocery bonus category, you can earn four times points on groceries up to$25 ,000 spent per year. Now, there are going to be people listening to this podcast. You're like, I would never spend anywhere near that in a year on groceries. and they're also going to be people based on whatever their family situation is or their spend patterns are, maybe they are exceeding$25 ,000 spent per year on groceries.

1:08:23And so it can make sense if both partners have their own Amex Gold card, each one of them can spend up to $25 ,000 a year on groceries and get those four times bonus points. And so one of the things that I always recommend when you're thinking about bringing on a new credit card, one, you definitely want to look at what are the bonus categories. Let's just verify this is going to be a valuable, useful card for you, but read the fine print. It is the norm. I would say most rewards credit cards do not put a cap or a limit on their bonus categories in terms of how many points you can earn up to a certain amount spent.

1:08:56But there are a handful of cards that do. So you want to be aware of that before you go, I've seen people not realize that, blow way past a spend limit on a card and then look at a statement two, three months down the line and say, oh my gosh, I thought I was going to earn 3x or 5x on all this spend and it's only one what happened you know it's probably the

1:09:13Jonathan Mendonsa:card had a spend cap on it devin this has been genuinely fantastic i'm like chomping at the bit to do like i said episode two through uh 27 so let's do a whole series seriously if you will come back i would love to have you as many times as you'll be here if you can't tell i love talking about this like the best thing i get to do all the time it's tell people about rewards cards and truly not just what are they, why are they so great, but really showing this is how regular people can incorporate them into their lives and do meaningful travel that matters to them. Again, I don't want people to use me as an example.

1:09:46I know that I'm an outlier. You don't have to travel five international trips a year for points to be amazing for you. You could take an amazing domestic trip a year. That could be visiting your parents for Thanksgiving, things that you otherwise couldn't do. I think there's so many real amazing opportunities with points.

1:10:02Jonathan Mendonsa:Yeah, I wholeheartedly agree. And we are going to finish up closing that last loop, and I'm going to do it in a roundabout way. So the question was ultimately tools that you use, but I'm going to first take a moment and say, obviously, if you're listening to this podcast, you've heard how amazing Devin is. Listen to her podcast, point me to first class, check out her website. She offers a ton of free resources. Devin, you also mentioned a community of 30 ,000 women physicians. If someone fits in that category, how can they find out about that community? Go to the website because we have links to everything that I do there.

1:10:38So that will be the easiest place to kind of get connected into the podcast or into these different resources that I have. It's kind of a one-stop shop for everyone.

1:10:45Jonathan Mendonsa:Wonderful. Okay. Those are resources, but then I'm curious, are there one or two that jump out to you that amidst the noise of all the different potential tools that you absolutely think are essential? Yes. I think the wonderful thing is that there's no one perfect tool. So I think about the tools that help me in terms of organization, earning my points. And then I have tools that I think are very powerful for the redemption side. I'm not even going to get into that today because I have a feeling we might end up having more conversations about how do we really honestly use our points to the best of their ability.

1:11:17But in the beginning, there's a free app. I think it's fantastic. It's called Travel Freely. It's essentially a credit card organization app. So for people who want to be able to not have to use the old school spreadsheet like I do, but they want an app that will help them organize and categorize, it will keep track of the credit cards that you currently have. It'll send you great reminders about your annual fee is coming up due. Do you want to make sure that you keep this card or do you want to get rid of it? It really helps you track what are the functions of the different cards that you have.

1:11:48I think that's a resource. Again, it's totally free. Can't hate on a free resource. There's a paid resource that I actually use and love as well. It's called Card Pointers. It's also an app. It does things a little bit similar to Travel Freely in that it does help you organize all of your credit cards, but especially for people who end up bringing on some of those mid-tier annual fee, high annual fee cards, the ones that come with, they're called coupon books now. They give you credits for all of these different things. Card Pointers is fantastic for helping you keep track of all of those different benefits to make sure that you're taking advantage of the ones that you really want to use.

1:12:24They also do a great job of automatically activating all the card specific offers that your credit cards have. So your credit card might have spend$10 or spend$100 at land's end, get$20 back. You don't want to have to manually go in and add hundreds of these things to your cards. Card Pointers does all of that for you. So I think that it's super useful. I love both of those apps. And then there was one. Oh, I know we haven't talked about shopping portals in depth, but anybody who maybe already has some experience with shopping portals, if you do not use this app, you are missing out. It is my favorite thing that has come out in around the last year.

1:13:02The founder is exceptional. He's wonderful. The app is called SaveWise. I think you can also find it just online on the computer at like getsavewise.com. This is an absolute time time saver. If there's a place that you know you want to shop online, sometimes I have to get my kids, you know, new school clothes, something like that. I'm like, let me just type in the store I'm going to buy these from online. If a shopping portal, because there's many of these, there's over 20 shopping portals, you just get to earn extra points and miles for your online shopping. Get Savewise aggregates them all together.

1:13:35So it'll tell you if you want to shop at store A, here are the shopping portals that right now have bonus points. Let me stratify it based on the highest number of points. So it's just such an easy opportunity, again, to super boost your points earning. And they have a free version. They also have a paid subscription model. So depending on the functionality that you want, you can decide which one is going to be a better fit for you. They'll also send you alerts. So I have some favorite stores where if I don't need something imminently, great example, I do a lot of travel, tour and activity booking through the platform Viator.

1:14:07People are probably familiar with that. Now, there are times of the year, like yesterday, where Viator was offering through a specific online shopping portal, 20 points per dollar spent on tours. I will literally just keep a list in my phone. If I have trips coming up, we're going to go to place A, place B. I'll keep a running list on my phone of what are the tours or activities or even airport transport where if I'm flying with my family and I just want to book airport transport to bring us to our hotel, things like that. Book all of those through Viator, but I will not do it until they're offering some huge bonus portal payout.

1:14:43And that's fine. I can wait two or three months oftentimes to book those tours and activities. Yesterday, I'm telling you, 20 points per dollar spent. I booked out my transport, my tours, my activities for three upcoming international trips. That's money I'm spending on those activities no matter what. I'll earn points from the credit card I'm going to use to pay for those, but I'm going to earn an additional 20 points for every dollar I spent. This is not just about, oh, go out and spend an exorbitant amount of money. No, of course, you have higher expenses. You have more opportunities to earn points.

1:15:14But being strategic about what are those times of year where it's so much easier, you can take advantage of things like shopping portal bonuses. I earn a lot of points that way. That has nothing to do with the actual dollar amount of my expenses. Sure.

1:15:28Jonathan Mendonsa:No, I love that mindset as well. Well, I mean, that ties into something I've talked about for years, just with Amazon.com. So Camel, Camel, Camel is a great site. I think there are other ones that now exist that are more automated, though I know they have a plugin for your browser now. But I bought tons of board games and I would just plug them into Camel, Camel, Camel and leave them as an alert. And when they reach a certain dollar threshold of the price, because everything on Amazon, which is essentially everything in the world, prices vary so wildly that I don't need this today. Just like you said, I don't need these Viator trips and experiences today, but I need them probably sometime in the next four months before we travel.

1:16:10Jonathan Mendonsa:Okay. Well then if something pops up like that, great. Buy it then. I just, I think that's just encapsulates the five mindset. I think that's absolutely fantastic. So, okay. That was a great series of tools, even better than I could have imagined. And I love that you mentioned travel freely actually, because Zach, the creator is a longtime listener, choose a buy and a member of the five community. Wonderful guy. Travel freely and cash freely also. So we will have links to all of those things in the, in the show notes, of course, we'll link to your website. And again, point me to first class, the podcast you're listening to a podcast, just subscribe to that.

1:16:45Jonathan Mendonsa:It's fantastic. And I would be remiss if I didn't mention if you're looking for a travel credit card, choose a buy.com slash cards. As you all know from listening to the show, we do not advertise on the podcast. The only way we make any money is through that page. So if you're thinking about signing up for a card in the near future, just check out that page first. And Devin, this has been absolutely fantastic. Thank you so very much. I hope I'm renewing your interest in credit cards and travel rewards. I'm like chomping at the bit to get started. I'm going to listen to, I think you of 160 plus episodes.

1:17:19Jonathan Mendonsa:I'm going to listen to every single one of them. Thank you. This is awesome. Thank you so much. This was so much fun.