Thu, Dec 8, 2022, Credit card strategy for Seattle

 So now that I have a little more mental breathing room (and I got my work done for the week), I started giving more thought to travel hacking/ award travel.

I know it's popular in FIRE but after joining FIRE I wasn't really trying to spend money and I don't travel with much regularity. 

Plus I wasn't trying to dabble with credit cards outside of getting the cash rewards and immediately cancelling them. Even last year felt like a little bit of a wobble because had I not opened those cards for the cashback bonus, I unlikely would not have been able to jet off to Seattle quite as easily.

So this year, now that I'm actually planning my life out for a year and it includes travel. I was starting to feel overwhelmed so I wrote it out a bit. 

The key for me is not to think too far ahead for optimizing strategies, which is where I get lost in the weeds. I just focused on the next trip and up to the plans for next year.

So I knew I wanted:

1 card for airline travel - to get the free checked bag

1 card for 0% intro APR - because I plan to cash flow the trip as I am being paid (another post, maybe*), and lodging is pricey

I actually started clicking around a bit earlier this season and then more so last night. I was on reddit but starting to get lost in the acronyms and short codes.

So that's why I started with those objectives above.

I'm also limited by the fact that my nearest airport is a regional airport that only flies American and Delta.

Thus for my airline cards, my options are:

- AA Barclays (since I already got AA Citi's promotion within the last promotion cycle)

- Delta Skymiles card

This morning I looked into it and AA Barclays I get the impression might be harder to get, but because the spend is just any purchase for $60k bonus miles and it's already on AA, that's my first choice.

Delta is a close second because it's a low spend for 60k miles AND it's 0% intro. 

So with just those 2 cards alone, I would meet my goal.

- Airline card for free checked bag

- 0% intro Card

- and a fat sign-up bonus in miles (where I usually go for cashback)

My default for the 0% intro card was Fidelity cashback card since it has a $150 sign up bonus and 2% cashback on all purchases. 

Well my clicking also led me to:

- Chase Sapphire for their ultimate rewards which seems to be extremely popular with travel hackers

- Citi Premier

The issue I had with those is that I'm inexperienced using points for travel and it seems you have to go through a portal and transfer points to partner airlines. Considering I only have 2 airlines to choose from, I found this limiting. And I can't really check flights to see if my tiny airport would show up on their partner airline without creating a log-in. So that kind of deterred me.

Right now, the most sensible plan would be to apply for both the AA and Delta card for the bonus miles.

From what I can see so far, I have enough AA miles to travel at least 1 way for Trip #1. So it would be nice to have one of these cards to fund the other leg of the trip and accumulate more miles and get a free checked bag.

Again, I have a feeling I might get declined for AA Barclays, so in that case, I might still get the Fidelity card and/or the Chase or Citi card. But if I get a high enough limit on Delta Skymiles, the Fidelity card becomes less important since Delta is 0% and that's what I needed Fidelity for.

So if I get Delta and not AA Barclays, I'll try to apply for Chase Sapphire or Citi Premier. Both have big sign up bonuses, but I need to do research so see if one actually has miles I can use for travel. If not, I should still be able to get fat cashback bonus, which will be nice.

**Yesterday (or maybe the day before) I was also fretting about cashflowing my trip. Ideally, it would be easier to just save up the $20k for travel and spend from there. But there isn't enough time to do that by May with my regular pay.

So after siting down and estimating my paychecks, I think what I'm going to do is...

After maxing out 401k in Q1...

For April and May paychecks: just hoard that money in a Seattle Reserves account (this is mainly to help assuage anxiety about having money if someone falls in love with me and I decide to extend my stay); goal is with leftover bonus money to have 15k-20k+ saved.

Given my estimates, from Jun to Oct, I should be having a netpay (after recurring living expenses) of about $4k/mon x 5 months = $20k, which is the amount I budgeted for Lifestyle Expenses in 2023. And it just so happens to coincide with my trip dates. So that should help soothe the mental rumblings about overspending, and also the contradictory concern of not having enough on hand if I need to extend my stay for Love.

I just have to get comfortable with having that Reserves account sitting in Cash, but I'm actually okay with it because the savings rates are at least a little higher than they've been. If the market is really low, and I am tempted, I can always dump it into my taxable account since I will have already maxed out my 401k. So I can just reduce my contributions. So that's another lever.

But this tentative plan seems to meet all my needs/objective at the moment.

- Saving my default $36k/yr

- Having a plan to pay for my planned trips without overspending

- Having a back-up plan to pay for an extended stay for Love (and the accompanying permission to spend the money because the Reserves exist for this reason)

- And a back-up for that plan if the market is too tempting

These are the world's problems that are solvable, friends! I'm kind of excited to dip my toe in award travel; it is the tiniest of toes. I love planning for only good things instead of 10 million contingency plans for bad things. #softlife

Oh, as an added lever, if I do end up staying around NC for Nov and Dec, I can up my contributions back to 50% and take advantage of more tax-advantaged savings. Win!