personal finance

I Collected Hundreds of Thousands of Credit Card Points Over the Past 10 Years—But Now I Wonder Why

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I was 20 when I opened my first two credit cards. After months of research, reading blogs and tracking my credit score on Credit Karma, I decided to apply for two American Express Starwood cards, one business and one personal. The Starwood site was filled with rich images of hotel pools at sunset and promised free hotel stays. I was drawn to the bonus offer, which was something like spend $2,000 dollars and earn 50,000 Starwood Preferred Guest points. 

There was only one small problem: As a student at a Yeshiva in Maryland, I had very few daily living expenses and no real way to hit the spending limit required to earn the welcome bonus. So I decided to try a somewhat crazy plan I found reading credit card blogs while using the computers at my local public library.

The U.S. Mint sells some forms of currency, including coins, at cash value with free shipping, ostensibly so that small businesses can put the coins into circulation. I took advantage of this opportunity to "buy" money and hit my new credit card's spending minimum so I could earn the Starwood points to redeem for free hotel stays. Once the box of coins arrived, I deposited them back into my bank account so I could cover the bill. And voila, I was the proud owner of 50,000 Starwood points and fantasizing about taking a dip in one of those glamorous hotel pools — never mind that I didn't have a passport or any extra money to spend on travel. 

That was more than 10 years ago. Today, I've managed to amass so many points I've lost count. Over the past decade, I've used the points to take a few international trips to Japan and Vietnam and over a dozen domestic flights, but mostly I stockpiled them. I usually have somewhere between 8 and 12 cards open, depending on the time of year. I still like to look out for new bonus offers, mostly out of curiosity.  

But the pandemic has me — like so many others — living the remote life now. I'm in graduate school in Chicago, teaching classes over Zoom, with no flights booked anytime in the near future. And part of me wonders if my credit card point obsession was a folly. 

A hobby that turned into a job

This hobby of collecting points for travel started after hearing stories of friends and relatives traveling for free, or at a low cost, thanks to credit card rewards programs. I read blogs for a few months, doing a lot of research before taking the plunge into this new economic opportunity. It wasn't the hack aspect of the hobby that attracted me to it, but rather that it would afford me the ability to travel, which when I opened my first cards at 20, I'd never really done before because I thought it wasn't affordable.  

But over the years, collecting points has become more like a job, one that takes strategy and planning. I've found new ways to hit spending requirements to unlock welcome bonuses without using my own money. I've offered to use my credit card to purchase appliances for newlywed (and a few newly single) friends so that I could hit the bonus minimums. I'd buy their fridge or washer/dryer, and they'd reimburse me by PayPal or Venmo. I've done this at least half a dozen times — maybe Frigidaire should start paying me a referral fee.

The spending power of a good credit score

I've never earned a high income, but I've always made sure to have good credit. Credit scores have always seemed more important than income to loan gatekeepers. With the first two credit cards I opened in 2009, I had a total credit limit of $11,000, despite having no income beyond my minimum wage mailroom work study job. 

I'm privileged, as I learned about credit scores growing up. My cousin added me as an authorized user to his account when I was 19, so I could get a head start on improving my score. Although I've yet to make it into the coveted 800 club, I've danced around the 790s for quite some time. And that good credit score has allowed me to pursue the best credit card offers so I could collect more and more points.

For a long time, I really considered my credit card points to be almost like a nest egg. I have no other assets — no home or car. I live a fairly lean lifestyle: I don't eat out and I save scrupulously. My biggest vice is buying books, which I mostly purchase used. My apartment is filled with second-hand furniture that I've bought on Facebook Marketplace or inherited from friends. It's ideal for the lifestyle of someone like me, someone who is minimalist adjacent. I might be a digital nomad if I was more ambitious and open to uncomfortable sleeping arrangements on the road.

Is there more to life than credit card points?

The promise of travel and a passion for collecting more and more points is what has kept me engaged all these years. 

But this was all in the Before times. I'm writing this from my apartment, wearing a quar uniform of Crocs and chinos you can't see outside the scope of my webcam, unsure when I might feel comfortable getting on an airplane again and worried that when I do, my points might not have retained their value. I've collected them from different airlines and hotels, and I worry they could lose value as the travel industry suffers.

This whole coronavirus pandemic has me wondering if the past 10 years stockpiling points was a waste. Was there a better way I should have spent my time? 

My lean lifestyle and obsession with earning points now seem a little anachronistic. My nest egg's value is questionable at best, and anyway, I have nowhere to fly. As I settle into this new normal, surrounded with furniture I purchased for nearly nothing, with the value of my points slipping away, perhaps it's time to get a new hobby. Maybe I'll start collecting coins.

Check out: This 29-year-old bought a $60,000 Tesla with a credit card and earned an estimated $5,000 in rewards

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