If you’ve read our thoughts on the Tiller blog, you know that we believe what you spend is one of the most important decisions for your financial future. Spending that is not aligned with your goals can swamp a rising income or a great investment strategy. On the other hand, spending that is in sync with your goals is a tailwind towards everything else that is important to you.
If spending is your Titanic, then using a credit card is effectively arranging the deck chairs. It’s the wrong place to spend time and energy. However, when you are in control of your spending, the right card can give you an extra percent or two. Who doesn’t want that?
The choice of the right card is completely personal, but I’ll share today what’s in my wallet. We don’t carry a balance, and I like a slim wallet with as little inside as possible. I use a slim Bellroy Card Sleeve wallet and traditionally keep five cards inside.
Cash back on purchases, gas and groceries
The card I use for most purchases is the Citi Double Cash Card. It pays 2% back on every purchase, and I don’t carry a balance. Getting 2% back for every purchase is actually a darn good deal.
Before this card, I used a mileage card with our local airline, but I rarely received 2% of value from the miles I spent. Even when I could find a ticket for, let’s say, 25,000 miles, I would often be able to buy it with cash for $400. The quick math (400 ÷ 25,000) implies 1.6% reward.
The second card in my wallet is an American Express Blue Cash Preferred Card. This one carries a $95 annual fee, and we only use it for groceries and gas. The 3% gas reward is nice, although not enough on its own to justify the space this card occupies in the wallet nor the annual fee. This card earns it’s slot in the wallet because the first $6,000 of groceries earns a 6% reward. We easily spend $6,000 a year in groceries, which provides a $360 reward (or $265 after the annual fee).
It’s also nice to have a second credit card in the wallet just for backup if one card fails. Either of these cards stand at the ready for day-to-day purchases.
Say goodbye to ATM fees
Next in line is my debit card linked to our Schwab checking account. I use this one exclusively for cash at the ATM. Schwab, USAA, and a few other progressive banks with few or no branches, and great online tools, will reimburse for any ATM fees. If the ATM at the corner store nearby charges $2.50 to pull out cash, then Schwab refunds that back to me on my statement. It’s a great deal if you don’t need the benefits of a local branch, but prefer being able to use any cash machine without penalty.
What about the other important cards?
The rest of my wallet is filled out with a driver’s license and a work credit card. Those are the five cards. No other cards make it in the wallet. My Costco ID stays in the car. My health insurance card exists virtually, as a photo, in my phone. My bus pass card lives in my computer bag. I keep a few dollar bills and a blank check inside too, and that’s it.
We’re not compensated for any of these cards or products, and they’re not the right ones for everyone. But if you’re spending, you might as well find a card or two that gives you a little something back. What’s your favorite card? We’d love to hear it.
Peter Polson, Tiller Founder
Peter loves designing great products and creating tools and systems that help people live better lives. He was a founder and president of Junxion (acquired by Sierra Wireless) and later CEO at Dashwire (acquired by HTC). He enjoys most activities around mountains and water, especially skiing and hiking with his family. His kids gasp in amazement at the pennies he can magically pull out of their ears.