Why I just got a new credit card (and how I’ll use it)
Every one or two years, I decide to apply for a new credit card. It’s not because I need the credit or because I think credit cards are free money (NO THEY ARE NOT) or because I juggle my bills. None of that applies! In fact, I typically close a credit card before I apply for a new one. I currently have three, and frankly I will probably close one soon because I feel like three is too many.
So why did I just apply for a new card? Because every now and then there’s a sign-up bonus that’s far too good to pass up. Credit card companies and their partners want you to use their cards, which means they have to get their cards into your hands. And sometimes they will offer quite large incentives just for that purpose!
In this case I applied for a Hilton American Express (full disclosure: that’s my referral link, which means I get bonus Hilton points if you apply through that link. You will also get the same deal I got, though, which is detailed below). I like Hilton branded hotels and I like American Express, but the real reason I applied was because of the deal they’re currently offering. The two main points of attraction are:
- A $150 statement credit after my first purchase witht the card within your first 3 months (which offsets the $95 annual fee, plus an extra $55).
- And the150,000 Hilton Honors bonus points after spending $2,000 in purchases on the Card within the first 3 months of card membership.
Now, much like I keep up with baseline prices so I can recognize a deal when I see one, I like to keep up with credit card bonus offers so I know a good one when it pops up. There a few sites I check to help me stay up to date on this, plus I get occasional credit card offers in both my email and hard copy mail boxes.
In this case, this was easily the best deal I’d ever seen for a Hilton Amex. While this is a little more restrictive than a straight-up cash back card (e.g., I need to use the points for Hilton hotels/services/partners), I know that Hilton family hotels can vary quite widely by their point totals from place to place. Before I applied for the card, I checked out a few of my favorite places to travel to see if they had any Hilton family hotels for reasonable point totals and how far I could stretch those points. At 150K points, I had enough options to make the card attractive.
But I also want to point out that I have the option to get a new credit card for several reasons. First of all, I know that credit cards are not free money. I pay off my credit card bill in full every month. I realize that I am speaking from a position of privilege when I write that. I know not everyone has the means to do that, and I know that for some people, they have to use credit cards just to survive. For those folks, please know that I see you and I acknowledge what you are going through.
For everyone else, though, credit cards should be used just like money — as in, if you don’t have the cash to pay for something, you don’t have the credit to pay for it either. Believe me, I say this as someone who browses jewelry and clothing listings way more than she should. But if you can’t afford it with cash, you can’t afford it with credit. Sticking to that rule will go a long way to keeping your credit card bills manageable and small enough that you can pay them off every month instead of accruing interest at the sky-high rates most cards charge.
I can also apply for a credit card every year or two because I work hard to keep my credit score high. I check that score regularly, and I figure out why my score may have gone up or down at any given time. That gives me a high degree of confidence that my credit card applications will get approved.
And finally, I don’t do this very often. I don’t have a wallet stacked with credit cards. I‘m not trying spend bajillions to meet credit card bonuses every month (the Hilton bonus requires $2,000 of spending in the first three months, which is very doable for a two-person household living in New York). I know what I need to spend, I have an idea of how I will get to that amount, and I keep track of any other credit cards I might have at the same time.
I’m not saying credit cards are always a great idea. For some people, it can feed an unhealthy addiction. For others, it’s too abstract a concept to really think of as actual money. But if you’re in a good place — paying your bills in full, aware of your spending limits, able to keep that spending in check- — there are worse things than free travel.
