Optimize Your Card Portfolio
Optimizing your credit card portfolio is about acquiring and using the credit cards that maximize your return, whether that be cash back, points, status, building credit, or any combination of these.
Getting the highest return requires having and using more than one credit card. There are no credit cards that earn you 5x points or 5% cash back on everything, but there are multiple credit cards that get those returns in one or more categories. The more different cards you have earning those rewards in different categories, the closer you'll be to earning that level of return on average.
Optimizing your card portfolio does not, however, just mean earning the highest returns. There are other considerations, such as your tolerance for managing multiple cards, where your points are stored and what transfer partners the card issuer has.
On this page you will find:
The Complete Guide to Building and Optimizing a Credit Card Portfolio
Frequently asked questions
Our featured article
Optimize Your Card Portfolio -Featured Article
Frequently asked questions
How do you calculate the value of each card?
Based on the value that card brings to you. That value could come in the form of credits, points, cash back, status with airlines or hotels, or just helping you build credit. When considering credits offered by a particular card, consider the annual fee an offset to those credits, and only consider the credits if you would have spent that money even if you didn’t have that card. When considering the value of points, consider how you actually use the points. They can be stretched for greater value when used for travel rather than cashed in for statement credits.
Which credit card is the best?
The one that provides the best net rewards based on your lifestyle, spending patterns, and goals. A card that provides points is generally less valuable to someone who doesn’t travel than a card that provides good cash back. A card that provides points for a particular airline will have no value to someone who doesn’t fly with that carrier, but might have great value to a frequent flier of that airline. For that reason, we don’t rank or rate cards at Max Your Plastic. The best card for you is the one that best matches you.
Are premium credit cards worth their annual fee?
Yes, if they pay for themselves sufficiently based on your current spending patterns and goals. Premium cards offer significant credits which can total multiple times the annual fees if they are all used. If you change your spending habits to take advantage of credits offered, then you have done exactly what the card issuer wants you to do…they win. If you don’t use sufficient credits, the card issuers win through the annual fee. If you can take advantage of sufficient credits without changing spending patterns, you win! We have several articles about assessing the value of premium cards:
Which Premium Credit Card is the Best?
Premium Card Comparison – The Fine Print
$900 For a Credit Card?!? Can the American Express Platinum Card Be Worth It?
How many credit cards should I have?
As many as you can tolerate. If you’re not comfortable with more than one credit card, find the card that serves you best and use it exclusively. If you can tolerate multiple cards, use each for specific purchases where they bring you the best return.
Should I cancel a card I don’t use any more?
Not necessarily. Canceling a card might have a significant impact on your credit score, particularly if you’ve had it for a long time. A low credit score can have an impact on loan interest rates and potential approvals for new cards. If there is no annual fee for the card, there is no need to cancel it. If there is an annual fee, the card can often be downgraded to a no annual fee card with no impact on your credit score. For more information on credit scores, check out “How Your Credit Score is Calculated, and How Your Use of Credit Cards Impacts That Score”.
How do I know whether my credit card portfolio is optimized?
When it best matches your lifestyle, spending patterns, and goals.
Frequently asked questions
Which credit card is the best?
The one that provides the best net rewards based on your lifestyle, spending patterns, and goals. A card that provides points is generally less valuable to someone who doesn't travel than a card that provides good cash back. A card that provides points for a particular airline will have no value to someone who doesn't fly with that carrier, but might have great value to a frequent flier of that airline. The best card for you is the one that best matches you. For that reason, we don't rank or rate cards at Max Your Plastic.
How do you calculate the value of each card?
Based on the value that card brings to you. That value could come in the form of credits, points, cash back, status with airlines or hotels, or just helping you build credit. When considering credits offered by a particular card, consider the annual fee an offset to those credits, and only consider the credits if you would have spent that money even if you didn't have that card. When considering the value of points, consider how you actually use the points. They can be stretched for greater value when used for travel rather than cashed in for statement credits.
Are premium credit cards worth their annual fee?
Yes, if they pay for themselves sufficiently based on your current spending patterns and goals. Premium cards offer significant credits which can total multiple times the annual fees if they are all used. If you change your spending habits to take advantage of credits offered, then you have done exactly what the card issuer wants you to do. You have spent more to save more...they win. If you don't use sufficient credits, the card issuers with through the annual fee. If you can take advantage of sufficient credits without changing spending patterns, you win!
We have several articles about assessing the value of premium cards:
Which Premium Credit Card is the Best?
Premium Card Comparison - The Fine Print.
$900 For a Credit Card?!? Can the American Express Platinum Card Be Worth It?
How Many Credit Cards Should I Have?
As many as you can tolerate. If you're not comfortable with more than one credit card, find the card that serves you best and use it exclusively. If you can tolerate multiple cards, use each for specific purchases where they bring you the best return.
Should I cancel a card I don't use any more?
Not necessarily. Canceling a card might have a significant impact on your credit score, particularly if you've had it for a long time. A low credit score can have an impact on loan interest rates and potential approvals for loans or new credit cards. If there is an annual fee, the card can often be downgraded to a no-annual-fee card with no impact to your credit score.
For more information on credit scores, check out "How Your Credit Score is Calculated, and How Your Use of Credit Cards Impacts That Score".
How do I know whether my credit card portfolio is optimized?
When it best matches your lifestyle, spending patterns and goals. Contact us for a free consultation and recommended card portfolio.
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