Whenever you request guidance on how to invest to reach FIRE, you will often receive the comment you should invest in Emerging Markets e.g. through IWDA + EMIM. But should you?
Last Updated on June 15, 2020 by Mr. FightToFIRE
Every month I get a satisfying overview of my credit cards. Satisfying? Yep! Every euro I spend using my cards gives me a reward. I have two, both having a different reward.
That there are cards with benefits linked to them won’t come as a surprise to most people. It’s well known you can get some interesting deals or rewards if you take the effort to compare.
I’ve been using reward credit cards for a few years now, and I’m happy about how much money I’ve saved using them over the years. Mind you, it’s not an earth-shattering or life-changing amount.
It’s not really rocket-science when you want a credit card. Get a card from a bank that offers one for free.
Getting this free card is most of the time the reward itself. You will get nothing extra by using them. Quid pro quo as they say.
That’s why instead of looking for the free cards, try to find the credit card that offers a good deal.
The best deal you can make is the one where you know you can get your money’s worth and thus save money.
My Visa card summarized above is a good example of this idea. I use it for my daily expenses as much as possible. By just using it, I reach the minimum of 5 EUR in a matter of a few months. It’s simple, 1% cash back equals 1 EUR/100 EUR. After spending 500 EUR on clothing, repairs, sports equipment, etc. I get 5 EUR back.
By keeping track of my expenses I know I can get at the lowest about 1 EUR/month of cash back and in a “good” month I can get as much as 30 or 50 EUR back.
To top it all off, both cards offer extra perks when I buy stuff with them.
Additional benefits to using credit cards
Besides their main benefit, 1% cash back and 1 mile per euro spend, my credit cards also offer some additional benefits.
While these extras are not perfect and thus not useful in all cases, I’m not upset I get them as I already made use of some them a couple of times.
Which benefits both cards offer, is listed below:
Two too many?
While I’m glad I have both cards and I really like the benefits they offer, I keep having doubts about the usefulness of the MasterCard one and if it’s not the one too many.
The Visa card is a solid choice. I earn a fair amount of cash back every year using that one. The MasterCard, on the other hand, is less obvious.
Getting things like cancellation insurance is very convenient. Not losing the air miles I have earned throughout the years is also a nice benefit. The problem is that these extras are very limited in nature. They are only useful in case I travel by plane.
When I originally signed up for the air miles card, I had planned to travel more by plane than I ended up doing (once per year).
In the end, my plan to travel more got taken down by reality.
Flying is a want, not a need
While I enjoy traveling by plane, the plane ticket does eat into my travel budget quite a bit. This is because I’m not one to skimp on luxury and relaxation when I’m on holiday and my holiday starts the moment I leave.
Because of this way of thinking I got seduced into traveling business class for two long-haul flights. Mind you, I do not regret it one bit. It was an excellent experience. It makes the entire holiday just that more enjoyable.
However, this way of traveling is expensive (especially in business) and my main goal is not flying business class every year once or twice nor is it flying in general. It’s reaching FIRE.
I won’t reach FIRE by spending money on wants so I decided not the fly for the next two years at least.
This decision means that I don’t need the extra insurances that come with the air miles credit card.
It does still prevent my miles from expiring which are now well into the 50,000 but I’m not going to use them any time soon, so is it worth 75 EUR/year or 6,25 EUR/month?
The final point against the air miles credit card is a more environmental one. One I shouldn’t neglect.
Planes are heavy polluters and there are a lot of nice places I can visit by train or at worst by car in Europe.
By writing this down I realize I’m still on the fence about what to do.
For the time being, I’ll keep the card but anyone that has an idea on what I should do is more than welcome to share it.