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Credit Card Classes for Dummies: Part 2

Earning Structures of Credit Cards

Let’s continue our credit card classes. In the last chapter, we discussed the sign-up bouns Credit Card Classes for Dummies: Part 1. In this part, I am discussing the earning structures. We are still using the Chase IHG Premier card as an example.

If you look at the card description, you will find its earning structure:

It means if you use this card for travel, dining, or gas, every $1 spent will give you 5 points. Except for these 3 categories, anywhere else, every $1 spent will give you 3 points.

You can combine the sign-up bonus spending requirement with this earning structure. Let’s see if you spend $3000 on grocery shopping, you will earn 140,000 sign-up points plus 9000 points(3 points per $1 spending ). This looks like almost 50 points per $1 spending.

If you spend $2000on dining, and $1000 on gas, you will get 140,000+10000+5000=155,000 points!! More than 50 points per dollar! Fantastic Earning!

As you can see, if you can utilize the earning structure, the credit card will give you more rewards! However, a sign-up bonus is a major part of the reward you can get from a credit card. Therefore, when you look at a card, always think sign-up bonus first, then compare their earning structure, unless you are so rich that you need to spend a lot on one card. My policy is: once I finish spending for one card if I need more spending(of course we need it because we need to keep living in this world, right? ), I am always looking for a new card with a good sign-up bonus.

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