Awesome Airport Lounges and the Credit Card Tiers to Enter

Credit Card Tiers

1. $0 annual fee cards. The best "return on spending" you can get at the $0 annual fee card level is 5% back. The Target Redcard pioneered this a few years ago with 5% back on everything you buy at Target with no annual fee. 5% back is now the gold standard for 'store' cards. There is a boatload of $0 annual fee cards.
2. ~$95 annual fee "Travel" cards. Cards at this level have real, measurable benefits. Examples: A free annual night at a mid-tier hotel, free checked bags and priority boarding on flights, a free grant of 7,500 miles annually, etc. Before opening any card at this level, ask yourself whether to "keep" the card long-term or "churn" the card by closing it at the 11-month mark and pocketing the signup bonus. Aim never to pay an annual fee that you won't benefit from.  
3. $400-700 annual fee "Premium" cards. Cards with such a high fee get much more complex, but the focus is still travel. Almost all of these cards come with airport lounge access, free credit for the $100 application to TSA Pre/Global Entry, and significant points earnings rates on travel activities. For example, 5x points per dollar spent on flights is now pretty common. From there, the benefits vary from card to card. However, there aren't that many cards at this level. The big banks have one each: Amex has the Platinum, Chase has the Sapphire Reserve, Citi has the Prestige, and CapitalOne has the newly launched VentureX.

Lounges

If you fly once per year, it can be easy to justify getting one of the premium cards for lounge access. Flying to Tanzania, I had an 8-hour layover in Qatar. Instead of being bored, tired, and hungry, I had access to two lounges. The first had lots of food/drinks, a sleeping area, and showers, and the second was individual nap/entertainment pods (pictured below). Both lounges were completely free because I hold a card that provides unlimited lounge visits for me and up to 2 guests traveling with me. Once you get used to lounge life, returning to sitting at the gate is hard.
Even if lounges specifically aren't your cup of tea, a few premium Chase cards come with an airport restaurant perk. As part of your lounge access membership, you can visit certain airport restaurants for free food/drinks. In US airports, you can get $28 of free food/drinks for you, plus an additional $28 for each guest you bring. I used this perk at a surprisingly solid London Heathrow airport restaurant for a bunch of cappuccinos and eggs benedicts for three people.

Credit Cards Wrap-Up: a question that I would ask PayPal job applicants

Your good friend owns a general store that you shop at sometimes. One day you are shopping there and you go to pay. In your wallet, you have cash, a credit card, and a debit card. Which do you choose to pay for your stuff at your friend's store?

The purpose of this question is to determine whether the candidate understands payments. The correct answer is to pay with cash, which is certainly the best form of payment in this scenario. If the store owner is indeed "your good friend," then you want that friend to receive all of your money. Using a card would force your friend to pay a transaction fee to accept your card (applies to both credit and debit cards). When you pay with cash, you are giving the merchant all of whatever the goods cost. Let’s use a $100 purchase as an example. A credit card “swipe” fee can be as high as 3.5%, which your friend has to pay. When paying with a credit card, you may only be giving your friend $96.50 after your friend pays the swipe fee to the card network. My interview question is a great example of when NOT to use a credit card. Mom and Pop shops will thank you. Be considerate of small businesses that could use 100% of your financial support!

Trades

Recommend a bunch of your reduce or sell off your heavy losses. Cutting your losses is super important!

• Lindsay, Chloe, Antonio, and Garrett are still sitting on the additional $1000 in cash.
• I updated Kyla's and Michael's Tesla holdings to account for the 3-for-1 stock split that happened in August.
  Please remember to update the google sheet detail tab when you buy/sell something. I look at the revision history each month so I can include your trade in this newsletter. The summary tab is at the bottom of this email as a picture and the live link to it is here.