The points game is always changing when it comes to valuations and redemptions. Should you diversify your points to de-risk?

The main factors that come into play for diversification are:

1. How much spend you put on credit cards
2. How many credit cards you want to obtain

To simply things, we created this quadrant to determine your strategy.

Quadrant 1

If you’re someone who has a high amount of spend, but you don’t want to add that many credit cards, then Quadrant 1 is for you.

Pick a points system that works for your spending habits based on categories, and what you want to redeem the points for.

For example, if you don’t care about travel and prefer cash back, then I suggest looking into the Bank of America card set up to earn cash back.

If you have high spend and you want to redeem points for first class or business class flights, then American Express, Chase, or Citi cards would be ideal.

Quadrant 2

Quadrant 2 is for people who have a high amount of spend and want to obtain more credit card bonuses that provide outsized value. Diversifying your points portfolio should be relatively easy based on spend.

Quadrant 3

For people who spend less than $1,000 per month and want to optimize for cash back, I suggest picking one card or a simple cash back system.

A flat-rate cash back card like the Citi Double Cash or the Chase Freedom Unlimited card is ideal.

If you want to play the 5% cash back game, then adding the Chase Freedom, Discover It, and ABOC Platinum card is optimal.

The Chase Sapphire Preferred is another card to consider since the welcome offer is worth $500 in cash, and the $95 annual fee is waived the first year. You can product change it to a Chase Freedom or Chase Freedom Unlimited after 12 months of account opening.

Quadrant 4

If you have low spend, but you’re willing to add a few more cards, then going for cards that offer $100-200 as an intro offer is ideal.

There are a handful of cards in the travel, hotel, and cash back categories that fit the bill.

For cash back, cards like the Bank of America Cash Rewards card offers $200 after $500 in spend within the first 3 months of account opening.

For travel, the Capital One Venture card offers 50,000 bonus miles after $3,000 in spend within the first 3 months of account opening.

Credit Card Minimum Spend

Monthly spending is an interesting topic because some people might not spend that much money on a day-to-day basis. However, they might have large monthly bills to pay like health insurance, rent, mortgage, or student loan payments.

The ideal strategy is taking the large monthly bills and paying them with a credit card to meet a minimum spend requirement on a new credit card.

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