What you should do before quitting your job – Get a Credit Card

get a credit card before you quit your job

Last week I wrote about how my ANA VISA Platinum card was scammed.

A new card was delivered from Mitsui Sumitomo in a couple of days so now everything is back to normal.
It’s times like this that I’m glad I had the Platinum Card.

Today’s topic is going to be about credit cards.
One thing you definitely should do before you quit your job is to get a credit card.

Once you’re out of employment, it’s going to be tougher to get one.

I’m a credit card mania myself, having been a member of the American Express Platinum Card, the Diners Premium Card and the JCB The Class card, which are all credit cards that have an annual membership fee of more than 50,000 yen.
I’ll be walking you through the basics of getting the perfect credit card.

 

Is it better to get a credit card?

Definitely, yes

The largest advantage of using a credit card is that you get points.

The type of points and how much you get is different per card.
In a simple example, if you’re getting 1% cash back on every purchase you make, that’s like shopping at a 1% discount every time you shop.
That’s not going to happen with cash.

Credit cards usually come with benefits other than points like insurance, airport lounge access and stuff like that.
My ANA VISA Platinum comes with access to ANA lounges in Japan, concierge service, 50% off meal coupons and other good stuff.

When deciding on the value of a credit card, it boils down to maximizing the amount determined by the following equation:

(value of points + value of other services) – fees

 

When is the best time to get a credit card?

The earlier the better.

The reason for that is:

  • It’s more beneficial to reap the benefits of the card as early as possible
  • Grow your credit history from early on

Your credit history won’t grow unless you use credit.
Of course, paying on time is a big must.

 

What card should I get first?

The ANA card is a good choice whether you travel for work or not

The best credit card is going to depend on the person.
We can narrow the selection down a bit by asking the following questions:

  1. Do you fly often for work?
  2. Do you like traveling?

If you answered yes to the first question:: Get an ANA card or a JAL card immediately

If you answered no to the first question but yes to the second one: Get an ANA card or a JAL card immediately

If you answered no to both questions: Get a credit card where you shop often or one that is related to a service that you use

 

Why get an ANA/JAL card?

Because you get miles

As mentioned above, the important thing in choosing the best credit card is to maximize the amount determined by the following equation:

(value of points + value of other services) – fees

With the ANA and JAL card, you get miles instead of points.
The value of these miles is significantly more than any other point you’ll be getting on another card.

Let me explain.

 

The value of a mile

Same 1%, but different value

  • A card that gives you 1 yen cashback on every 100 yen spent (a typical credit card)
  • A card that gives you 1 mile on every 100 yen spent (a typical ANA/JAL card)

On the surface, both cards seem to be giving you a 1% return on amount spent.

With the first card, the 1 yen you’ll be getting is 1 yen, no more no less.
But a mile could be worth 4-5 yen and more depending on how they’re used.

How is that possible?

Miles can be exchanged with airline tickets.

To get a round trip economy ticket from Nartia to New York, you’ll need 50,000 miles.

Tokyo New York Mile

The price of the cheapest economy ticket on the same flight at the time of this post was 186,500 yen.

186,500 / 50,000 = 3.73

That’s 3.73 yen per 1 mile.

With business class, the value per mile skyrockets.

The same round trip flight from Narita to New York on business class is 85,000 miles.

mile business

The cheapest business class ticket on the same flight as of the time of this post was 1,022,500 yen.

1,022,500 / 85,000 = 12.02

That’s 12.02 yen per 1 mile.

The value per mile is going to be different depending on where you fly and what class you take.
I use my miles on long distance flights in business class so I put a value of 5 yen on a mile.

It’s a little convoluted, but the important thing here is that the value of a mile is more than 1 yen.

 

ANA or JAL, which is better?

It’s easier to rake up miles with the ANA card

By now, you should be feeling eager to get an airline credit card.
The next choice you’ll be making is whether to go with ANA or JAL.

The obvious answer would be to go with the airline you use most.

Otherwise, you can just go with your preference.
They’re both really good airlines and there’s no significant difference.

If you’re going to be doing it for the miles, I recommend going with ANA.
There are some tricks that you can use to boost the number of miles you get with the ANA card.
I’ll write about this in a different post but if you want to know now, google:

  • ソラチカ マイル 裏技
  • マイル マイペーすリボ

 

Which ANA card should I get?

Get the ANA Wide Gold Card (VISA or Master Card)

In terms of raking up miles, the ANA Wide Gold Card (VISA or Master Card) is a good choice.
There’s a standard ANA card that has a cheaper annual fee, but you’ll have to pay extra fees to convert points into miles.
If you’re in it for the miles, you should go with the Wide Gold Card.

 

The reason I use the ANA VISA Platinum despite it’s outrageous membership fee

ANA VISA Platinum

The annual fee on my my main card, the ANA VISA Platinum, is 86,400 yen and is 71,280 yen more than the 15,120 yen of the Wide Gold Card.

I always debate on whether I should change to the Wide Gold Card but I end up renewing the membership because of the following reasons:

  • 10,000 miles bonus annually (value of 50,000 yen) 
  • ANA VISA Platinum gives you 15 miles per 1,000 yen spent compared to the 10 miles on the Wide Gold (that’s an annual difference of 20,000 miles if you make annual purchases of 4,000,000 yen with your credit card, a value of 100,000 yen)
  • Concierge desk to help you out in case of trouble (like credit card scams)
  • Priority Pass

Considering the above, I manage to convince myself that I’m getting a net benefit and that I should hold on to the card.

 

Next month I’m going to be using a trick to boost the miles on my card

I knew that the technique existed, I just haven’t tried it out because it seemed like it was going to require a little bit of work.
Now that I’ve got time on my hands, I’m going to give it a shot.

Stay tuned for the results!

 

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