There are two types of people in this world. There are those that only use cash and checks. They will pay for everything by handing over a black briefcase with tons of money in it. And then there are those that use credit cards to pay for things. If you are a strict cash type of person, then this page is not for you. However, if you are a credit card type of person, or you want to become one, this page is most definitely for you and I advise you to keep on reading. I have provided you with information regarding credit cards, specifically their relevance when living in Israel, and how to get the most out of them. For in-depth detail about the “credit card game”, you should look through dansdeals.com and other websites such as nerdwallet.com.
What are the benefits
Each credit card has its own unique benefit. But, the general benefit of using credit cards is the ability to go on vacation. While in Kollel, you are either supported or you and your wife are making it work. Between the two, there isn’t much extra for vacations. A change in scenery during vacation times (Bein Hazmanim) goes a long way in preparation for the coming year (zman). Whether it’s going to Europe or staying in Israel, credit cards can make such vacations a reality. Whether its hotel stays or flights, the right credit cards can help you out. I personally have been able to go on many enjoyable vacations all to the credit (no pun intended) of credit cards.
Another notable benefit is the car rental insurance coverage. Some cards provide primary insurance and some provide secondary. Declining the rental car insurance of CDW (collision damage waiver) and TP (Theft protection) and allowing your credit card to cover them can significantly bring down the price of a rental car. Israel still makes you pay for liability and your credit card will not cover that. I can also vouch for the validity of this benefit as I have used it before in many different countries.
A less prevalent benefit but nonetheless noteworthy is purchase protection. While living in Israel, you are constantly buying online and having people bring stuff from different parts of the world to Israel. In these circumstances, purchase protection can save you from a lot of headaches. American credit card companies care very much about the consumer and they are usually on your side so take advantage of this wonderful opportunity provided for you from the land of opportunity.
If you don’t want to use the points or miles, they can also be sold for cash (not redeemed for cash from the credit card company). Points vary in value depending on the rewards program.
There are many companies online that buy and sell miles. I have experience with someone who gives great rates and pays immediately upon account verification. He can be contacted through Live Your Bil.
How to do it
There are many credit card companies out there that you can sign up for. The main two, and most recommended are Chase and American express. The lesser-known companies are Barclay and Citi. You do not need any of these banks in order to be eligible for their credit cards. As long as you have a bank account and a social security number (and decent credit), you can be eligible for any credit card from the above-mentioned companies. The credit card will be sent to the address in the United States that you apply with (do not put the address in Israel). Then, you can either have someone bring it to you, or you can call up the credit card company and tell them you are temporarily out of the country and you need the card shipped abroad. You can request for it to be overnighted at no extra charge.
Credit cards offer points/miles for hotels and flights. Being that the expenses at the early stages of marriage are not too large, accumulating points and miles purely through basic spending is not so lucrative. The most lucrative way to accumulate a lot of points is through the signup bonuses. In short, credit card companies want you to sign up. Therefore, they will offer a large signup bonus upon reaching the spending threshold. The signup bonuses fluctuate and many of them offer more like a limited time offer. Make sure you are getting the highest public offer when applying for your card. You can google what is the highest public offer for card x. A quick tip to see the highest bonus is to look at Chase and American Express websites in incognito mode. For some reason, offers seem to be higher there than in the regular browser.
Companies will give you the bonus when you spend the required amount in the allotted time period. The spending threshold varies per card but it’s usually anywhere between $1000 and $5000 within the first three or four months. This may seem like a lot of money to spend in a short amount of time, but the average couple in Israel spends between $1000 and $1500 each month (aside from rent which usually can’t be paid with a credit card). This spending amount puts most sign up bonuses in reach. If the allotted time is nearing the end, there are ways of topping it off to guarantee that the spending threshold is met. Contact me for specific details on how to go about that. Once the spending threshold is met, the bonus points or miles will be put into your account and will be ready to make that dream vacation a reality.
These points or miles can be used for flights or hotels when booking a vacation. Certain credit cards also offer annual free nights upon reaching the anniversary of your account which can help you get that hotel that you otherwise would not have paid for. Having flights and hotels covered by credit card points eliminate most of the expenses of a vacation.
Which cards to sign up for
Credit cards can be broken up into consumer cards and business cards. Although business cards have hefty signup bonuses and don’t go on your credit report, getting approved is a bit more difficult so we will only discuss consumer cards. Click here for a link that I have found helpful when applying for business cards:
For further help with business cards, please contact me.
When looking for a credit card to use in Israel, the number one thing you want to make sure is that there are no foreign transaction fees with your card. Otherwise, you’ll be paying an extra 3% with every swipe. The one downside of having a card with no foreign transaction fees is that it will most likely have an annual fee. But many cards waive the annual fee for the first year and by then, you can cancel it before you are charged. But even if you have to pay the annual fee right away, most of the benefits that come with the card outweigh the annual fee at least for the first year, and then you can cancel it. Annual fees range from $75 to $550. For info on how not to destroy your credit, see below in “what are the risks”.
(The only card I know of with no annual fee and no foreign transaction fee is the Capital One Quicksilver card. However I don’t recommend applying for a capital one card being that they pull from all three credit bureaus making it difficult to be approved.)
The next thing you have to decide when choosing a card is do you want to use it for hotel stays or flights or both. Chase, American Express, Citi, and Barclay are paired up with airlines and hotel companies. There are credit cards specifically for hotels such as the Marriot cards (Chase), Hilton cards (Amex), and IHG card (Chase). There are cards specifically for airlines such as United Airlines (Chase), Southwest Airlines (Chase), and Delta (Amex). Lastly, there are cards that have the flexibility for both flights and hotels. Such cards are the Chase Sapphire Preferred and Reserve cards. For American Express, there is the gold and platinum card. For Barclay, there is the arrival plus card which sometimes offers up to 70,000 points.
As mentioned above, you should constantly check to see when the bonus is at its peak. The Chase Sapphire cards sign up bonuses range between 50,000 and 60,000 points. The American Express gold card can be as high as 50,000 points and the platinum card is 60,000 standard but you can be targeted for a 100,000 welcome bonus offer. United Airlines credit card bonuses can be 50,000 miles. The Delta gold card can be between 50,000 and 60,000 miles and the Delta platinum card can be as high as 70,000. Click here for a link for the Chase Sapphire Preferred card offering 60,000 points. For other chase card offers, click here. I would love to paste for you other links directly to the credit card websites but you might not get the highest public offer. Therefore, as mentioned above, go on incognito mode in google chrome and go on americanexpress.com. For Chase, incognito mode doesn’t help.
What are the risks
Like everything, there are risks. However, if done properly, these risks can be avoided. The two main risks involved in opening and closing credit cards are hurting your credit and credit card debt. Opening and closing credit cards will not hurt your credit if spaced out over a period of time. Also, having a lot of credit cards open does not hurt your credit but on the contrary, it can help your credit because you look trustworthy and creditworthy. You should try to never carry a balance from month to month in order to avoid late fees, paying interest, and hurting your credit score. In case your credit score does drop, don’t panic (it can be monitored with your FICO score or Chase credit journey). Hold off on applying for a new card for a few months and pay your bills on time and it will go back up.
As for credit card debt, avoid it. Never carry over a bill from one month to another. If you have no choice, get out. Close your cards and use cash. If you are carrying a bill, you are spending more than you can afford and credit cards must be avoided at all costs.