I know that leveraging your everyday spend to earn and redeem credit card points and miles seems overwhelming. I spent hundreds of hours researching before diving in deep, so believe me, I know it can be confusing. Keep in mind, everyone's lifestyle, spending habits, and travel goals are different - so don't worry about going crazy opening 100 cards. Go slow - and get comfortable with your new favorite hobby. 😊
Referral links change every few months, so you can always find updated links here.
With that being said.. let's jump in!
Does opening credit cards hurt your credit score? No! Actually, if done correctly - your score will increase! This is because you will begin to have more credit limits, and your utilization rates will be low. Both my and my husbands credit scores are consistently in the 815-830 range. Here is an article from NerdWallet to learn more.
Using credit cards will create debt: Not unless you don't pay your bills on time. I always pay my statement balance in full every month, and set up autopay as soon as I have the card in my account to ensure I never get a late fee! Don't spend more than what you can pay off each month. It's extremely important to monitor your spend and make sure you aren't overspending. **Don't charge and item and then pay it off immediately either. This is called credit cycling and the banks don't really like it. Just wait until the statement closes and pay it off at once.
Instead of using a debit card, I have moved all of my everyday spend (groceries, gas, bills etc) to a credit card in order to spend enough to make sure I meet the spend requirements for sign-up bonuses (aka: Welcome Offers). Sometimes, this means pre-paying my internet or car insurance bills. This helps me to consistently be working on a sign-up bonus, and earn as many points as possible!
Managing credit cards and earning points is very time consuming: Depending on how many cards you open, it can be! However, I think the time spent is well worth the effort when you are flying for 17 hours in lie flat business class seats to the Seychelles that only cost $80 in taxes! You will want to spend some time learning the ropes, and using spreadsheets or apps to help keep you organized.
I don't want to open 100 cards: You don't have to! The fastest way to earn points is through regularly opening credit cards for the sign-up bonuses, however there are other ways to increase your earn if you aren't currently working on a bonus. Reach out if you have a specific trip in mind, and I will be happy to help walk you through the amount of points you will need and provide the best card suggestions to get you there. 😊
Don't be scared of Annual Fees: You will notice that many of the cards that come with high welcome offers also have higher annual fees. These are usually worth it for the first year - as the points earned will typically more than outweigh the annual fee cost. On average, I have around $700-1200 in annual fees per year. However, I typically redeem between $50-80k in flights and hotels each year. If you decide after the first year that you don't want the card you can do one of 3 things:
Call and ask for a retention offer (essentially this is like getting another signup bonus in exchange for keeping the card open another year.)
Ask to product change to a no annual fee card
Cancel >> VERY IMPORTANT: DO NOT cancel the card until AFTER the second annual fee has posted. If you cancel, the bank will refund you the fee. But if you cancel before the fee posts, the bank can (and has) recall the points earned - and could potentially leave you in bad standing with the bank, making it difficult to get approved for future cards with them. Play nice and you will be rewarded!
Pay your balance: The first and most important rule is to make sure you do not overspend and can pay your statements in full every month. Once you begin paying interest, your points are worth significantly less.
Always know what your 5/24 status is: 5/24 status refers to a Chase rule where you can only open 5 personal cards from any bank within 24 months. This is important because if you open a bunch of cards through Citi or Amex, you will be locked out of opening Chase cards for 2 years. That's why you typically will open all the Chase cards you want first before moving on to another bank. If you have opened any cards in the last two years, go to Credit Karma to view all your cards and the dates opened.
Card Opening Velocity: This is a marathon - not a sprint. You typically want to wait at least 45-90 days between opening cards. This keeps a healthy relationship with the banks and reduces the risk of denial. Go as slow or fast as you feel comfortable with, but starting out I would suggest going slow. If you have a significant other ( aka: P2), you should rotate opening cards. At some point, you will want to open Business cards, which don't count against your 5/24, and allow you to diversify your points portfolio.
Availability/Flexibility is key when booking: Earning is only one-half of the game. To maximize the value of your points, flexibility is important. The best flight options and popular hotels are often snatched up 8-12 months in advance! My husband is a teacher, so we are mostly bound to the school schedule, which can limit our options. Booking early and regular searches is key to getting a preferred route and low point rate.
Point to Cash Value and when to use your points: Some people prefer to use their points on only high-end hotels and business class tickets, and others choose lower-cost hotels and economy flights. Personally, I do a mixture of both. I am pickier about the hotel location over luxury and prefer business tickets if the flight is over 6 hours. We also love our Southwest Companion Pass since you only have to buy one ticket.
My threshold on using cash vs. points is generally anything less than $200 I will pay cash for. Yes, you can find a $4-500 roundtrip flight to Europe if you plan ahead and are flexible - but I would rather use my points and save $1000 (2 people) even if it's not the best points value.
My Motto: Earn and Burn! Unlike money in the bank earning interest, points will depreciate in value, so there is no reason to hoard all your points. Earn what you need for a trip, and then burn baby burn! What does this mean?
Earn: The quickest way you will earn points by opening credit cards, meeting the minimum spend, and getting your Sign-up Bonus (SUB). You earn more by using online shopping portals (either through your CC portal which is found when logging into your account, or Rakuten.)
Burn: Using your points to book flights and hotels instead of cash. There are not usually "blackout dates" exactly, but the best redemptions do take time and effort to find. Flexibility is key. If you can fly on a different date, or if you just want a warm beach but don't necessarily care where, maybe you go to Cabo instead of Cancun.
Read: Visit different blogs and read as much as you can. You will learn so much by listening to Podcasts and reading articles. This is how I learned, and I continue to read up on an almost daily basis. The game changes, so "tricks" that work today, may not work tomorrow. You can always ask me for advice and am happy to help with practice and initial bookings, but I believe in the "teach someone to fish and they will be fed for life" mentality. Read, run practice redemptions, and do what works best for you in terms of keeping track of your cards and benefits. I believe in you! 🤩
Track your cards: Organization is key to knowing your 5/24, when annual fees are due, best card to use for purchases etc...
Create an account and download the app for TravelFreely and add in all the cards for you and your spouse (AKA: P2) with the dates opened.
What is the Best Card to use?: The best card to use is always the one you are working on a signup bonus for. If you are not currently working on a sign up bonus, use one with at least 1.5x earn rate such as a Chase Freedom Unlimited (see Start with Chase page).