A Comprehensive Beginner’s Guide to Points, Miles, & Credit Cards Everything you need to know about earning valuable rewards
I would like to introduce you to the wonderful world of credit cards. Credit cards you might ask? But I already have credit cards and use mine all the time. If that’s so, are you reaping the rewards of your credit cards and are you using the right ones?
Many people are unaware of the fact that if you apply for the right credit cards you can tap into a world of free travel and save thousands of dollars from here on out. My parents were racking up thousands of points on their Capital One credit card for years and were finally able to book one ticket to Europe with their 160,000 points they accrued. With most basic travel credit cards, 160,000 points is equivalent to a $1,600 ticket. However, 160,000 points with the right credit card can equate to 3 round trip economy tickets to Europe, or 2 business class tickets, or 1 first class ticket, which can equate to thousands of dollars. I realized that from that point forward, I would find them the best credit card to meet their goals and allow them to travel in they comfort they deserve without spending a dime.
The first thing you should ask yourself is, “what are my goals, what would I like to achieve with my credit cards?” Do you constantly travel with a specific airline or to a specific destination? Do you travel often for work and would like to have a credit card that racks up double points for travel and earn you elite status? Take a moment to read the top credit cards I have listed here and take some time to decide what the best credit card is for you: Top 10 Credit Cards
Another key element before getting started is being able to track your credit card payments and meet your sign up bonuses. Many people think it is too complicated or time consuming to have multiple credit cards and worry about payments, annual fees, and bonuses. That is totally fine. Just pick one or two cards that fit your needs and focus your time and spending on those one or two cards. As long as your able to meet the spending threshold of the card in order to earn that sign up bonus, you can then set your payments to automatic and only worry about your annual fee once a year. At that time you can downgrade your card and get a new one! Thus, earning more valuable points and free flights and hotel stays.
2. Credit Cards and Reward Programs
There are many valuable credit cards out there earning countless rewards for their respective programs. The key is to finding the programs that best fit your needs and closely align with your goals.
The strongest credit card programs that allow a great amount of flexibility with your points are: Chase Ultimate Rewards, American Express Membership points, and American Express Starwood Preferred Guest points. These 3 programs are the top earning programs that allow you transfer your points to dozens of airlines and hotel chains. My favorite cards are the Chase Sapphire Preferred, Chase Ink Bold, Chase Ink Plus, American Express Premier Rewards Gold, American Express Platinum, and American Express Starwood Preferred Guest. These cards earn you so many valuable points for travel and offer great bonus points when spending on certain categories. To learn more about these programs and gain understanding of the points value in each program, read How much are my points worth?
If you tend to fly on United very often, or American Airlines, or Southwest, then those respective cards can be extremely valuable to you as well. Not only do many of these programs offer priority boarding, free bags, and sometimes lounge passes but they also offer double points for using their credit card to spend on travel with them. These points can rack up and earn you free trips along with their lucrative sign up bonuses. Hotels such as Hyatt, Marriott, Hilton, and more are also great cards to have to enjoy free stays and elite status. Many of the credit card programs listed above, allow you to transfer points to these airline and hotel programs, but having the card for a specific chain can earn you some great extra benefits.
3. Credit Score – How do credit cards affect my credit?
This is a very common question people are concerned with when discussing whether or not they should open multiple credit lines. The most important thing to note is that if you are a responsible cardholder who pays off your cards in a timely manner and who applies for credit cards every couple of months then you can not only avoid negative impact on your credit score but improve your credit the longer you have open accounts. You do not want to close old accounts because the longer you have aged accounts on your credit score, the better your credit will be. It is important to keep tabs on your credit score and make sure to check it once in a while for no fraud or negative inquiries against your account. I recommend using Credit Karma for an easy and free way to check your credit score from time to time.
When a credit card company makes a credit inquiry for a credit card application, the points that hit your account are very minimal and have a very minimal effect on your score. Not only that, but they fall off your score in a few years. You can have 20 credit inquiries and not have it affect your future applications or car loans. The only thing to be mindful of is the fact that you might want to tone down on credit card applications the year before applying for a mortgage. It’s better to keep your record clean for the short period of time leading up to that mortgage application. Otherwise, there are many myths surrounding one’s credit score taking a negative hit from opening multiple credit cards when, in fact, most credit scores benefit from responsible credit card holders.
4. Keeping track of your points
As long as you possess a credit card with a certain reward program, your points will not expire for that program. Billions of points per year are lost from people who forget about their points or lose their points for a lack of inactivity. It is so easy to keep your points active and such a shame to lose such valuable points when so easily avoidable. I recommend using Awardwallet.com. They have a great platform that displays all of your reward programs, their point totals, and their expiration date. The program is synced with your accounts and will keep your totals up to date.
I will also do my best to alert you when the best deals and promotional offers come up. Sometimes the credit card programs offer bonuses to transfer points to a specific airline, so it’s important to be aware of how many points you need to fulfill your travel arrangements and goals for the future. Sometimes great sign up bonuses arise for credit cards that weren’t offered before, it is important to assess whether this new offer is worth it for you to jump on and take advantage of this short-lived promotion. Make sure you are consistently checking travel blogs like this one in order to secure the best deals for you and your family.
5. How to earn points on a daily basis
Besides the obvious fact that you earn points very every dollar spent on your credit card, one should be aware of all the different ways to earn multiple points on a daily basis. Make sure you are using the right cards for the right situations. I use my Chase Sapphire Preferred for dining at restaurants, transportation/travel in order to take advantage of the 2x points. I use my Chase Ink Bold for office supply stores, telecommunications such as cell phone, Internet, and cable for 5x points and at gas stations for 2x points.
Another great way to earn tons of points is to do your online shopping through the credit card rewards portal. Chase and American Express allow you to shop through their website at almost every major chain’s store offering you from 2x points to 30x points per dollar spent! They often carry promotions for certain brands that make it lucrative to shop at their store. You can sometimes shop at Sephora for 8x points, or Groupon for 3x points, or for flowers at 30x points. Just make sure you go through the Chase Ultimate Rewards American Express Membership Rewards online portal on shop with their great daily bonuses for every dollar spent at participation online stores.