5 Lessons From Smart Credit Card Maximizers – Forbes Advisor

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I still remember my first credit card rewards redemption. Using Amtrak Guest Rewards points, I booked a round-trip ticket on Acela from Philadelphia to Boston in business class. As a poor student, this seemed like an incredible achievement: for a few thousand points, I saved about $200. More importantly, it meant I could go anywhere. Without points, my best option for fall break was to hang out on campus.

Over the years I started measuring my miles in the tens of thousands instead of thousands. Then hundreds of thousands and finally breaking the million mile mark. Simultaneously, the value of these redemptions went from three to four to five figures.

The not so secret? Use credit cards as a tool to earn rewards.

While my own travels have generated incredible value and amazing memories, they pale in comparison to what real credit card maximizers have. They have learned to “play the game” so intensely that it is easy to go just about anywhere, in any class of service. So whether you’re looking to rack up miles or ready to upgrade, these credit card maximizer strategies can help you earn (and redeem) to the next level.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We have selected the best credit cards so as to be the most useful for the greatest number of readers.

Before you apply, do the math

With years of exaggerated mileage under his belt, it’s safe to say that Steve Belkin knows a thing or two about maximizing rewards. In fact, he even detailed some of these conquests in his book “Mileage Maniac: My Genius, Madness and a Touch of Evil to Amass 40 Million Frequent Flyer Miles”. Yes, you read that right: forty million miles.

And though Belkin is known for jumping feet first into mileage promotions, he cautions that newbies shouldn’t be so bold. “The airlines do a masterful job of convincing us that we want to be part of their program, but there can be a disconnect in expectations when you go to redeem your miles,” he says.

Before applying for a new credit card with an exciting welcome bonus or investing hours to maximize a promotion, make sure you understand the limitations of the program. A quick search on the structure of mileage programs, or even a few search redemption examples, can provide great insight into how much things really cost, how long you need to plan for, and whether you’ll have to accept a connecting flight at the instead of non-stop.

“Airlines have created frequent flyer programs as a marketing tool to build loyalty,” Belkin notes. There can still be great reward options, but it’s not always a slam dunk. Taking the time to really research the programs that are best (or worst) for you can save you from discouragement down the line.

Have more than one credit card and give each a supporting role

Rose Mountcastle, mile collector and avid traveler, earns over half a million miles a year, in part by spending strategically on multiple cards. “Each card is good for something different,” she says. “I use a card for online purchases because it rewards at a higher rate and keeps tabs on my Chase Freedom [Flex]rotating bonus categories that earn 5 points per dollar.

While Mountcastle takes this to the extreme – responding “I’ve lost count” when asked how many cards she has – you can apply the same strategy on a more manageable level. Mountcastle makes it simple by suggesting you take a look at your current spending habits to see if there’s a category that stands out.

By choosing a card that rewards your highest spending category (like dining out, groceries, or travel), you can maximize your rewards on what can add up to thousands of dollars a year. For the rest, keep it simple. There are several cash back cards that offer a high reward rate without having to worry about which category your purchase falls into.

If you decide to add a third, fourth, or tenth card, Mountcastle recommends physically labeling each card with its bonus categories: “I used to do it in my head, but life has a lot of distractions. “

Carefully say goodbye to cards you don’t need

Self-proclaimed “the Airline Guy” Forbes Advisor contributor and trade analyst Brandon Bycer agrees with most pundits that you shouldn’t just jump into new cards. “I don’t think a bonus alone should be enough to sign up for a card because after using the bonus, well, now you have another credit card [that] you’re stuck with it,” Bycer said. But, sometimes you will have a card that no longer fits your lifestyle. In this case, there is nothing wrong with moving on.

There is an opportunity cost to using the “wrong” card, which may mean you want to get rid of it and choose a better fit. But first know that canceling a credit card (especially one you’ve had for a long time) can hurt your credit score, which is a crucial number if you want to buy a house, get another credit or buy a car.

If you want to eliminate excess cards, make sure it’s a card that doesn’t have a long history of payment activity and doesn’t have a high credit limit. This way, when you close the account, you minimize any negative impact on your credit usage and ultimately your credit score.
And finally, before you say goodbye to a card you love but don’t want to pay, make a call to ask about a retention bonus. Banks know that it is much cheaper to keep a customer than to bring on a new one, so they may be willing to waive your annual fee or give you enough miles or points for card retention. makes sense.

Pay balances and pay on time

If there’s one thing all of our experts agree on, it’s that you need to use your credit cards responsibly, or you’ll void all the rewards you’ve worked so hard for.

Cardholders who pay off their balance monthly don’t have to worry about their APR; with a zero balance, your interest charges will also be zero. But earning rewards worth 1, 2, or even 5% won’t even make a difference if you’re paying 15% interest. Missing payments or late payments may also result in additional charges in addition to interest payments.

Before applying for rewards cards or credit cards in general, make sure you understand your personal finances and the responsibility of only charging what you are sure you can repay. Otherwise, you could be paying for that “free” vacation for years to come.

Also, some card promotions are based on your credit score. If you hope to receive high welcome offers or requalify for specific cards in the future, maintaining a healthy credit history is a must.

Don’t limit yourself to one brand

A disappointment among mile collectors is the tendency to steadily increase award prices. Devaluations do not occur on a set schedule, but usually occur every year or two and can leave you trapped in a program that no longer works for you.

To avoid this, “don’t be a brand snob,” Belkin says. “Programs like [American Express] Membership Rewards gives you options from multiple airlines simultaneously.

He goes on with tips for earning miles that may not be about miles at all: “For many travelers, cash is more productive than points.”

Everyone should have a good cash back card in their wallet, then redeem it for statement credits that offset what Belkin calls “free agent plane tickets.” When it comes to money, there are no blackout dates or restrictions on which airlines you can fly. While there’s no aspirational perk, economy class travelers might find it more beneficial.

Find the best credit cards for 2022

No credit card is the best option for every family, every purchase or every budget. We have selected the best credit cards so as to be the most useful for the greatest number of readers.

Conclusion

All credit card rewards are better than earning nothing, but finding the right cards for your personal situation is paramount. Then, using them strategically is what can turn your redemption patterns from basic to supreme. With the right maps, a dash of planning and constant responsibility, you too can plan the trip of your dreams.

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