Avoid These 8 Mistakes When Signing-Up for Credit Cards!

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When you’re new to rewards travel, it can appear overwhelming.  Applying for credit cards is 1 of the best ways to earn lots of miles and points so you can travel for free (or nearly free).  When signing-up for credit cards, it’s easy to make mistakes.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

We All Make Mistakes, but Many of Them Can Be Avoided!

I’ll show you 8 ways to get your Big Travel faster!

8 Common Mistakes That Will Slow Down Your Progress Toward Big Travel

The following is a list of mistakes you should AVOID when getting into this hobby. Check out the Beginner’s Guide for a step-by-step guide on the right things to do when starting out.

1.   NOT Understanding the Risks!

Sometimes folks get too excited and jump right in to collecting miles before understanding the risks.  This could be a BIG mistake!

You could wind up in debt or pay a higher interest rate on long-term loans, which could cost you thousands of dollars.  If you can’t pay your bills on time or you have plans to take out a major loan (home, car, student, etc.) within the next 2 years this hobby may NOT be for you!

2.   NOT Setting Travel Goals First

One of the most important things you can do before you start applying for credit cards is deciding how and where you want to travel.  Then find out which cards will best help you achieve those goals.

Otherwise you could find yourself with a bunch of miles and points in different accounts that you don’t have much use for.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

You’ll Never Arrive at the Right Destination If You Don’t Know Which Direction You’re Going!

If you’re not sure which airlines or hotels you’ll be using, I suggest folks new to the hobby begin by collecting Chase Ultimate Rewards points.  That’s because they’re very flexible, relatively easy to get, and can be transferred to these airlines and hotels:

 Chase Ultimate Rewards Airline Transfer Partners 
British AirwaysFlying Blue (Air France/KLM)Korean Air
Singapore AirlinesSouthwestUnited Airlines
Virgin Atlantic

 Chase Ultimate Rewards Hotel Transfer Partners 

Note: It’s important to know what your miles can get you!  Remember that NOT all miles from different banks can be combined.  For instance, I’ve received questions from folks wanting to use their Barclaycard Arrival Plus miles with their United Airlines miles and so on.  Similarly, Southwest points won’t get you to Asia.

I explain how you can use each card’s miles in my reviews, which you can find on the Hot Deals page.

3.   Signing-Up for the Lower Offer

There may be several different sign-up bonuses available for the same card.  If you apply for the 1st one you see, you could miss out!  So be sure to do some research before you apply.

But if you’re on Million Mile Secrets, you won’t have to worry.  That’s because I will always tell you about the best offers, even when they don’t earn us a commission.  All of the best deals with the biggest bonuses are listed on the Hot Deals tab.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

The Hot Deals Tab Is Easy to Find at the Top Of Every Post

4.   Applying for Too Many Cards at Once

It’s easy to get excited when earning Big Travel with Small Money and start applying for lots of cards.  But this could scare away the banks!

If banks notice you’re suddenly signing-up up for lots of cards, they may think that you’re in financial distress.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

If You Apply for Too Many Cards at Once the Bank May Deny Your Application

I usually recommend folks who are new to miles & points start out with 1 or 2 cards.  This will give you the opportunity to test the waters before you dive in.

Wait at least a few months to test whether you can meet minimum spending requirements comfortably and pay your bill in full each month.

Once you’re comfortable, you can start applying for 3 to 6 cards every 4 to 8 months.  Emily and I apply for 12 to 15 credit cards per year, and have done so for the past several years.  Our credit scores are still in the high 700s.

5.   NOT Making Sure You Can Meet Minimum Spending

Many mile and point earning credit cards require you to meet a minimum amount of spending in order to get the bonus.

Minimum spending requirements can add-up quickly when you’re applying for several cards.  Check to make sure your usual spending is enough to meet these requirements so you don’t lose the sign-up bonus.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

If You Don’t Meet the Minimum Spending Requirements on Your Card You Won’t Get Your Sign-Up Bonus

That said, you may be able to meet larger minimum spending requirements easier than you might think!  Check out my list of 40+ Ways to Complete Minimum Spending Requirements for tips.

I use a standard excel sheet to track the minimum spending requirements, bonus, and anniversary date for each card.  The Beginner’s Guide has more tips to help you stay organized.

Also, most times, the minimum spending requirement only counts net purchases.  That means the annual fee (if there is one) does NOT count.  And items you return might not count either.

Finally, the clock to complete the spending begins when you open your account, NOT when you receive the card or activate it.

6.   Signing-Up for Cards From the Same Bank

Banks could consider you a risk if they think you’re applying for too many cards.

Because banks typically only pull your credit report from 1 of the 3 credit bureaus, you can limit the number of inquires each bank sees by spreading out your applications.

Avoid These 8 Mistakes When Signing-Up For Credit Cards

If Banks See You’ve Applied for a Lot of Credit Cards, They Could Deny Your Application

So if you apply for the Chase Ink Plus card and they pull your credit report from Experian, Barclays won’t see that you recently applied for a card when they get your credit score from TransUnion.  

So don’t apply for 3 Chase cards all at once.  Choose 1 or 2 Chase cards (1 personal and 1 business), 1 AMEX, 1 Citi, etc., to mix it up. 

7.   NOT Paying Off the Balance Each Month

Rewards credit cards often charge high fees and interest.  This will negate any savings you get from the miles and points you earn.  And you could fall into debt!

Avoid These 8 Mistakes When Signing-Up For Credit Cards

Paying Interest Could Cost You More Than Your Miles & Points Are Worth!

So it’s NOT a good idea to get into this hobby unless you pay your bills in full each month.

8.   Canceling Cards Right After Receiving the Bonus

Banks give generous sign-up bonuses because they want you to try their cards.  So if you cancel your card as soon as you get the bonus, the bank is NOT going to be happy.

This practice could get you blacklisted and the bank won’t issue you anymore credit!  It’s best to evaluate a card ~9 to 11 months and then decide if you want to keep it.

It’s also NOT a good idea to spend exactly the amount necessary to get the bonus and then never use the card again.  Building a good relationship with each bank will improve your chances of being approved for their other cards!

Bottom Line

It’s easy to make mistakes when you’re new to miles and points.  But avoiding common mistakes can get you on your way to Big Travel faster!

So set travel goals, figure out which cards will get you there, and build good relationships with the banks!

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Editorial Disclaimer: Neither the responses below nor the editorial content on this page are provided or commissioned by the bank advertisers, and have not been reviewed, approved or otherwise endorsed by the bank advertisers. Opinions expressed here are the author’s alone, not those of the bank advertisers. It is not the bank advertisers’ responsibility to ensure all posts and/or questions are answered.

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8 responses to “Avoid These 8 Mistakes When Signing-Up for Credit Cards!

  1. Last time when I tried to have the SPG annual fee waived, I was told by rep. that I kept the accounts open for a long time and used the cards often, NOT LIKE OTHERS! I didn’t get my fee waived even though I put $9000 on the card for a boat purchase. But I would feel embarrassed if I had closed the accounts right after getting the bonus or not paying the annual fee as supposed.

  2. Earlier this year, my wife and I first got excited about travel credit cards for an extended trip to SE Asia in 2016 after reading your blog among others. The biggest mistake we made was signing up for the cards that gave us free nights first, Hilton and Hyatt, and not considering the one year expiration date. Now we’re struggling with the decision to travel to the cities we want in the order we want or trying to hit the most expensive one’s first to maximize the value of our free nights. We’ll feel like we wasted free nights if we use them for the $85 Hanoi Hilton vs the $300 Singapore Conrad, but we may not get to Singapore before they expire. To a lessor extent, the throw in Marriott category 1-4 free night has an expiration of 6 months which is before we were even planning on leaving for our trip.

  3. canceling cards after the bonus is actually quite rational in many situations

    does it negate bonuses to the bloggers tho?

  4. @Rico I call both Hyatt and Marriott that my travel plan has changed due to illness of a family member, Hyatt gave me one month extension and six months with Marriott.

  5. @Rico Call a week before expiration date.

  6. Thanks for the tips nwb.

  7. I routinely cancel cards immediately after receiving the sign-on bonus and have never had trouble having applications later accepted at the same bank (3+ years churning now).

  8. Daniel Schwartz

    “you can start applying for 3 to 6 cards every 4 to 8 months.”

    Can you clarify the schedule that you are recommending? Are you saying that 6 cards each cycle is acceptable?

    And are you recommending 4 months at a minimum versus the conventional quarterly cycle?