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10 common mistakes people make with travel credit cards (and how to avoid them)
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No one likes to make mistakes, especially when money and rewards are involved. If you’re not careful and conscious with your travel credit card strategy, you could end up losing out on a great welcome offer or even hurting your credit score.
Whether you’re a seasoned veteran or a newbie in the miles and points game, brushing up on these 10 common mistakes people make with travel cards and how to avoid them is super helpful. Sign-up for our newsletter for more helpful tips in the future.
Common mistakes made with travel credit cards
Always pay your balance in full
The number one thing is to pay your balance in full every month. Carrying a balance will likely negate any rewards you’re earning. In fact, you can actually improve your credit score by paying your credit card bills early.
If you don’t think you can pay your credit card in full, on time, every time, do not get in this hobby. You will never get ahead in life by constantly paying high rates of interest on credit card debt. People in our hobby use rewards credit cards the same way others use debit cards, in that we only charge what we can actually afford and we pay our bills on time (or early!) and in full.
Not meeting the minimum spending requirement
Travel credit cards come with giant bonuses you can earn once you meet the card’s minimum spending requirements. If you fail to meet the spending, you’ll lose out on hundreds (or even thousands) of dollars in free travel. It’s important to have some kind of plan when you apply. For instance, in the winter you know you’ll be buying a bunch of Christmas gifts, Black Friday sales items, making year-end charitable contributions, and maybe you have birthday and anniversary gifts coming up too. And of course you’ll have your usual grocery shopping and other expenses.
If you don’t think you have enough regular spending to unlock a welcome bonus, check out our resource full of ideas to help you meet your spending requirements.
Remember, the following will not count toward the minimum spend:
- Annual fee
- Cash advances
- Cash-like instruments (such as money orders)
- Returned purchases
Another critical detail is that the clock starts ticking on your minimum spending time period when you are approved, not when you receive or activate your new card.
Canceling your card immediately after earning the welcome offer or never using your cards
There are lots of cards with great bonuses and some cards, like the Chase Sapphire Preferred® Card, give you good reasons to keep using them because of ongoing perks, bonus points categories, and flexible points. But other cards don’t offer great incentives and you might consider not using or canceling them.
I’d recommend using the card occasionally to build a relationship with the bank and canceling a card right away could hurt your chances of being approved for more cards in the future. Remember, banks have been known to close accounts they feel have been idle for too long. I’ve had credit cards closed for lack of use in the past — big mistake. So if you have applied for cards with annual fees, it’s okay to evaluate the card for ~11 months and then cancel it to avoid the annual fee if you decide you don’t want it. It’s very easy to cancel a card.
Don’t be afraid of applying for business cards to support your side hustles
Credit issuers want small business owners to use business credit cards. So don’t be shy. We’ve had friends who are real estate agents, franchise restaurant owners, private practice doctors, independent contractors, freelancers and tutors open cards like the Ink Business Preferred Credit Card and Ink Business Cash Credit Card.
Meghan on our team rents out vacation properties and that has qualified her for business credit cards. Here are some ways you may qualify for a small business card and reasons why you should get a business card.
Closing a card before opening a new one
In most instances, you should not close a card before opening a new one. It will decrease the amount of credit available to you and hurt your credit card utilization ratio. That could potentially lower your credit score.
Keeping cards open for the long term will increase the average age of your accounts and possibly improve your credit score. Better to try and downgrade a card if you’re trying to avoid paying an annual fee. However, some banks limit the total number of cards you can have. So if you’ve hit the maximum and want a new card, you’ll have to cancel an old one.
Understand the rules for each card issuer
We’ll be the first to admit, there are quite a few sets of rules to follow when you’re applying for the best travel credit cards.
Welcome bonuses go up and down, but you can only earn the bonus once, per card, per lifetime on all American Express cards. So it makes the most sense to apply when there are increased limited-time offers because you never know if or when a bonus will increase again.
Keep in mind, you can still earn the bonus on different card products. For example, you’re eligible for the bonus on both The Platinum Card® from American Express and The Business Platinum® Card from American Express because one is a personal card and the other is the small business version.
Amex has additional rules that may restrict you from earning a bonus if you’ve already applied for lots of cards:
Welcome offer not available to applicants who have or have had this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.
Fortunately, Amex will now tell you up front if you’re not eligible for a welcome offer when you’re applying online.
There’s no official limit to the number of Amex credit cards or charge cards you can have at the same time. But most people report being able to hold at most five American Express credit cards (not charge cards) at once. I’ve heard of a few exceptions but they’re few and far between. That said, the decision to approve you or not is still ultimately up to the bank.
Barclays can be stricter than most banks when it comes to approving applications, especially if you’ve already collected a bunch of credit cards. But if you regularly use your existing Barclays card, and limit your other credit card applications, you can increase your chances of approval for Barclays cards.
With Barclays, you are typically eligible for the intro bonus on most of their cards as long as you don’t currently have, or have recently had, that specific card. Here are some Barclays application approval tips.
The application rules for Citibank credit cards can vary depending on the card, but they are always listed clearly on the application page. For some cards, like the Citi® / AAdvantage® Executive World Elite™ Mastercard® you won’t be eligible for the card’s bonus if you’ve received a new account bonus (intro bonus) for that card in the past 48 months. But other cards, like the Citi Rewards+℠ Card include language similar to the following:
Bonus ThankYou® Points are not available if you received a new cardmember bonus for Citi Rewards+SM, Citi ThankYou® Preferred, Citi ThankYou® Premier/Citi PremierSM or Citi Prestige®, or if you have closed any of these accounts, in the past 24 months.
What that means is that if you’ve earned an intro bonus on any Citi ThankYou points earning card or closed one in the past 24 months you aren’t eligible for a new ThankYou points card’s bonus.
The information for the Citi Premier, Citi Prestige Card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
Chase Sapphire Rule
If you’ve never had a Chase Sapphire card you can skip this little section.
- You can’t get a new Chase Sapphire Preferred or Chase Sapphire Reserve card if you already have any Sapphire card. Pretty simple.
- Also, you can’t earn the welcome bonus on a Sapphire card if you’ve earned the intro bonus on any version of the Sapphire card within the past 48 months.
Chase 5/24 Rule
If you’ve opened 5+ cards from any bank (not counting Chase business cards and certain other business cards) in the past 24 months, you won’t be approved for most Chase credit cards.
Capital One generally limits the number of personal credit cards to two. Small business cards usually don’t count toward your cap and you should wait six months between applications for all Capital One cards because they generally only approve one card per six months.
While not a credit card issuer, Marriott partners with both Amex and Chase to bring Marriott Bonvoy cards. There are strict and confusing rules for earning Marriott welcome bonuses, so refer to this post for a detailed rundown.
Sorry, “no backsies!” when transferring your points
This is a common mistake. You can’t put the ketchup back in the bottle once it’s on your burger. You can’t take the letter out of the mail box once you’ve mailed it and you can’t reverse points transfers.
Actually, here’s a prettier analogy: Once a caterpillar becomes a butterfly, it can never go back to being a caterpillar and once you make your Chase points into, say, United Airlines miles, they are now beautiful United Airlines miles ready to fly you away around the world. You can’t convert United Airlines miles back into Chase points.
So don’t transfer your points out until you’re ready to use them.
Use it or lose it – don’t let your credits or points expire
Some of the most generous perks that credit cards offer customers come in the form of credits. They’re a great way to help offset annual fees. For example, with the Amex Platinum card, you’ll get annual credits in the form of:
- Up to $200 for airline incidental fees on your selected airline
- Up to $200 in Uber credit
- Up to $100 in Saks Fifth Avenue credits
- $85 TSA PreCheck or $100 Global Entry credit (every 4 years)
These credits don’t rollover if you fail to use them. So use them or lose them because they can easily help offsets the card’s $550 annual fee (see rates and fees).
Additionally, some loyalty programs have points or miles that expire. Try to get activity in accounts that have the points or miles expiring to “reset the clock.” You can (usually) do this by earning or redeeming miles.
Avoiding cards with annual fees
Many cards that earn miles & points come with annual fees and often they’re waived the first year. Sometimes it makes sense to cancel a card before the annual fee comes due, because the cost of the card isn’t worth the rewards you’re earning, but that’s not always the case.
Some cards with annual fees, like the Chase Sapphire Preferred, are worth having because the points they earn are so valuable, and they even boost the value of points earned by no-annual-fee Chase Ultimate Rewards points earning cards. I keep it because Chase Ultimate Rewards points are amazingly flexible.
Paying the $89 annual fee on a card like the IHG® Rewards Club Premier Credit Card can also make sense, because you get a free night certificate each year on your cardmember anniversary and you can use it at any eligible IHG Hotel that costs up to 40,000 IHG points per night. Most cards with annual fees are worth opening for both the welcome offer and the long term benefits.
Opening a card just because the welcome offer is “large”
Big welcome bonuses are great, but don’t choose a card solely based on number of miles & points it earns. Not all miles & points are created equal, and 100,000 points in one program might not be as valuable as 50,000 points in another.
For example, the IHG® Rewards Club Premier Credit Card offers 80,000 IHG points after spending $2,000 on purchases within the first three months of account opening. But the value pales in comparison to the 80,000 Chase Ultimate Rewards earned by the Ink Business Preferred Credit Card after spending $5,000 on purchases in the first three months of account opening.
Also consider perks like yearly airline fee credits, rental car insurance, extended warranty protection, and trip or baggage delay coverage, when you’re deciding between cards.
It’s easy to make mistakes in the miles and points world, especially if you’re a beginner. We’ve compiled 10 common mistakes and how to avoid them. Things like losing out on a great welcome offer, hurting your credit score, or not understanding the rules for each card issuer.
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Either $5 or 5% of the amount of each transfer, whichever is greater.
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