The post is updated with new information on a regular basis.
There are key tenets to follow, whether you are a credit card rewards novice or a full-on expert.
The points and miles game is no different. There is always a chance for errors when you are new to the hobby.
I want to help you avoid some of the most common mistakes by sharing my 10 Commandments for travel credit cards.
When it comes to credit cards, keeping a balance is a bad idea.
Several people treat credit limits like free money, spending at will without a plan to pay the balance down. This behavior will cost you money because it will wreck your credit score and hurt your ability to open cards or get a mortgage in the future.
If you don't pay off your credit card balance every month, you won't be able to use your points or miles.
Whether you have a single credit card or 20 you should always spend within your means. To project out my bank account for at least three months, I use an excel spreadsheet.
Running a balance is not nearly as bad as missing payments are. A late fee of $25-$35 is charged by most credit card issuers. Some credit cards will waive the fee for missed payments, but you want to avoid it.
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Your credit score can be adversely affected by payments made past your due date. One missed payment isn't fatal, but several are cause for concern, and your payment history makes up 1/3 of your credit score.
If your credit card is delinquent, what should you do?
Automatic payment features are available on almost all credit cards.
I remember to add my bank account and set up automatic payments when I open a new card because I set a calendar notification for four to six weeks afterwards. You might have to manually make the first two payments before autopay kicks in if there is a one- to two-month delay.
Setting up autopay for your credit cards is related.
Many people are surprised by the number of credit cards I have, and I often get asked, "Don't you need to cancel one card before opening another?" It's absolutely not. Canceling a card may affect your credit score.
There are two reasons for this. Your credit utilization ratio is a big part of your credit score.
Credit utilization rate is 10% if you have balances of $5,000 and $50,000. Your rate jumps to 25% if you cancel a card with a $30,000 limit because your credit is only $20,000. It is still high enough to give a card issuer some doubts.
Part of your credit score is based on your length of credit history and the average age of your accounts If you have a card with no annual fee for more than five years, don't cancel it. If the bank closes it, make a few purchases each year to keep it going.
If you cancel a card, it won't hurt your credit utilization rate. If the card has an annual fee that you don't want to pay, try to lower the card to a no annual fee version.
If you cancel a credit card, you will lose your points and miles.
It isn't an issue for many credit cards connected to a specific airline or hotel chain as what you earn automatically is credited to your account with that program Other points and miles are sitting with the card issuer until you redeem them.
Canceling these types of rewards will cause them to disappear once your account is closed.
Transfer the points to a partner or redeem them directly for travel, statement credits, etc., if you want to cancel the card.
Some loyalty programs will wipe out your account after a certain amount of time.
It can be shorter, but the period is usually at least two years.
There are tips on how to keep your points and miles in good shape. I always recommend making at least one purchase annually on every card in your wallet and earning points or miles through a shopping portal for any types of points or miles for which you don't have an associated credit card.
One of the biggest drivers of credit card applications is the sign-up bonus, and using a rewards card or travel card for day-to-day spending is a great way to boost your earnings.
You can miss out on points if you don't spend enough in the allotted period. There are some things to remember when it comes to these requirements.
It's important to know the time frame and what counts, but you also have to track spending. Money management tools can help stay organized.
It's the best time to apply for these cards.
You can get bonuses for purchases at certain merchants with many credit cards. When my friend pays for their dinner with a 1% cash-back card instead of a Chase card, I cringe.
If you have a card with bonus categories, you should use it to make purchases.
There is a guide to the best travel cards.
It is a good idea to read the card agreement to find out the earning and benefits of your current cards. If you want to get a new card for a specific spending category, you can check out our guide to the best cards.
If you are new to this hobby, you might think that cards with an annual fee are terrible.
Many of these cards offer lucrative sign-up bonuses, ongoing benefits and anniversary bonuses that are more than covered by the annual fee. Many of them give you a free one-year trial before you have to decide if you should keep the card for the long term.
Credit card annual fees are included in the guide.
You have already taken the first step. Our expert analysis will help you maximize your earnings and rewards on these cards. You can find a list of the best credit cards on our page.
There are still ways to avoid the annual fee after opening a card.
You can always ask your card issuer to waive the annual fee if you don't think the value is justified.
The issuing bank does not want you to close your account. I have received offers to keep cards open.
Downgrading your credit cards is a good idea right now.
You should only do this for cards that you wouldn't get an offer for.
You can cancel the card if you call the number on the back of it. See what happens after that.
My bonus was 20,000 Membership rewards points.
If you use a credit card to make a purchase in a foreign currency, it can cost you a fee. You should never accept foreign purchases that the merchant converts to dollars for you.
Some credit cards don't charge these fees. Foreign transaction fees are not included on several premium travel rewards credit cards. The Capital One VentureOne rewards credit card has no annual fee.
You can get a card that will waive these fees. There are no foreign transaction fees on these credit cards.
Many things should not be done with your travel rewards credit cards. Hopefully, this list of commandments will give you some ideas on which credit card is best for you.
You can use points, miles or cash to get a nice vacation. It is important to make the most of your cards and use them frequently.
The additional reporting was done by Emily Thompson and others.
Click here if you want to know the rates and fees of the Amex Platinum Card.
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