This is a guide for those who are unfamiliar with this hobby and the whole “miles and points” game. So, why do it in the first place? If you are an average family, you are probably putting no more than $24,000 on credit cards each year.
If you used a miles earning credit card, that amount would not be enough for even 1 economy roundtrip ticket within the continental U.S. on most airlines.
First things first. This hobby is not for you if the following applies:
None of those things apply to you? Perfect! Here are some facts:
The factors that are affected by new credit applications are “Length” (length of your credit history, which goes down with each application) and “New” (inquiries from the banks when they check your score). However, something to keep in mind: When you get a new card, in turn, you will have more available credit.
That can decrease your utilization and actually increase your score. Sounds crazy, but it happens fairly often. I got 6 cards in the last year alone, and my official FICO score is currently 780, which falls into “excellent” category.
4. Some bonuses can be gotten multiple times, some only once. That’s why it’s very important to get the very best offer. However, if the card changes, you can usually apply for it again. Read my post The issues of timing and applying for credit cards
Let me list some tools and websites that will help you keep track of miles and points:
1. Create a spreadsheet so you can keep track of the dates when you applied for the new cards as well as minimum spending requirements. When the terms say you have to spend 1000 dollars in 3 months, the clock starts on the day of your application, not when you receive the card.
2. Mint.com An excellent, free site to keep track of your credit cards as well as checking, savings accounts and CDs. I use it myself and really like it. It’s essential to check your credit cards occasionally, especially if you have 30 of them like I do.
3. Sign up for Creditkarma account as well as Creditsesame. The first one tracks Transunion credit agency and the second one Experian. I will say that I found Creditkarma to be more accurate. But both are good (and free) tools to estimate your credit score and see changes in your credit history.
I recommend you don’t apply for any cards if your score is not around 750 on both. That way, you have a good buffer in case of an unexpected dip.
4. Once a year you are allowed to access your credit report for free from all 3 credit agencies. You can make sure everything is correct and all your accounts report in good standing. You can access it via this LINK
5. Sign up for Awardwallet account to keep track of your miles and points balances. Your miles expire when there is no activity for a certain amount of time, usually 18 months. You can avoid it by making a small purchase through the airline shopping portal or redeeming miles for a magazine subscription.
6. You can check award mileage requirements for different routes and airlines via “Wandering Aramean” tool HERE
7. Even if your credit application is denied, not all is lost. You can call that bank’s reconsideration number and try to reverse it by speaking to a credit analyst. I have been successful almost every time I called. Sometimes you can get an approval by shifting the credit from another card that you have with that particular bank.
8. You can check the points requirement for different hotels via Awardmapper tool
9. Check EVreward website, that compares different shopping portal payouts. Always make sure you get miles, points or cash back when making purchases.
10. Probably obvious, but always collect miles and points by signing up for loyalty programs. Even if it’s a small amount now, someday it can make a difference between getting an award ticket and not getting it.
Well, I think this is it for now. Check out my page “Best credit card deals for family” to see specific bonus recommendations. Also, miles and points are great, but sometimes it makes sense to just book tickets or hotels by paying cash. I have put a list together featuring some helpful websites HERE
Don’t hesitate to send me an email to firstname.lastname@example.org if you have any additional questions.