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When you’re just starting out in the points and miles world, it’s easy to be overwhelmed by all of the credit card choices, bonus categories and different ways to earn and spend points. It can be easy to make the kind of mistake that will prevent you from getting all the value you can out of your new card.
This guide will help you avoid some of the most common mistakes made by new points collectors.
1. Not understanding the 5/24 rule
Chase credit cards are some of the most popular in the travel rewards space because of their lucrative welcome bonuses and redemption options. However Chase also has the dreaded 5/24 rule. This rule states that if you have opened five or more credit cards in the past 24 months (with any bank), Chase will not approve you for certain cards.
New travel rewards collectors should start with the Chase family of cards, then move on to another group of credit cards that doesn’t have the punitive 5/24 rule.
2. Redeeming your points for cash instead of travel
Some credit cards allow you to redeem your accrued points as cash. However, they will usually offer you greater value for your points if you use them for travel. For example if you have 50,000 Ultimate Rewards® points on a Chase Sapphire Reserve®, you can redeem them for $500.
Redeem your points through the Chase Ultimate Rewards® travel portal and they will be worth 50% more. That means that your 50,000 points would actually be worth $750 if you use them for travel bookings through the Chase Ultimate Rewards® travel portal.
Transferring points to airline and hotel partners for premium cabin redemptions can help you get even more value out of your points.
3. Not getting a rewards card that matches your spending habits
All rewards credit cards are not created equal. They have a wide variety of welcome bonuses and bonus spending categories. For example, the Amex EveryDay® Preferred Credit Card gives you 3 points per $1 on the first $6,000 spent at supermarkets every year. Terms apply.
But the Chase Sapphire Reserve® gives you 3 points per $1 spent on dining worldwide. Depending on whether you eat out more or cook at home, one of these cards will be far more rewarding for you than the other.
Always do the research to learn which perks best line up with your spending habits.
4. Failing to understand the value of transfer partners
Rewards credit cards that aren’t affiliated with specific airlines will often have multiple airline partners that you can transfer your points to. It’s often true that you can get a higher redemption rate for your points through the airline than you can through your credit card’s travel portal.
It’s important to do the research and understand what a plane ticket would cost if you go booked through your card’s travel portal what it would cost when booked through an airline transfer partner.
Succeeding in the rewards game is all about finding the greatest value relative to the dollar you spend. Doing your homework on airline transfer partners can really elevate the value of your points.
5. Not double dipping with shopping portals
Many rewards programs have their own shopping portals, which allow you to earn extra points for shopping online. All you have to do is login to the portal, search for your favorite online merchant and then click through to shop. You will then earn bonus points, depending on the merchant you shop with.
Aside from airline and hotel programs, both Citi and Chase have their own shopping portals. As of right now, if you shop at the Gap website through the Chase Ultimate Rewards® portal, you’ll get an extra 2 points per $1 spent, which is in addition to the 1 points earned with the Citi Premier℠ Card. That pushes you up to a very favorable 3 points per $1 spent.
Most cards have a few different ways that they’ll let you earn points and if you’re not taking advantage of all of them, then you’re not getting the full value out of your rewards card.
How to Maximize Your Rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:
Airline miles and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Wells Fargo Propel American Express® card
Flat-rate rewards with no annual fee: Bank of America® Travel Rewards credit card
Premium travel rewards: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card
Planning a trip? Check out these articles for more inspiration and advice: Find the best travel credit card for you Chase Ultimate Rewards: How to earn and use them Earn more points and miles with these 6 strategies