Credit Card Ground Rules

One of the fastest and easiest ways to earn points and miles towards your next vacation is through the use of credit cards.  Here is a list of a few credit card ground rules that will help you along the way.

By using them to purchase the things you buy every day, along with the lucrative sign-up bonuses, the points can really add up quickly. However, not using your cards correctly can cost you valuable points, or worse. If you follow the rules, you will be able to maximize the points you earn and avoid some serious pitfalls.

Pay Your Bill In Full EVERY Time

The first credit card ground rule is to pay your bill, in full, EVERY MONTH. Using credit cards is the fastest and easiest way to accumulate points and miles.  If you’re going to use them, you need to do so responsibly. One of the quickest ways to erode the value of your points is to carry a balance on your cards. The fees and interest you’ll be charge will offset the value of any points you will earn by using them.

Losing value on the points you earn is the smaller problem you will encounter if you don’t use your cards wisely.  The bigger problem you’ll have is that you will ruin your personal financial situation.  Let me be explicitly clear, if you do not pay your credit card bill in full, every month, DO NOT use credit cards or open any new accounts.  No vacation is worth going into debt for.

I know a lot of people who prefer using a debit card because they don’t like to get a large bill at the end of the month.  If you’re like this, there’s nothing that says you can’t pay off your purchases early.  Take a look at your account each week and send off a payment to cover what you’ve spent.

Do A Little Planning

I’m not suggesting you sit down and write a 50 page thesis before you start earning points.  I am recommending that you have a general idea of what you’re working towards.  Set a travel goal and work backwards from there.

If your bucket list includes staying in an over-water bungalow, don’t open a hotel branded credit card whose points can’t be redeemed where you want to stay.  Also, take a look at where you spend the most of your money and find a credit card that rewards you for those purchases.  Which brings me to my next rule…

Take Advantage Of Bonus Categories

Several rewards cards will offer you bonus points when you use their cards to make purchases in select categories.  Some of the most popular categories are travel, grocery stores, gas stations and restaurants.  Review your spending habits and see where you spend the most money.  Then find a card that will reward you for making those purchases.

For example, the card_name will earn 3x the points on dining and the card_name will earn triple the points on travel.  The Chase Freedom Flex card has rotating categories each month where you can earn five times the points on those purchases.  Just be sure you use the right card at the right time to maximize the amount of points you’re earning.

Cards With Annual Fees Can Be Great

Most people’s first reaction to credit cards that have a high annual fee is to run away.  While each card is not always a good fit for everyone, they are a good fit for a lot of people.  Credit cards that charge an annual fee will typically come with some really great benefits.

These benefits, along with the sign-up bonus, can easily be more valuable than the cost of the annual fee.  In fact, a lot of times, the card issuer will even waive the annual fee during the first year.  This will give you sufficient time to use the card and see if how valuable those benefits are to you.

Get Your Sign-Up Bonus

The quickest way to boost your point balance is through credit card welcome offers. Most cards will give you a bonus after you spend a certain amount in a specific time frame.  For example, my favorite travel card for beginner’s (here’s why I love it) is the card_name.

bonus_miles_full  This is an incredible offer so you don’t want to make a mistake that will cause you to miss out on this bonus.  Here are a couple things to think of when it comes to a sign-up bonus:

Your Spending Habits – Don’t sign up for a credit card that requires you to spend $5k in the first 3 months if you typically only spend $500/month.  Plan ahead to make sure you’re able to meet the spending requirement within the required time frame.

Also, don’t overspend just to meet a welcome bonus threshold.  It makes absolutely ZERO sense to spend $1k on something you don’t need, just to get $500 worth of points.  If you can’t meet the spending requirements through your normal spending patterns, DON’T open a new account.

When Does The Clock Start Ticking – Generally, the time starts once your application is approved and not when you receive or activate your card.  You don’t want to miss out on a large sign-up bonus by miscalculating the time you have to meet the spending requirement.

Only Actual Spending Counts – The only things that count toward the required spending threshold is actual spending.  Annual fees, other fees, balances you transfer from other cards, etc. don’t count.  Speaking of fees…

Pay Your Bills On Time

Make sure you pay your credit card bills on time, every time! Paying your bills late can affect your credit score and your ability to qualify for the best offers. Plus, you have to pay a late fee and interest if you’re late and nobody likes throwing money away on fees.

Some people recommend using your bank’s auto-pay features to prevent this from happening but I don’t like using it.  If my bill is paid automatically, I’ll get into the bad habit of not reviewing the charges each month.  While it doesn’t happened a lot, I’ll occasionally find charges for things I thought I cancelled or fraudulent charges when I review my bill. A better practice would be to set yourself a monthly calendar reminder so you don’t forget to pay it on time.

Don’t Let Your Points Expire

Each program has different requirements for keeping your miles from expiring.  And some, like Delta’s Skymiles, never expire.  While each one is different, most of them make it really easy for you to keep your points.  A simple thing, like making a purchase through their shopping portal, can reset the expiration clock. Set an annual reminder for yourself to review each of your loyalty programs to make sure none of your points expire.

Don’t Forfeit Your Points

Another important ground rule for credit card points is don’t forfeit any of your hard-earned points.  There may be a time where you sign up for a card later decide it’s not a good fit for your goals.  If this happens, be sure to redeem all of your points before closing your account.

If you have a cobranded airline or hotel card, you don’t have to worry about this because your points are automatically transferred to your loyalty account each month.  You worked hard for your points, don’t give them away!

Final Thoughts

Earning points and miles isn’t rocket science.   Yes, you’ll make a few mistakes along the way but that’s OK.  By following these simple ground rules you will get the most out of your credit cards and avoid big mistakes.  Just keep moving forward and soon you’ll be booking your vacation of a lifetime.

Disclosure: Easy Travel Points, LLC has partnered with CardRatings for our coverage of credit card products. Easy Travel Points, LLC and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. This compensation may impact how and where links appear on the site. This site does not include all card companies or all available card offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.