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.

The post Credit Card Ground Rules appeared first on Easy Travel Points.

Spoiler alert; this is absolutely possible, anyone can do it and no, there isn’t a “catch”.  A few years ago, I was in the same boat you are and was determined to figure out how I could travel the world without spending a fortune.

While there is definitely some strategy that goes into getting the most value out of each point, let’s start with the basics.  Even if you never want to dive into the more complex parts of this hobby, you can save a lot of money traveling the world.

That’s why I have compiled this beginner’s guide to points and miles.  It contains all of the information I wish I knew when I started.

What Are Points And Miles

The best way to describe them is to think of old fashioned loyalty punch cards.  You know, the ones that give you a free smoothie after you purchase ten.  Points and miles work the exact same way.  They are what credit cards, airlines and hotels will give you to encourage you to be a loyal customer.  You can then redeem these points to be used for free travel with that company.

Easy Airline Example – You travel a lot for work and you always fly on your favorite airline.  After each flight you take, the airline deposits miles into your frequent flyer account.  After you have earned enough miles, you can redeem them for a free flight with that airline.

Simple Credit Card Example – You have a credit card that gives you a point for every dollar you spend when you use the card.  The credit card company will then let you redeem those points in exchange for a plane ticket.

Each airline, hotel and credit card company has a different set of guidelines for their loyalty programs.  Some programs are definitely more valuable and easier to use than others.  Which leads us to the big question; what are my points worth?

What Are My Points Worth

The next step in this beginner’s guide is understanding what your points are worth.  The simple answer is they’re worth whatever you can redeem them for.  I know that sounds like a cop out but here me out.

The truth is, each loyalty program values their points a little differently.  Some programs allow you to redeem each point at a fixed value which makes it easy.  Others give you a variety of ways to use them, so they can be worth more depending on how you choose to use them.

Regardless of how the program is structured, I’m going to show you how to figure out what each point or mile is worth.  All you need to figure out how much your points are worth is a little elementary school math.  Don’t roll your eyes at me math-haters, it’s easy, you can do this.

Dream Vacation Example – We’ve all seen those over-water bungalows in a gorgeous tropical location, right?  You find on the hotel’s website that you can book the bungalow for $1,000 per night.  Let’s pretend there are two loyalty programs that let you use their points to book that exact same room.  Program A requires you to redeem 100,000 points per night and Program B requires you to only use 50,000 points per night.  In this example, we can see that Program A’s points are worth 1 cent each ($1,000 / 100,000 = $.01).  However, programs B’s points are worth double at 2 cents per point ($1,000 / 50,000 = $.02).

Using this basic calculation, it will help you figure out what each loyalty program’s points are worth.  While programs that have a fixed redemption value are easier to understand, using those that don’t have a fixed value can help you get more value out of each point.  Figuring out how to get the most value out of each point is what makes this hobby so much fun.  Plus, that’s how you’ll be able to travel around the world for less.

How Do I Earn Points & Miles

Remember, this is just a beginner’s guide, so this isn’t a complete list.  However, here are a few of the easiest and most popular ways to earn points and miles.

Traveling

While not the most efficient, the most popular way to earn points is to travel.  Each time you fly, or stay at a hotel, you earn points or miles with that program.  Unless you are a road warrior, it can be tough to earn enough points to use on a vacation.

Credit Card Sign-Up Bonuses

The fastest way to earn points is to sign up for a credit card that offers you a welcome bonus.  Each credit card will have their own unique offer but each one typically will require you to spend a minimum amount within a specific time frame in order to qualify for the bonus.  Also, the sign-up bonus for a card can fluctuate throughout the year, so keep an eye when for when they increase.

My favorite card for beginners is the card_name.  bonus_miles_full  You can read here why I love this card and recommend it so often.

Credit Card Purchases

You can earn points and miles using a travel rewards card to make everyday purchases.  Depending on how much you spend each month, this can really add up quickly.  Most cards also have “bonus categories” which allow you to earn extra points on certain purchases.  For example, a card may offer you 3 points for every dollar you spend at a gas station.  So if you spend $40 to fill up your tank, you earn 120 points.

Shopping Portals

A lot of retailers partner with various shopping portals to give you points for by their products.  In fact, just the other day, I earned 110 points with an airline when I bought pizza for dinner.  I first went to the sopping portals and found the pizza chain that I was going to order dinner from.  I clicked on their logo which took me to the pizza chain’s website where I ordered dinner.  By taking this one extra step I was able to earn miles for my next vacation.

How Do I Redeem My Points

The last, but also the most important, topic of this beginner’s guide is knowing how to redeem the points you earn.  After you have accumulated a healthy stash of points, the fun of planning your next trip begins.

Being flexible is the key to getting the most value out of your points.  With our trip to Hawaii, we had to leave a day earlier that we had wanted or it would have cost us almost twice the amount of points to go.  With that in mind, here are a few ways to use your miles to travel the world.

Airline Miles – Each airline has an award chart that will tell you how many miles you need for specific redemption options.  You can use these miles to fly on that airline or any of the airlines in their “alliance”.  This will allow you to visit virtually any location in the world.

Hotel Points – Hotel points are very similar to airline miles.  Each hotel chain also has an award chart that will show you how many points you need to stay at each of their properties.

Credit Card Travel Portals – Some credit cards will allow you to redeem their points, at a fixed rate, with almost any airline or hotel.  For example, a credit card issuer can value each point at 1.25 cents if used to book travel through their portal.  If you found a great flight to Europe for $500, you could book that by using 40,000 credit card points.  While you could get more value redeeming your points a different way, this is a very easy and straightforward redemption option.

Credit Card Transfer Partners – Some credit cards have also partnered with various airlines and hotels to allow you to transfer their points to these partners’ loyalty programs.  Once you transfer the points to a partner, they can be used as described in the first two options above.

Final Thoughts

I know there’s a lot of information in this beginner’s guide to digest but don’t worry, you’ll quickly get the hang of it.  Be sure to sign up for our newsletter, follow us on Instagram and Twitter and like us on Facebook for helpful tips and guides to help you along the way.  I absolutely LOVE helping people travel plan their dream vacation, so if you have any questions along the way, please Contact Me!  I’m always available to help.

The post A Beginner’s Guide To Points & Miles appeared first on Easy Travel Points.