The most lucrative rewards credit cards -- those with the best cash back or points rates and most useful additional perks -- are typically only available to people with extremely good credit. If you want to get and keep these cards, you’ll usually need a FICO score of 750 or higher, which is obtained by carrying low balances and paying bills on time. If you’re in the market for a home or auto loan, those applications can bring your score down, so apply for new cards first.
Similar to the affect a home or auto loan has on bringing down your credit card score, credit card applications -- known as “hard inquiries” on your credit report -- also create a temporary dip of a few points on your credit score. Applying for multiple cards at the same time ameliorates these affects by only giving your score one point reduction instead of several.
When you sign up for a new reward card, to earn the many thousand-point bonuses originally advertised, you typically have to spend a hefty minimum amount in the first three or six months that you have the card. A fast way to do this, which is beneficial in the long run if the interest rate is low or waived for the first year, is to consolidate debt from other credit cards or sources to reach the minimum spend. Check the fine print of your terms and conditions first to make sure transfers qualify.
While it’s important to use your rewards cards frequently to rack up enough points for travel, use a mix of cards to achieve the most points possible. Keep both an American Express card with big rewards and a Visa or Mastercard you can use places where American Express is not accepted. Combine an airline-specific card that includes benefits such as priority boarding and free checked bags with a non-affiliated card that allows you to transfer miles to other airlines when you need different flights.
According to Forbes’s Guide to Reward Devaluation, one of the best ways to make sure you are getting the full value out of your rewards cards is to redeem points often. You not only keep points from devaluing, but also from expiring. Many major airlines remove all points from your account if there has been no activity in 18 months. A tantalizing travel goal will also remind you to use your rewards card as much as possible and change your habits toward efficient use.
You many want to rack up as many Starwood points as possible, but if your Chase card gets you five points on office supplies, use that one on printer toner. The perks of using multiple rewards cards at once is the opportunity to earn more than one or two points per dollar on your purchases. Keep a card in your wallet listing which card is for which type of purchase -- groceries, gas, travel, restaurants -- to maximize your spending.
When you are juggling multiple rewards cards, it’s easy to miss the fact that you’ve earned enough points for a free round-trip to Europe if you have to check each individual account to find that information. Add all of your rewards programs to a tracker such as UsingMiles or AwardWallet so you can see all your balances and transfer options in once place. You'll earn trips faster by transferring miles between accounts.
