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I'm someone who usually focuses on the long term when it comes to my money. I always knew to turn down a credit card for a free pizza, t-shirt, or frisbee in college. Once I graduated and began to establish positive credit, I started to see bigger and more tempting offers for tens of thousands of free miles or points for getting a new card.
It didn't take long for me to learn that building balances for free flights and hotel nights is a lot easier if you leverage both the bonus and the miles and points earned from daily spending. Here's a look into how I balance signing up for new cards and using the best card for my daily spending needs to get maximum travel at the lowest possible cost.
Getting new cards is okay - just not too many at once
When I tell people about how I earn miles and points with credit cards and that I have 15 open right now, they often balk and ask what that does to my credit. I'm very in tune with my credit, and after opening dozens of cards over the last decade, my credit score has only gone up.
Your credit score and report are complex measures of your borrowing history. While it is true that opening and closing new accounts can harm your credit, a higher number of accounts with a perfect payment history helps your credit. Over the long term, it's best to keep accounts open as long as possible. However, you shouldn't be too scared about opening up a new one from time to time.
One metric to help you stay within reason is the 5/24 rule from Chase. This rule says Chase won't give you a new credit card (from a list of participating cards) if you have opened five or more accounts in the last 24 months at any issuer. Stay below 5/24, and you should be in good shape.
The only time to really avoid opening new cards is if you plan to apply for a new mortgage loan or auto loan in the next six to 12 months. If you don't have any short-term need to get approved for a loan at the best interest rate possible, you are usually safe opening a new credit card.
Make sure you get the best rewards for each purchase
From the grocery store to the gas station and everywhere in between, most of us have to spend money at least once in a while. When you buy something, the best way to do so for most people is with a credit card.
Credit cards offer excellent protections compared to cash and usually include a $0 fraud liability. As long as you can pay them off in full each month by the due date, you'll come out ahead after factoring in the miles and points you earn if you pick the right card.
I carry five cards in my wallet daily to get the best possible bonus on every dollar I spend. That means 4x points at US supermarkets with my American Express® Gold Card, 3x on travel (excluding a $300 travel credit) with Chase Sapphire Reserve, 5% cash back (5x points) on my internet bill (up to the first $25,000 spent each account anniversary year)with my Chase Ink Business Cash Credit Card, and 1.5% cash back (1.5x points) on my "everywhere else" purchases with Chase Freedom Unlimited.
Funnel miles and points into favorite programs
For me, the most valuable reward is free and discounted flights. Aside from one time when I treated myself and my dad to a business class trip to Israel, I want to squeeze as many flights as I can out of my miles and points. My youngest is not far off from losing lap child status, meaning I'll be buying flights for four when traveling with my family.
To get the best combination of value and flexibility from those miles and points, I generally work to earn in the Chase Ultimate Rewards and American Express Membership rewards programs. A combination of 1:1 transfer partners and great earning rates mean that's where I want to earn most.
I also have cards for some programs I use regularly. That includes the United Explorer Card that gives me free checked bags, the Marriott Bonvoy Boundless Credit Card that gives me a free night each year (valued at up to 35,000 points), and others.
Stop paying full price for travel
Travel can be expensive, but you can save a bundle with free flights, hotels, and other travel thanks to credit card rewards. If you pay off your cards every month and don't pay interest, you'll come out much further ahead than if you used cash or debit.
Don't settle for a card that doesn't reward you. Whether you want cash back or travel rewards, there's probably a credit card out there to meet your needs. All that's left to do is apply, earn bonuses, and pick the best card for every purchase. If you do, free travel may be just around the corner.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
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