Even if your credit card has a 0% promotional rate on balance transfers, the balance transfer fee could be hundreds of dollars depending on the amount of the balance you transfer.
Fees aren’t the only reason you should avoid balance transfers and cash advances. These transactions don’t earn you any rewards. And, they take up room on your credit card, leaving you with less available credit for purchases that will let you earn travel rewards.
Earn the signup bonus.
Lots of travel rewards credit cards offer very lucrative signup bonuses. Some of the bonuses are so big that you earn a free flight right away. To earn a signup bonus, you typically have to spend a certain amount on your card within the first 90 days of opening your account. The clock starts ticking the date you open your account, not the date you receive the credit card. So, in reality, you could have about 80 to 85 days to earn the spending bonus depending on how long it takes you to receive your new credit card in the mail.
Some credit cards even let you earn an additional bonus if you add an authorized user to your account. The authorized user doesn’t have to make any purchases to earn the bonus. But, having an authorized user can not only help you earn the spending bonus, it can also help you earn rewards. Just make sure you can afford to pay off the purchases the authorized user makes on the credit card.
Choose a credit card with a signup bonus that’s easy to earn. The minimum spending threshold should be low enough that you can afford to pay off your balance in full each month. For example, a $3,000 spending threshold means you’ll need to charge and pay off about $1,000 each month. If that’s out of your budget, look for a travel rewards credit card with a lower spending bonus.
Try to meet the spending threshold as quickly as possible. With many credit cards, it will take about 4 to 6 weeks after you’ve earned the bonus for it to be credited to your account. Be patient, that means it could be about five months from your account opening before you actually receive your spending bonus.
Unless you can handle spending across multiple credit cards, don’t try to earn the spending bonus on more than one credit card at a time. Also keep in mind that many credit card issuers only allow you to earn one spending bonus every two years. Or, in some credit card issuers, you may only be able to earn one spending bonus in the lifetime of that credit card issuer. Read the fine print to find out whether you can earn another spending bonus from a credit card issuer and the time period you may have to wait between earning bonuses.
Join the hotel and airline loyalty programs.
Your credit card will pay rewards on your purchases. Most hotels and airlines have loyalty programs that will also pay rewards for your stays and flights. Signing up for these programs and free. Make sure you use your loyalty rewards number during booking and use your credit card to earn even more rewards.
Let’s say, for example, you’re booking a flight on Delta Airlines and staying in a Marriott hotel. Use your Skymiles number and your Marriott rewards numbers when you’re booking to earn rewards with those programs. Plus, earn rewards on your credit card for the purchases.
Stick to the same hotel and airline brands as much as you can. The point of loyalty programs is to reward you for frequent usage. The more you use the same brands, the more points you can earn. You’ll also move up in status levels which give you additional perks plus bonus points on your flights and hotel stays.
Transfer points between programs.
Once you’ve accumulated points in different programs, you may be able to combine them in a single program and redeem for a trip. Before you make the transfer, read the rules to learn how you can transfer points and whether you’ll lose any points in the transfer. Ideally, you want to transfer points with a 1:1 ratio so that you keep all the points you’ve worked so hard to earn.
Redeem your rewards right away.
Depending on the credit card, you can either use your rewards to book travel via the card’s online booking tool or you can redeem your rewards for a statement credit. If you choose the statement credit route, you’ll have to charge the travel to your credit card then use your rewards to credit the account for the amount of the travel. If you don’t want to end up paying off the balance, redeem your rewards right away. Otherwise, you might have to pay at least the minimum payment to keep your account in good standing while you wait for the statement credit to post to your account.
Always pay on time to avoid forfeiting your rewards.
The fine print of your rewards credit card will include the things that can make you lose your credit card rewards. Most commonly, late payments will cost you all the points you’ve accumulated. This is the last thing you want after you’ve worked so hard to build up rewards. Set a reminder a few days before your due date so you won’t forget to make your credit card payment. Or, set up an automatic payment just in case you forget your payment.
Pay attention to rewards program changes.
Credit card issuers can and do change terms of rewards program terms frequently. Don’t assume you’re grandfathered into a program. Pay attention to inserts that come with your credit card statement that explain any changes that have been made to your credit card rewards program. You’ll need to alter your spending habits to continue maximizing the rewards you’re earning.