Picture this: booking a first-class flight from the United States to your dream vacation spot in Europe, then finding your preferred hotel and booking a few nights there — for free. This is the power that credit cards offer to consumers, but, in all honesty, learning the ins and outs of credit cards is like a full-time job (no, seriously, I know someone that earns a full-time income from credit card points). Please consider this article as your Roadmap to becoming a Credit Card Pro.
Bottom Line Up Front (BLUF): Credit cards can positively change the way you view everyday purchases since you can use them to earn cashback, free vacations, and so much more. However, for you to find success in credit cards, you must pay your balances off each month.
Step One: Get Rewarded for Everyday Spending
Getting rewarded for everyday spending is a sure-fire way to start accumulating points or minimize your expenses with cashback. Routine purchases like groceries, gas and streaming services are popular bonus categories for a variety of cards. For example, the Blue Cash Everyday Card from American Express offers a 3% cashback at U.S. supermarkets up to $6,000 a year, 2% cashback at U.S. gas stations and select U.S. department stores, and 1% cashback on other purchases, making this card an excellent choice for everyday purchases (well, hence the name). With a $0 annual fee, this card doesn't cost the consumer anything — unless, of course, the balance is not paid in full by the end of the month, then variable interest is charged.
Right now, the Blue Cash Everyday Card from AMEX offers a $200 statement credit after spending $2,000 in the first 6 months PLUS a 0% introductory offer for 15 months, then 13.99% to 23.99% (variable) thereafter. If you'd like to earn cashback and focus on debt paydown over the next 15 months, then now may be a good time to add this card to your arsenal.
*A notable mention: Blue Cash Preferred Card from American Express. This card offers a $300 statement credit after spending $3,000 on purchases in the first 6 months. There is a $95 annual fee (waived the first year), but this card yields higher rewards than its counterpart, the Blue Cash Everyday Card. This card offers 6% cashback at U.S. supermarkets (for the first $6,000 per year, after that 1x) and on U.S. streaming services, 3% at U.S. gas stations and on eligible transit, and 1% on other purchases. Right now, this card is offering a 0% introductory offer for the first 12 months, then 13.99% to 23.99% (variable).
Step Two: Consider Future Purchases
Is it time to replace your appliances or upgrade your mattress? As you start to leverage credit card points to your advantage, consider any future purchases you will be making and prioritize them. With the right plan in place, you can maximize your total rewards by aligning future purchases with new credit cards.
In 2021, my husband and I upgraded our washer and dryer set, then purchased new couches for the living room. We reviewed which cards were offering the most sign-up bonus rewards. We had our eyes on the American Express Platinum card for a while and the minimum spend requirement for the sign-up bonus matched what we expected to spend anyways between the appliances and furniture, so we opened one. It's likely that if you have multiple large purchases in one year, you can spread them out enough to meet the sign-up bonus requirements on two or more cards — however, be wary of the 5/24 Rule.
This step can be completed with any card that you'd like to add to your arsenal, so if you’d like to focus your efforts on award flights and free hotel nights, then the Chase Sapphire Preferred Card may be an excellent fit for you. Currently, the card is offering a 60,000 sign-up bonus, worth up to $750 toward travel when you book through Chase’s exclusive rewards portal. With points eligible to transfer to different airline carriers, this card can make an excellent first addition. This card also offers a variety of other benefits, including a DoorDash subscription, which helps me (and maybe someone else reading this) feel a little less guilty about ordering take-out because I’m saving on the delivery fees.
*A Notable Mention: The American Express Platinum Card carries a hefty annual fee, but for Active Duty military members, the annual fee is waived. This card offers similar benefits to the Chase Sapphire Preferred Card, including an exclusive rewards portal and credits towards specific entertainment subscriptions (Peacock, Audible, etc).
Step Three: Be Careful of Becoming a “Credit Churner”
Big credit companies, like Chase, monitor cardholders to protect against credit churners. Credit churners are consumers that open new credit cards to meet the sign-up bonus requirement, then cancel the card a few months later. I have heard of some people being barred from future cards and having their points clawed back, so if you must close one out, please make sure it's at least 6 months to 1 year after you opened the card. Additionally, it's just in your best credit interest (no pun intended, I promise) to preserve your score and keep lines of credit open.
Credit Card Pro Bonus Tip: Continue Earning Points through Referrals
With responsible spending and following the intentional steps above, becoming a credit card pro is within reach. This also means that you can help friends, family, cat sitters, and others achieve their credit card goals, too. Credit card companies reward consumers that refer new cardholders to them with points, so after earning the sign-up bonus, you can still earn a high volume of points through your referral link.
The steps above are a brief overview of leveraging credit card points and earning perks like free reward flights, hotel stays, and more. Which card is next on your list?
Note: Credit card offerings change frequently and new cards are introduced, so be sure to check back often for the most up-to-date information.