The points and miles hobby is a fun but complex hobby. There are so many rules, and they always seem to change as the issuers offer new points programs and products. However, there are a couple of credit card mistakes that seem to be common, especially those just starting in the hobby. In fact, I’m guilty of making many of these mistakes in the past.

In this video/post, we’re reviewing our top eight mistakes and what you should do instead.

1. Not knowing your credit score or history:

One of the most important factors of whether you can get a specific credit card is your credit score and history. Sites like Credit Karma and Credit Sesame can provide your score and history for free, as well as tell you how many cards you applied for in the past and when. Also, Credit Karma can tell you the odds of approval for a card based on your credit factors. For example, the Chase Sapphire Reserve and American Express Platinum are both premium cards, so they tend to require a strong credit score and history in order to get an approval. Knowing your odds before applying can be super helpful when determining which cards to pursue.

2. Not understanding your travel needs and goals:

This is really important when developing your strategy for points and miles. Many cards have specific bonus categories, so it’s important to understand whether they match up with your general spending. Also, your travel preferences and goals can greatly influence which card is best for you. For example, if you prefer staying at Starwood Hotels, then you’re probably best served with an American Express card, like the AMEX SPG. If you prefer to stay at an Airbnb or boutique hotel, you might be better off using a flat rate travel rewards card like the Barclaycard Arrival Plus or Capital One Venture card.

3. Avoiding annual fee cards:

I can’t tell you how many people I know who have told me that they wanted to get the Chase Sapphire Reserve, but opted for the Preferred instead since they couldn’t stomach the $450 annual fee. However, when I broke down the cost and factored in the annual travel credit of $300 and Global Entry fee credit, it actually made sense to get the Reserve card. While you shouldn’t pay an annual fee if you’re not getting the full value, I always recommend evaluating the big picture to see if it makes sense. For more information, check out our “Credit Card Annual Fee” video/post.

4. Not understanding issuer rules:

I hear a lot of stories of folks who apply for a card, then try to apply for another card the next week, only to get denied for too many credit inquiries. There are some basic rules on what you should and shouldn’t do, and we’ve covered them in our “Tips and Tricks When Applying for a Credit Card” video/post. Keep in mind too that each issuer has specific rules too, so you’ll want to be careful and strategic when planning your applications.

5. Not challenging an issuer’s decision:

Even those of us that have been doing this for years get rejected for new cards. In fact, I would argue that the longer you have been involved in this hobby, the more likely you are to have too much available credit. This can cause issuers to be hesitant when giving you a new card and additional credit. If you do get rejected, don’t hesitate to call the reconsideration line and ask whether there are any options. We covered some of these tactics in the “Tips and Tricks” video/post.

6. Not calculating the value per point when redeeming rewards:

How and if you redeem points is often dependent on the value that you get. Sometimes, I’ll opt to pay rather than redeem if I don’t feel like I am getting a decent cents per point value. For some basic guidelines, check out the Points Guy’s monthly valuation of points and miles currencies. He does a great job of explaining how much he thinks each point is worth. This can give you an idea of how much you should expect to get when redeeming points. When booking a trip, I usually divide the dollar value by the equivalent number of points needed to get the per point value. This helps to inform whether I want to transfer the points to a travel partner or book through a travel portal.

7. Being too aggressive with your spending:

If you get a new credit card, you’ll want to be careful not to use up your credit too soon. Remember that the issuers get nervous when they see risky spending patterns. This is especially true if you don’t have a long credit history. One of the easiest ways to get flagged as high risk is to max out a new credit card.

Also, the flip side is to make sure you’re not spending too much that you can’t pay off your bill. The points hobby is only lucrative if you don’t carry a balance and are able to pay off your bills. Any interest that you’ll have to pay will definitely negate the value earned in points.

8. Not developing a relationship with the issuer:

I hear about a lot of folks who cancel their credit cards as soon as they meet their minimum spend and earn their opening bonus. This is a bad idea since you’re basically showing the issuer that you were just churning the card for the bonus. A more long-term and strategic way of thinking is that you want to build a relationship with these issuers. This will allow you to get new cards and products from them in the future. For example, I have a ton of Chase credit cards, so I decided to move my personal and business checking over to Chase in order to help further that relationship. When I recently applied for the Ink Business Preferred card, it was a lot easier to get an approval since I had a history of doing business with the bank.

Do you have any extra tips or suggestions, especially from those of you who have been doing this for a while?

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