As I said in my first post on what the world of points and miles is, I explained that this hobby can be as simple or as you want it to be. What I don’t see often enough is that knowing some of the basic rules in this game can help with your planning. I’m not talking about the Chase 5/24 rule or the Amex 2/30 rule, we will get to these though in another post. I’m talking about the most basic of rules that credit cards expect you to uphold so you don’t damage your relationship with the banks.
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What are the most basic of credit card rules you to be aware of
Chances are you are reading this because you want to learn more about the points and miles world or you want a refresher. If you want to earn points in this hobby you are going to open up more than one card, most likely. But some of the basics don’t get covered as often as they should in depth, so I’m here to help.
One of the first things you need to know about entering into this world is that when you apply for any new travel credit you are entering into a contract. There are a few parts of the contract that you must be aware of.
First off, in order to earn those lucrative sign on bonuses (SUB) you will have a “minimum spend” on the credit cards. That minimum spend could be $3,000 in 3 months, $6,000 in 6 months or even $15,000 in 3 or 6 months.
Truly, whatever the credit card companies settle upon is what you’ll need to follow. If you want to earn their “sign on bonus,” you will need to meet the minimum spend in the allotted time they give you. It starts on the day you apply for the card, not the day you are qualified for it. If you have to do a recon call, and are approved, it doesn’t start on that day.
Next, a “sign on bonus” or SUB is what the credit card company is offering you by spending on their card. That sign on bonus could be 60,000 points or 100,000 points or even more depending on the card. Sign on bonuses are where you can get the most points for potentially whatever amount of spend the carrier wishes. SUBs are the easiest way to earn the highest amount of points in a short amount of time.
You can also earn points well by knowing the multipliers of each card but the SUBs are truly where the highest yield of points earned is. I focus heavily on the multipliers when I am in between sign on bonuses.
The last bit of that contract is that you MUST hold the card open for at least ONE YEAR in order to keep those points you earned. It doesn’t mean you need to spend more after you’ve hit the minimum spend, it just means you need to keep the card open 365 days. At the year mark is when you can reevaluate if that card is worth a slot in your wallet to hold long term.
Typically the first year is always worth opening the card for the SUB but after that you should always be reassessing a card’s value year after year. If you cancel the card prior to the year mark you run the risk of the credit card company clawing back your points and if the card is closed, then potentially charging you a fee.
Other things to consider
Keep in mind that no application is ever a guarantee of approval. A bank has the right to approve or disapprove of any application at any time. We are at their mercy. If you are going to play in this hobby, know that we play by their rules as best as we can. There is a term you will see in this hobby. YMMV. Your mileage may vary.
Things to keep in mind. Technically, not rules but things to keep in mind.
1. Always always ALWAYS pay your credit cards off in full every single month. The annual fees on these cards is exceptionally high and any interest you would pay at the 20+ APR or higher would just offset any of those benefits. PAY THEM OFF!!
2. NEVER miss a payment. If you are doing number 1, then you are fine. Carry on. My credit score has only increased because of this hobby but we definitely don’t need any damaging marks on our credit if we wish to continue in this game.
3. Make sure you open new credit cards that fit into your normal everyday spend. Have an insurance payment coming up, open up a credit card. Big household updates or spend, open up a credit card. Large payment of any kind, open up a credit card. This is how I personally meet my minimum spends. I hold off until I know I absolutely know I can meet a new sign on bonus.
4. Track and document EVERYTHING! Seriously, you’ll thank me later. I have several spreadsheets and I am always trying to streamline this. Document what day you apply for a new credit card, what the actual SUB offers are (I screenshot everything here) and the length of the minimum spend contract. Track your 5/24 status. Track it ALL! This isn’t necessarily a rule, just helpful guidance.
5. This is a more personal one that I have learned after 4 years. Have a travel plan in mind before opening a new credit card. Knowing where you want to go and how you want to get there and working backwards, can help you open up the right cards strategically. More on that later.
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We are going to go over each of the carrier’s rules separately. You can read them in my next few posts as I break down rules from Chase, Capital One, American Express, Citi and even Wells Fargo. If you think I need to break down others or think I’ve missed something, let me know.
If you want to read more on credit card points and miles, read my blog posts here.
I share tips on how to travel for less and maximize credit cards to earn more points. Over the last 4 years, we’ve redeemed $138,000+ in flights and hotels. Pinch me – absolutely insane! YES, it’s totally duplicatable!
Follow me on any of my socials for real-life strategies, and feel free to DM me – I’m here to help! 🩵
This post was written by a guest contributor in collaboration with iCruiseApp Travel & Tours. While the author is not a travel agent, our travel agency is proud to support diverse voices and perspectives that inspire your next journey.
