Smart Card Opening: Maximize Rewards with Strategic Approaches
Now that you have a good idea of what cards cover specific categories let's talk about opening cards and how to be smart with the process. The first card you open should cover your biggest spending category with the highest multiplier.
Here are some things to pay attention to before opening a new card:
-
- Make sure the card isn't out of your credit range. If you're unsure where your credit score is, check out Credit Karma; it's free and easy. With some searching, you will find out if the card is for average, good, or excellent credit.
- You also want to ensure that the current sign-up bonus is above-average. Some card companies will say “Special Offer, Highest Bonus Ever, Limited Time Offer, ETC. A quick search online should tell you what people have received in the past. Do this so you're always getting the most points. *Pro-Tip: Take a picture of the offer you are signing up for just in case you forget how much you need to spend or how fast you need to spend it.
- Read our Credit Card Sign-up Restrictions post before applying for any card. You don't want to be denied for something silly.
Apply for the card to get started. If you get approved immediately, start putting a plan together to meet your spending requirements and wait for your card to arrive. If you get denied for one reason or another, it’s not the end of the road. You can call the reconsideration line and ask if they will reconsider your application. Most times they need more information, and sometimes, they can move available credit from another card to allow you to add a card. There are many reasons why applications get denied, but you will be surprised how often you will get approved after calling the reconsideration line.
Once approved, keep track of the date the card was opened. This comes in handy when it's time to renew the annual fee. We use a spreadsheet to track all our cards. *Pro-Tip: you must keep every card open for at least a year from the date you activate the card. If not, some card companies will claw back the sign-up bonus from your account and not allow future sign-up bonuses.
Use your card for all of your spending, not just for the category you opened the card for until you hit your sign-up bonus. After you receive your sign-up bonus, and if this is your only travel reward card, use it for all spending. If you have other travel cards, this card should be used whenever you spend within the category it was opened for. Over time you will have a go-to card for each spending category: travel, airlines, groceries, gas, dining, and all other spending. *Pro-Tip: label all your cards with a label maker so you always know which card to use for each
category.
Make sure that you familiarize yourself with all the extra benefits of the card besides the points multiplier. For example, a lot of cards will have TSA Precheck or Global Entry credits, airline incidental credits, statement credits, Uber credits, lounge access, etc. You need to take advantage of every credit you can to help offset the annual fee. Doing this is the best way to maximize your value. *Pro-Tip: To keep track of the details of each card, we use MaxRewards. This app helps you organize your wallet to maximize your Pursuit of Points.
Once your card comes up for its annual renewal, you must decide if it is worth keeping or if the card should be downgraded or closed. A lot of information should go into this decision.
Stay tuned for specific information to consider before paying an annual fee or closing a card.
