Advertising
Advertising

How to Maximize Credit Card Miles Without Ruining Your Credit Score

How to Maximize Credit Card Miles Without Ruining Your Credit Score

Credit card perks can be very lucrative. Apply for one or two good cards and you could be enjoying free flights, free hotels stays, and more.

In fact, the perks can be so good that some people apply for a handful of new cards at one time, just to maximize the points and rack up hundreds of thousands of frequent flyer miles.

If you’re like me, your first response is probably, “Uhh, that’s great, but won’t that ruin my credit score?”

As it turns out, there are two simple things that, if you do them, will allow you to maximize your credit card perks without ruining your credit score.

What are those two things? Keep reading and I’ll tell you…

Advertising

Step One: The Secret of Credit Card “Churners”

There is a small group of travelers that call themselves, “credit card churners” because they apply for card after card and churn through as many applications as possible.

Then, they spend the minimum amount needed on the credit card to get the frequent flyer mile bonus (for example, $1,000 in 3 months) and move on to the next card. Some people are routinely cycling through 10 cards at once!

This strategy allows them to rack up over 1 million frequent flyer miles per year, but here’s the most surprising part: most of these people have excellent credit scores of 760 or higher.

How do they keep their credit score high?

It’s pretty simple actually: they pay their balance in full each month. It sounds simple, but if you’re a responsible spender and don’t carry debt on your credit cards, then it’s unlikely that a new card (or even 5) will hurt your credit score in the long run.

Advertising

Let’s talk about why this is true…

How Your Credit Score Actually Works

Here’s why your credit score is rarely hurt if you get a new card and pay your balance in full each month.

Let’s say you want to try this strategy out and you apply for a new credit card to get some frequent flyer miles. When you apply for a new credit card there is an inquiry on your account. New credit inquiries usually drop your score by a few points, but new inquiries only make up about 10% of your overall credit score, which means the drop is small. This dip is also short term.

As a general rule, if your credit score is above 720, then you’re in good position and have nothing to worry about when it comes to this initial drop.

At the same time, however, your new card will probably help your credit utilization ratio, which is also part of your credit score.

Advertising

Here’s an example of how credit utilization ratio works. Let’s say that right now you are spending $3,000 and your total credit limit is $10,000. In this case, your credit utilization ratio is 30% ($3,000/$10,000).

When you apply for a new card, let’s say your overall credit limit increases to $15,000. Your credit utilization ratio drops to 20% ($3,000/$15,000). A lower credit utilization ratio helps your credit score because it shows that you are responsible and that you are more likely to stay within your spending limits.

Remember, your spending habits should stay about the same because you’re only getting the new card so that you can reach the minimum spending limit to get the frequent flyer miles and then you’re filing it away or cancelling it a few months later.

For this reason, many credit card churners actually see their score increase over time. Some of them have more than a dozen cards and still maintain credit scores above 780.

Step Two: Where to Find the Best Deals

If you want to maximize your credit card perks, then staying up to date on the latest deals is critical. Credit card companies change their bonuses, launch new cards, and remove old ones on a continual basis.

Advertising

If you’re looking for a simple way to keep track of the best deals going on right now, then The Credit Card Fly is a great place to start. It’s a free email newsletter that sends you a short weekly update of the best credit card deals for earning frequent flyer miles, free hotel stays, and rewards points.

You can also find deals and information on frequent flyer mile credit cards online at a wide range of personal blogs, forums, and websites.

Get Started Now

Now it’s just a matter of applying for a few good cards and watching the points roll in.

Remember, make sure to pay your balance in full each month and stay up to date on the best deals, and you’ll be well positioned to maximize your credit card perks.

You’ll be flying for free in no time.

(Photo credit: Business Figure and Credit Card via Shutterstock)

More by this author

7 Reasons You Haven’t Found Your Passion Yet 7 Ways To Get Over Fear and Make Big Life Changes Fast Growth Is Overrated — Here’s Why Famous Biologist Louis Agassiz On The Usefulness Of Learning Through Observation How to Fall in Love With Boredom and Unlock Your Mental Toughness

Trending in Money

1 5 Books You Must Read if You Want to Be a Millionaire in Your 20’s 2 50 Businesses You Can Start In Your Spare Time 3 The Average Retirement Savings and How to Save Wisely 4 7 Sell Your Stuff Apps That Will Get You Some Extra Cash in Hand 5 How to Invest for Retirement (The Smart and Stress-Free Way)

Read Next

Advertising
Advertising
Advertising

Last Updated on June 25, 2019

5 Books You Must Read if You Want to Be a Millionaire in Your 20’s

5 Books You Must Read if You Want to Be a Millionaire in Your 20’s

Millionaires and billionaires read more than you think. In fact, the likes of Warren Buffet are said to read 1.000 pages a day. As the old saying goes “There’s no smoke without fire”; so, start off with these 5 incredible books!

1. The 48 Laws of Power

48-laws-of-power

    “If you are unsure of a course of action, do not attempt it. Your doubts and hesitations will infect your execution. Timidity is dangerous: Better to enter with boldness. Any mistakes you commit through audacity are easily corrected with more audacity. Everyone admires the bold; no one honors the timid.”

    On your journey to becoming a millionaire in your 20’s, there will be many people trying to manipulate you into doing what they want. This international bestseller by Robert Greene is the widely read by those in the entertainment industry because of its dog-eat-dog environment. This book is a must-read for anybody who wants to claim power and keep it. it’s a fun read that tells the story of some of the most powerful people in history.

    Advertising

    An example of a law of power is: Always say less than necessary.

    • When trying to impress, the more you say the more common you look and less in control.
    • Be vague.
    • Powerful people impress and intimidate by saying less.

    2. Influence: The Psychology of Persuasion

    influence-the-psychology-of-persuasion

      “Often we don’t realize that our attitude toward something has been influenced by the number of times we have been exposed to it in the past.”

      This book explains the core strategies people use to influence others using real world examples. Robert Cialdini’s book goes over human quirks like the need to be consistent, and how you can use that in your marketing strategy to make more money. “People’s ability to understand the factors that affect their behaviour is surprisingly poor,” Cialdini says, “which leads to people making poor decisions without realising why.”

      Advertising

      Cialdini includes real world examples of why people join cults, buy certain jewellery, or give to charity.

      3. Blue Ocean Strategy

      blue-ocean-strategy

        “Value innovation is the cornerstone of blue ocean strategy. We call it value innovation because instead of focusing on beating the competition, you focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space. Value innovation places equal emphasis on value.”

        This book argues that leading companies don’t succeed by battling competitors in “Red Oceans”, but by creating “Blue Oceans” where they have uncontested market space to grow. It goes over case studies like “Cirque Du Soleil” who created a blue ocean by creating a circus platform that didn’t include animals or more than one act on at once but instead, decided to focus on talented performers and music who created a mystical storyline.

        Advertising

        4. The Fountainhead

        the-fountainhead

          “A man’s spirit is himself. That entity which is his consciousness. To think, to feel, to judge, to act are functions of the ego.”

          The Fountainhead takes place in the United States, mostly in New York City, during the 1920s and 1930s. Billionaire Mark Cuban named his yacht “Fountainhead” after this book. This classic novel is about the struggles of an innovative architect named Howard Roark and his effort to achieve success on his own terms. Many entrepreneurs are inspired by this book because it depicts how you should be uncompromising when it comes to your vision and your goals. If you follow this way of life, you develop the ability to change the world and creating something unique.

          5. The Compound Effect

          Advertising

          the-compound-effect

            “Do you know how the casinos make so much money in Vegas? Because they track every table, every winner, every hour. Why do Olympic trainers get paid top dollar? Because they track every workout, every calorie, and every micronutrient for their athletes. All winners are trackers.”

            This book is by Darren Hardy the CEO of Success Magazine, he goes over how it’s the small, seemingly insignificant choices that compound to create success or failure over time. No one has a plan to be broke and fat but that’s what happens when you don’t have a plan and go along the path of least resistance. Hardy argues that you cannot improve something until you measure it and to always take 100 percent responsibility for everything that happens to you.

            So, those are five books you must read if you want to give it a try to become a millionaire in your 20’s. What are the best books you have ever read? Leave a comment and share these life-changing books with your friends to help them become successful like you.

            Featured photo credit: Bill Gates Foundation via businessinsider.com

            Read Next