When it comes to maximizing credit card points, Brian Kelly, also known as The Points Guy, has cracked the code.
He started a blog in 2010 to share his best travel and points advice. It took off and, a year after his first post, Kelly quit his corporate job to run his site, The Points Guy, full time. He sold the company to Bankrate in 2012 but remained CEO. Now he jets around the world for next to nothing, thanks to credit card rewards and frequent-flyer miles.
Earning points, he's says, "is really easy," but, "spending them — this is where it gets tricky."
Here are the biggest mistakes he says people make around credit card points.
For starters, you want to make sure you're using a rewards card that is right for you and best fits your spending habits.
"The goal is to get credit cards that reward you for the categories you spend the most in," says Kelly, "whether that's supermarkets, dining, travel, you name it."
When it comes to travel rewards cards, "think about the airline you want to fly and the routes you want to take," he says. For example, "if you love flying Southwest, don't get an Amex card." Instead, go with Chase, he says, which lets you transfer its rewards points to Southwest.
"The biggest mistake that people make when redeeming points is to just take the easiest redemption they see," says Kelly, adding: "In general, the easiest option is not the best."
Say you've racked up 100,000 points. When you open your credit card statement, the first thing you may see is the option to redeem those points for a $500 statement credit, for example. But, with a little research, says Kelly, you might find that your points could get you two business class flights to the Caribbean if you transfer them to an airline.
Likely, "everyone will say, well I'd rather go to the Caribbean [instead of getting statement credit], but people will take the easiest option," he says.
Putting in the time to research and compare your options can be worth it.
"This is where you can really get ahead of the pack, by educating yourself," says Kelly. "Points are a currency that are more valuable the more you educate yourself on that currency. Unlike the U.S. dollar, which may fluctuate out of our control, you can make points more valuable by mining your own knowledge."
"Another thing people are really dumb about is hoarding their points," Kelly says. "They think that the points will be worth more in the future. Not true."
In fact, "the airlines are constantly increasing the amount of miles needed for flights," he adds, "so, if today it's 150,000 miles to go business class to Europe round-trip, in a year or two it's very likely that it may be 200,000 or 300000 points."
As a rule of thumb, the longer you wait, the less valuable your points are.
"People get overwhelmed," says Kelly. "Don't be overwhelmed. It's going to be OK. Put a goal in mind, think about what you want and then work back from there."
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