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At The Points Guy: Having 20 credit cards or more is smart financial planning. Are you leaving free money on the table?

Key Points
  • At The Points Guy, top executives and their households can have over 20 credit cards offering flight, airport, hotel and cash rewards. And they know how to use them.
  • Few Americans would need that many cards, but many financially responsible people are leaving money on the table.
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Ziploc bags have many uses, from school lunches to summertime attempts to protect devices, because who could boat without their iPhone? Ziplocs have unexpected uses, too (see: Youtube.) Or, talk to people at The Points Guy, a travel information site which has made a name for itself advising consumers on how to evaluate the best rewards.

"I currently have 19 cards. My wife has another 7. Our household has 26 cards," said Scott Mayerowitz, The Points Guy executive editorial director.

That's where Ziploc bags come into play. A few go-to cards go into wallets but Mayerowitz uses plastic bags for the rest. "Some of these cards are solely for the benefits. I put very little money on them. I have a Brooks Brothers card and I don't dress as formally as I used to, but it came in handy for the annual birthday gift card and some of the sales promotions they had, and there's no annual fee, so I just kept it."

A beginner's guide to credit card rewards

Most Americans don't shop at Brooks Brothers, or need more than 20 credit cards, but the way The Points Guy staff looks at the world, people, even financially responsible people, are leaving free money on the table. And you do need to be financially responsible to take advantage of any card offers.

"The very basics: If you do not pay your bill in full every month, it does not make any sense to think of the rewards a credit card can give you," Mayerowitz said. "Those interest rates will eat away at savings you can get through cards. That's the most important advice for anyone."

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Boston Federal Reserve data released in August 2017 found that roughly 75% of consumers had at least one credit card. A Gallup poll from 2014 found that the percentage of Americans holding three to four cards was 18%, and less than 10% for those holding five to six cards. In the post-financial crisis world, the number of Americans holding no credit cards has gone up. According to the Gallup survey, it was 29%.

As the economic recovery has lengthened, more Americans are getting into trouble with debt, especially younger Americans, who since the Great Recession had been reluctant to take on credit.

"There is no magic number of cards. I know 19 is a bit extreme, maybe a bit more than a bit, but for people who are savvy about this and willing to put in a little energy, there can be some great rewards," Mayerowitz said.

In addition to not even thinking about a credit card if you cannot pay off the bill in full every month, here are pointers from The Points Guy's Mayerowitz on how to take advantage of the card market.

1. Non-rewards cards don't make much sense

According to the Boston Federal Reserve data, many Americans are still holding non-rewards cards.

"If you are paying the bill in full every month you should 100% be in a rewards program," Mayerowitz said. "Some sort of reward from a credit card. If you are not, you are leaving free money on the table."

He said it is understandable that people are afraid to pay an annual fee (more on that below), but there is another way to look at it: "There are many cases where it is prepaying for a vacation on sale."

2. Transferable points are better than hoarding points

Saving up for a dream vacation is "why we are in this game in the first place," Mayerowitz said. But he cautions consumers against putting all their points on one card, especially if those points are not transferable across airlines and hotels.

"It's not a bad idea to be aspiring to go somewhere spectacular, but you need to be prepared by diversifying your points as much as possible," he said. "If you really just want to have one or two cards in your wallet, I suggest going with one of transferable card programs."

That can help if travel plans change. "Today you might be dreaming of a trip to Australia, but at the last second, your partner says you should go on medieval castles tour in Europe," he explained.

Mayerowitz said that if you live in an airline hub city, like Atlanta for Delta or Chicago for United or Dallas for American, cards that are tied to one airline can still work well. But he added, "Transferable points are definitely the most valuable."

3. If you are an urban takeout junkie, rewards count

Grocery rewards cards may not be as well-known as airline miles cards, but can rack up points for every dollar spent. Urban professionals who order a lot of takeout meals are losing out if they don't make use of rewards points that accrue from use on mobile ordering apps. Mayerowitz has a card saved with his Seamless account that gets him four points per dollar. It also comes with a $10 monthly credit on Seamless. "For me, it's a no-brainer," he said.

4. Companion plane tickets can be very valuable

For individuals with relatives or friends that they regularly visit, free companion flight offers on cards can be very valuable.

Mayerowitz has three different cards that give him companion tickets, and which also feature free checked bags. He uses a free annual companion ticket to travel with his daughter and with many domestics flights to places he visits, like Florida, never less than $195, the annual fee on a card can be much lower than the annual travel savings. That's especially true if tickets need to be booked closer to the travel date.

5. Managing cards and your credit score

The credit score formula is too complex to sum up in a few sentences, but there are a few aspects of it that relate directly to rewards-card use and number of cards held.

Opening up a new card does have a "temporary, slight ding" on a credit score," Mayerowitz said. You need a strategy to spread these applications out. A person who wants to be "very aggressive" with rewards cards optimization can be applying every two to three months. But "not ten cards in a week," he said.

If there are any other credit needs occurring in your life, such as a mortgage or car loan, those come first and you should not be applying for cards at the same time. At least, never more than one. Mayerowitz did say if there is a great card offer and you are only getting one card, that application will not make a "giant difference" on a credit score.

Referencing his Brooks Brothers card, he said holding more than one card is part of building a credit history, and the longer you hold cards the better it is for your score. "That's why I keep open some cards that don't have an annual fee."

Also, the average credit limit on each card comes down with the more cards a person holds. So it is possible the holding six credit cards will result in a better credit score than holding four.

6. Understanding annual fees

Many card holders have realized they can rack up enough bonus miles to get a free plane ticket before the annual fee is due in the second year (it is often waived for the first year). Credit card companies are increasingly cracking down on this practice.

"They realize people are gaming the system and they have taken measures to cut back on it," Mayerowitz said.

If a card company sees an individual opening a card and canceling after annual fee hits, they are not as likely to offer you credit cards in the future. "It's not something that someone who is in this for the long-term should necessarily be doing."

They also are putting more restrictions on card sign-up bonuses. Some of the cards are spreading out the sign-up bonus miles into spending tiers, with additional bigger bonuses not awarded until a car holder hits $20,000 to $30,000 in spending, which for most individuals will not occur with the first year of card use, before the annual fee is charged.

Hidden fees: How to fight and avoid them

Mayerowitz said sometimes it just makes economic sense to pay the annual fee, not only for companion airfare. Basic cards have annual fees as low as $95.

"A family of four checking two suitcases, round trip, will come out ahead," he said. That's $120 in baggage fees versus an annual fee of $95.

Mayerowitz said to monitor these rewards carefully because consumers often forget about things like companion ticket and free bags. "Smart travelers will make sure to use these."

7. Making decisions based on your life situation

Responsible card use will always come back to financial literacy: Consumers being aware of the consequences of what they are purchasing, responsible budgeting, and having enough of a cushion of savings to pay bills in full each month.

Frequency of travel and vacation also is important in evaluating the benefits of rewards cards. Data shows that most Americans do not take more than one vacation a year. But for more frequent travelers (and more frequent spenders), the value of rewards cards increases.

"You need to stop and do the math," Mayerowitz said.

And if you can't figure out how to do the math, that might tell you all you need to know about whether these rewards cards are right for you.

CHECK OUT: Top 10 metro areas where millennials earn the biggest paychecks via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.