Frequently Asked Questions
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My credit score has actually IMPROVED since I started traveling with credit card points and miles!
This is a good question and a responsible question! I am not a financial advisor, but this is what I have learned since I started opening multiple credit cards a year. (My credit score has actually gone up to over 800 since I started!)
- The two highest impacts to your credit score are your payment history (so always pay your card off in full and on time!) and your credit utilization (how much available credit you use - the less available credit you use the better it is for your credit score!)
- A medium impact to your credit score is the age of your credit. (Closing the credit card that I have had open since I was 18 will hurt my score a lot more than closing a card that I’ve only had open for a year or two!)
- Smaller impacts to your credit score are the credit mix (the number of lines of credit that you have) and hard inquiries/new credit. Every time that you apply for a credit card, there is a hard pull to your credit. I have noticed that my credit score will minorly drop when I apply for a new card but it bounces back up in a couple of months.
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The annual fee for a good travel reward credit card is almost always worth it the first year when you get the sign up bonus! For example, $1000 plus in travel for a $95 annual fee is a no brainer! But what do you do after the first year when the annual fee hits again?
ALWAYS keep your card open for at least a year - it does not look good to credit card companies to close or downgrade a card before that.
There are 3 options after the first year of card opening.
1. Continue to keep the card open and pay the annual fee. Sometimes the credit card benefits are worth the annual fee. For example, I keep my hotel credit cards open and pay the annual fee because they come with a free night every year that more than offsets the annual fee.
2. Downgrade the card to a no annual fee credit card. This will keep your line of credit open and not impact your credit score.
3. Cancel the card all together. Remember, the age of your credit card matters. I don’t recommend closing your oldest credit card as it will negatively affect your credit score more than a credit card that you’ve only had open for a year. Before closing your credit card, be sure to ask for a retention offer or see if they will waive the annual fee. You can decide from there if you still want to close your card.
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While my credit card strategy does center around the idea of opening multiple credit cards and earning sign up bonuses, you certainly don't have to do that! Getting 1-2 great travel reward credit cards in place and learning a few tips and "sweet spots" to stretch your points farther than just cashing out your points will allow you to travel a lot more for less! Grab my free beginner's guide here to learn some of my favorite ways to stretch your points far.
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Points and miles sounded like a foreign language when I first started learning about it! I GET IT! It's a whole different type of currency! But once you learn the language and it "clicks" you'll be confident in your plan to earn, redeem and travel for nearly free using your credit card points and miles!!!
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I know people who have been earning and redeeming points and miles with this strategy for over a decade and have still not run out of cards to apply for! Some cards allow you to get the sign up bonus multiple times (after a certain amount of time) and there are new credit cards released over time as well.
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Keeping track of your points and miles, credit cards, and searching/booking vacations with your points may take a few hours a month. I like to think of it as a side hustle that earns well over one hundred dollars in travel per hour! It's totally worth your time and not as hard as you think once you get the hang of it! I HIGHLY recommend the free Travel Freely app, to help you stay organized with travel hacking. Download it here!
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I recommend waiting at least 90 days between credit card applications for best chances of approval and to keep your credit score healthy. While you CAN apply and be approved for credit cards sooner than that, I would not recommend doing that often and I for sure would wait at least 30 days between credit card applications.