There are some obvious pitfalls you'll want to avoid when it comes to using a credit card. Missing payments, carrying a balance, and overspending are all big no-nos … but you won't find any of those on this list.
These mistakes have little to do with credit and everything to do with helping you see the world for pennies on the dollar, thanks to the power of points and miles.
So what kind of mistakes are we talking about? This list is full of blunders that every aspiring award traveler should steer clear of: Things like being afraid of cards with annual fees, never spending your points … and, for the love of God, don't open an airline card first.
Read on to learn from our full list of travel rewards miscues.
Starting With an Airline Card
I get it. You like to fly Delta, and they're good at marketing, so getting a SkyMiles credit card seems wise … but not so fast!
Don't get me wrong: There's certainly value to be had with co-branded airline cards – Delta SkyMiles cards included – but if you're opening your first travel credit card, most people will be better off starting with a card that earns points that can be transferred to multiple travel partners, including their preferred airline.
This means that if you're a Delta flyer, you could instead open the *amex gold* and earn flexible (and more valuable) points. Not only can Amex Membership Rewards be transferred 1:1 to Delta, but they can also be moved to more than 20 other airline and hotel partners.
This same logic applies to United loyalists, too. Since Chase Ultimate Rewards can be transferred 1:1 to United, starting with a *chase sapphire preferred*, instead of a United co-branded card, will be the better move for the vast majority of travelers.
After you've built up a solid foundation of transferable points, you can circle back and pick up the airline cards that you passed on the first time around.
Fearing Annual Fees
Why on Earth would anyone pay for a credit card?
That's the question I (and many other travelers) asked myself when getting started with points and miles. For years, I'd been swiping my trusty Discover it® Credit Card, content with earning 1% cash back on most of my purchases, in addition to the card's rotating 5% categories.
The thought of paying the bank money to hold a credit card was almost offensive. Then I was lured in with a big welcome offer on the *delta skymiles gold* (please see mistake No. 1 above). The rest, as they say, is history.
In fairness, the SkyMiles Gold Card waived my annual fee that first year, so it was a lot easier pill to swallow – but come year two, I was willing to shill out (at the time) $99 per year to be a cardholder because I valued the free checked luggage, priority boarding, and other perks that came with it. That same card now costs $150 per year (see rates & fees), after a recent revamp, but it also comes with even more perks and benefits.
So why did I change my tune? I did the math and quickly realized I was getting more value from the card's benefits than I was paying in annual fees. The Delta Gold card's free bags benefit alone saves me from paying $70 roundtrip to check a bag when I fly. So long as I'm taking just three roundtrip, I come out ahead on the new, higher annual fee. And that benefit is especially valuable now that I'm traveling with two kids (and all the stuff that comes with them) in tow.
So instead of looking at the fee as a cost, I started to see it for what it really is: an investment in future travel.
To be perfectly clear: This isn't universally true. Annual fees do have a real cost and they can quickly add up. But in the case of the Delta SkyMiles Gold card, the math worked for me and with other top travel cards, the numbers can be even more in your favor.
Like many things in life, you get what you pay for – and viewing annual fees as inherently bad totally neglects the value they provide.
Read next: How I Got Over My Fear of Credit Card Annual Fees
Worrying About Chase's 5/24 Rule
Never heard of the Chase 5/24 Rule? Good! You probably don't need to worry about it.
In short, the 5/24 rule is a restriction designed to limit applicants from opening multiple credit cards to keep earning big welcome bonuses. If you've opened five or more new credit cards – with any bank, not just Chase – in the last 24 months, Chase will deny your application.
Many points and miles influencers and websites (including ours) will tell you it's best to start with Chase credit cards. While that logic is sound, as a general guideline, it's also blown way out of proportion for most travelers.
Be honest with yourself: How many new credit cards are you actually opening? Or planning to open? For most people, the thought of adding more than one new credit card a year sounds insane and irresponsible, let alone five over a two-year span.
If you blindly follow the 5/24 rule to a T, you'll likely miss out on some really great offers (and cards) from other banks in the process.
So yes, it's important to be aware of Chase's 5/24 Rule, but most travelers don't need to be concerned with it because it's never going to impact them.
Only Opening Personal Cards
This one certainly won't apply to everyone, but I'd argue that many people have what the banks would consider a business and don't even realize it.
If you do a little consulting or freelance work, sell items on Facebook Marketplace or Etsy, or have a gig economy job, you're eligible to open a business credit card. And doing so is the secret recipe to earning loads of points and miles!
Why's that? Business customers are more profitable to the banks than Joe Schmo … and as a result, they're willing to offer bigger and bigger sign-up bonuses on their business credit cards.
What's more, business credit cards rarely show up on your personal credit report. This makes opening a business card here or there an easy way to stay under Chase's dreaded 5/24 rule. It also means any outstanding balances won't reflect on your personal credit utilization, generally improving your score.
Earning bigger bonuses on a whole new slate of cards, while keeping your new accounts to a minimum is a true win-win!
Read more: From New Cards to Closing Accounts, Here's How Your Credit Score Really Works
Canceling Old Cards
Earlier I mentioned how you shouldn't fear annual fees, and while that's true, you should definitely be mindful of them. One travel credit card often leads to two, and then three, and then … well you get the idea.
The more cards you have – especially when it comes to premium cards – the more annual fees you're on the hook for … and it can add up in a hurry. Ask me how I know.
So how do you avoid paying all those annual fees? While your first reaction may be to cancel a card when you're not getting enough value out of it, there's more you should consider (and do) before cutting it up and not looking back.
In most cases, taking one of these paths will be better than closing your card outright.
Read next: Want to Cancel a Credit Card? Ask Yourself These Questions
Ask For a Retention Offer
First things first, any time you're considering getting rid of a credit card you should call up (or chat with) your bank and inquire about a retention offer. If you're unfamiliar with retention offers, the banks – most notably, Amex – will sometimes offer you bonus points or a statement credit for agreeing to keep your card open for another year.
Why? Retention offers are smaller than welcome offers – meaning it's cheaper for them to keep you as a customer than it is to go out and acquire a new one.
Getting a retention offer is no sure thing, and you typically won't be offered one in back-to-back years, but it can be another way to help offset your card's annual fee and keep access to certain perks and benefits for another year.
Downgrade to a No-Fee Card
No retention offer? No problem. Most banks have a free card that you can downgrade to, allowing you to avoid paying an annual fee without closing your existing card.
Downgrading, also known as doing a product change, is great for several reasons: You can avoid unintended negative impacts to your credit score, hold on to some travel benefits, and maintain the ability to earn valuable points and miles. In most cases, if your current card no longer fits your needs, it's almost always better to do a product change rather than canceling it outright.
The one thing you'll want to consider here is whether doing a product change will keep you from earning a bonus later on. For example, American Express will only let you earn a welcome offer on each of its cards once per “lifetime.” If you were planning to downgrade your card to a no-annual-fee version and hadn't already earned a bonus on that card, you'd be ineligible for one later on.
Having said that, Amex has added restrictions to its welcome offers in recent years that make this a moot point: You now need to level-up if you want to earn multiple bonus offers with many of Amex's best cards. With other banks there are similar considerations to keep in mind so it's important to fully understand the rules before making any big changes.
Upgrade Your Card Instead
If you still want to cancel your old card, there's one other option you should consider first: upgrading it. I realize this might be a tough sell for someone looking to avoid an annual fee, but sometimes upgrading to a card with a higher fee and more benefits can actually be worth it.
Take the the longtime favorite *capital one venture card*, for example. This card earns unlimited 2x miles on all purchases and is one of the cheapest options for covering the cost of TSA PreCheck or Global Entry, but it also lost its twice-a-year lounge access when the calendar flipped to 2025. At $95 per year, the card is far from the most expensive on the market but without any new benefits or credits, maybe it's on the chopping block.
Sure, you could downgrade to the no-annual-fee *Venture One*, but it comes at a cost: You'd only earn 1.25x miles per dollar spent. Instead, upgrading to the $395 per year *venture x* might actually be a better move. Not only is the Venture X far less expensive than other premium travel cards from the likes of American Express or Chase, but it comes with two easy-to-use benefits that can help you come out ahead.
For starters, the Venture X comes with an annual $300 Capital One Travel credit that, when used to full value, can offset most of the card's annual fee. Then after renewing your card for a second year (and paying the annual fee), you'll get a 10,000-mile anniversary bonus. Since Capital One miles can easily be used to cover nearly any travel purchase, this perk alone is worth $100 towards travel.
Are you the type of person that would otherwise be spending $400 per year on travel? If so, these two benefits alone are covering your entire annual fee … and then some. Plus, the card comes with excellent airport lounge access, top-tier rental car elite status, and some of the best travel protections on the market. When you add it all up, upgrading your card (and paying more in fees) could actually be saving you a lot of money in the long run.
This is just one example of how an upgrade can save you money, but it's far from the only one.
Some banks will even offer you a bonus to upgrade to a card with a higher annual fee – meaning you might be able to product change to a no-annual-fee card and then get an upgrade offer to go back to your original card a few months later. Think of it as a “build your own retention offer!”
Experiencing Points Paralysis
The internet is full of travel websites and influencers, dedicated to helping you get maximum value out of your points. Ever heard of Thrifty Traveler (dot) com?
But here's the thing: They are your points – and you can use them however you want!
This means if you've got a stash of Capital One miles burning a hole in your pocket and you want to use them to cover your airport parking at 1 cent per mile, so be it. Found a sweet deal on a rental car through Chase Travel℠? There's no shame in redeeming Ultimate Rewards at 1.25 cents per point with the Sapphire Preferred.
While it's true that you can often get more value out of your points by transferring them to an airline or hotel partner for an award booking, this is hardly the easiest route. That, coupled with the fact that your points and miles are only getting less valuable with time, means the most valuable redemption might be the one available to you here and now.
We might sound like a broken record, but the best value for your points is always going to be for something you may not otherwise have purchased. In our eyes, if it can help you save at least a little, it's worth it. Scan through our list of the weirdest (and coolest) things we've done with points and miles to see what we mean.
Stop waiting for the perfect opportunity to come along or it may pass you by altogether!
Bottom Line
Points and miles earned from travel rewards credit cards can help you see the world for next to nothing … but the learning curve with using them can be quite steep. Avoiding some of these common pitfalls will help you get the most out of your points and miles before it's too late.