8 Habits of Highly Effective Credit Card Users

Sep 29, 2017

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Update: Some offers mentioned below are no longer available. View the current offers here: The Platinum Card® from American Express, Southwest Rapid Rewards Premier Credit Card

Just as experienced travelers know all the tricks to ensuring a pleasant journey, the most effective credit card users know how to maximize the terms of their cards. While the typical credit card user may pay very little attention to the nuances of these powerful tools, award travel enthusiasts should always be looking to earn as many rewards as possible while paying the fewest possible fees. In today’s post, I want to share some of the ways that the most effective credit card users achieve these goals.

1. Holding out for the Best Sign-Up Bonuses

There are dozens of amazing travel rewards cards offered by the major banks, and they almost always offer valuable sign-up bonuses to new applicants. But since it’s not a good idea to apply for every card out there, you should look to only apply for the best offers. In addition, the most effective credit card users will time their applications strategically so they can get in on limited-time, increased sign-up bonuses. For example, the Southwest Rapid Rewards Premier Credit Card from Chase currently has a 60,000-point sign-up bonus, but it seems to alternate quite regularly with a lower, 40,000-point bonus.

2. Using Cards That Offer Flexible Point Transfers

A couple of Singapore Suites/
You can move all four major transferable currencies over to Singapore Airlines to book awards like Singapore Suites.

Unless I’m trying to meet the minimum spending requirement for a sign-up bonus, I always try to boost my balances with one of the four major transferable point programs: American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou Rewards and Starwood Preferred Guest. Points with these four programs are extremely valuable, as you can transfer your rewards to airline miles, and sometimes to hotel points. This allows you to take advantage of tricks such as finding sweet spots in award charts and using airline geography to find loopholes. By keeping rewards with these flexible transfer programs, instead of with a particular airline, you’re also insulated from sudden devalutions to award programs.

3. Avoiding Foreign Transaction Fees

Plenty of credit cards still charge a foreign transaction fee of 3% (2.7% for American Express cards) on all charges processed outside of the United States. However, as users have become increasingly aware of this outrageous practice, more cards have dropped this pointless fee. Since there are now plenty of travel rewards cards without this fee — and many rewards are worth less than 3% — experienced credit card users have learned to only use cards without these fees when traveling outside the US, or even when making purchases from a foreign company. For more information on this issue, read my post on the top cards without foreign transaction fees.

4. Not Paying Interest

If you use your credit cards to earn rewards, then it should go without saying that you always avoid interest charges by paying your statement balances in full and on time. Rewards cards will always have a higher interest rate than similar cards that don’t offer rewards, so if you ever need to carry a balance, avoid rewards cards and look for cards with the lowest possible interest rate. In most cases, the savings on interest will be worth more than any rewards you could have earned. But even when you avoid interest, you can still maximize the interest-free grace period that your credit cards offer. Another alternative is a card that offers both 0% APR promotional financing and travel rewards.

5. Receiving Targeted Promotions

It’s worth paying attention to targeted card promotions, since they can net you extra rewards.

I’m not a fan of junk mail, but mail associated with credit cards is different. I always opt in to receive offers from my card issuers, which frequently include bonus offers for meeting spending thresholds or for adding authorized users. In fact, you don’t even have to wait to receive a letter or an email; you can also contact your card issuer and inquire about any offers that may apply to your account.

6. Requesting Fee Waivers

I’ll confess that I occasionally screw up and miss a payment, but in those rare cases I always request a waiver of any late fees or interest rates. I’ve also been successful when requesting that an annual fee be waived, although this only works about half the time. I’ve even heard of people receiving one-time credits for foreign transaction fees that they weren’t aware of. The point is that the credit card industry is extremely competitive, and card issuers are often willing to forgo a fee in order to retain a customer.

7. Utilizing Travel Insurance and Purchase Protection Benefits

Most travel rewards credit cards come with a wealth of benefits that can be extremely valuable, but only if you know to use them. To that end, it’s important to know the details of each benefit’s terms and conditions. For example, I always use a Citi card for its worldwide car rental insurance when visiting places like Israel and Italy, where the coverage offered by most other cards isn’t valid.

I also know that my Platinum Card from American Express includes a roadside assistance policy that not only dispatches help, but also pays for many minor services including jump-starting your car or even a limited amount of towing. Other valuable policies to be aware of include lost or delayed baggage compensation, trip cancellation and interruption coverage and purchase protection that covers theft or accidental damage.

8. Maximizing the Premium Benefits of Your Card’s Payment Network

The Amex Fine Hotels & Resorts program offers on-property credits, complimentary third or fourth nights and more.

In addition to any benefits offered by your card issuer, all of the major payment networks offer special perks for their premium credit card holders, which include holders of most travel rewards cards. For example, the Visa Signature program offers discounts on sports, entertainment and cultural events. The Visa Signature Luxury Hotel Collection offers guests automatic room upgrades (when available), free breakfast, free in-room Wi-Fi, a $25 food or beverage voucher and 3pm late checkout (when available).

Mastercard World and World Elite benefits include elite status with the Avis, National and Sixt rental car programs. The World Elite Air Program offers upgrades to business class on several airlines with the purchase of a full-fare economy ticket, and you can get discounts of 20-30% off the purchase of some tickets. With American Express, the perks will vary depending on the card you have, but can include free upgrades and more through the Fine Hotels & Resorts program.

Are you a credit card ninja? If so, what are your best practices?

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.