Maximize Reward Credit card Benefits Without Damaging Your Credit Score

Credit card rewards can be truly rewarding, as long as you know how to keep your credit health in check. In fact, you can apply for a card or two and enjoy the benefit of free hotels, flights and more. In some occasions, people apply for 3 or more cards simultaneously in order to get a large number of frequent flyer miles (FFM). However, Good creditsome people may worry that this may hurt their credit score. Do not fret because you can actually maximize these benefits without inflicting damage on your credit score.

Overview

There are people out there who move from one card to another in order to maximize credit card rewards. They only need to spend the required minimum amount on their new cards to get the FFM bonus. Afterwards, they move to another card company to repeat the same process. Usually, the minimum amount is $1000 to $1500 in 3 months. By using this method, a person can get as much as a million miles of frequent flyer bonuses in a single year. Nonetheless, many people who have used this method have healthy credit scores not less than 760. What’s the secret?

Be A Responsible Payer

Every month, make sure that you pay your balance in full. This may sound a bit difficult, but as long as you pay responsibly every month, without carrying any credit card debts over to the next month, your credit rating will remain safe.

How It Works

When you acquire new cards to get FFM bonuses, there are always inquiries on your credit account. Remember that inquiries will decrease your credit score. However, it will only be a few points because new inquiries only represent 10% of your entire credit score. In addition, the decrease is only for a short while.

If you have a score of at least 720, there is no need to worry about the initial drop. Remember that new cards will also be useful in your credit utilization ratio. Since it increases your overall credit limit, it reduces the ratio as well. Understand that lowering the credit card utilization ratio helps increase your credit score, which then balances the initial dip in the score or probably even raise it in the long run.

Recommendations

As a recommendation, try to get all inquiries done on the same day. In addition, keep track of your spending limits. As long as you keep paying your balance responsibly every month, you will definitely get your score in good standing after a short time. At the same time, you get to stack up FFM bonuses.

Find The Best Deals

Staying up-to-date on the latest deals is critical. Credit card companies always come up with new reward programs as they launch new cards. Since the change is continual, sign up on newsletters and other sources of updates. If you want to get the best out of credit card rewards, you need to be informed about the best deals on time.

Bottom Line

If you want to take advantage of credit card rewards, make sure that it does not hurt your credit standing. The best means to do this is to become a responsible payer. Keep your spending limits in check, pay all your debts in full every month, and always be up-to-date with the latest news on credit card deals.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

3 Comments
  1. Have always wondered about these huge FFM deals.Also always wandered if it hurts my credit score by not paying the full balance each month, i pay way over the minimum but usually not the full amount. Thought it may hurt but have also thought it doesnt effect credit score. So which is it?

    • it will only effect your credit score if you are carrying large balances on a lot of different cards. Your debt ratio is a big part of your score. If you are near the credit limit on all your credit cards then it would be in your best interest to pay them all down. When our banks look at some of our loan or lease request, they are looking for less than 40% of the available credit being used.

  2. Great advice here. While it’s tempting to put things on a credit card just to get the rewards, carrying a balance and paying interest negates the rewards. However, I used an interest-free (for a year) card for some dental work and used the rewards for gas cards for my vacation. I got the card paid off early along with about $100 in gas.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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