- Do not pay annual fees if you are in the military*.
- Don’t stress! This is supposed to be a fun and lucrative hobby.
- No credit card debt EVER.
- You must pay your balance in full and never miss a payment.
- Keep your cards open, especially the oldest card you have on file.
- If you don’t use a card any more and are charged an annual fee, ask for a retention offer.
- Keep track of your bonuses and benefits and don’t let rewards or points expire.
- Don’t miss a welcome bonus
- Hit your category spending bonuses.
- Never pay foreign exchange transaction fees.
- Know your limits. Don’t stretch yourself too thin.
In this post:
1. Do not pay annual fees if you are in the military.
Military servicemembers and military spouses have a unique advantage in the travel rewards hobby: you usually do not have to pay annual fees on the best credit cards!
This totally changes the cost benefit analysis of the hobby. Rule #1 is never pay an annual fee you don’t have to if you’re in the military!
*Most, but not all, of the top luxury travel cards waive annual fees for US active duty military servicemembers. We'll cover in a later lesson how to get these fees waived. Keep in mind annual fees are sometimes worth the benefits of the card.
For more information now, check out the American Express military fee waivers and Chase military fee waivers.
2. Don’t stress! This is supposed to be a fun and lucrative hobby.
Seriously, this is supposed to be a fun and money making hobby. If you lose money, pay fees you don’t have to, don’t use the points, or don’t get the benefits, then don’t do it!
If you are living paycheck to paycheck, buy my book on achieving financial independence in the military. Get your financial house in order and then come back to travel rewards.
3. No credit card debt EVER.
When you start opening credit cards to earn travel or cash rewards, you CANNOT have any credit card debt hanging over your head.
Any rewards you earn will be offset by the interest you pay on the debt you have. Wipe your slate clean. Pay off any credit card debt you have before you start earning rewards and opening more cards.
4. You must pay your balance in full and never miss a payment
This goes along with the rule above. You must pay your balance in full every month. I actually pay off my balances every week so I usually receive a $0 statement at the end of the billing cycle.
Never miss a payment by setting reminders on your calendar, phone, or have the credit card company email you automatically. I have a monthly statement reminder emailed to me from American Express and Chase emails me when my statement is available.
I also have reminders set up if I am 5 days away from a bill due date and have not yet paid. This rarely happens but it’s a good safety net if one of my bills slips through.
Also, make sure you sign up for paperless statements and bills so you never have to wait on the mail. Download the credit card apps to your phone and make payments frequently.
I also set all of my credit card accounts to auto pay. That way if I do mess up and miss a payment, I don't actually miss the payment. I have it set up so I get a warning a few days before the auto payment is sent so I don't overdraft my checking account.
5. Keep your cards open, especially the oldest card you have on file.
Part of your credit score is determined by account age. If you open a lot of cards over the next few years as you build your portfolio of rewards points, that can make your credit age lower. Try to have a no annual fee card as your oldest card and keep it open forever.
I made a mistake early in my credit card rewards hobby when I closed my oldest no annual fee card. By keeping it open I would have aged my credit score by another 2 years.
6. If you don’t use a card any more and are charged an annual fee, ask for a retention offer.
A retention offer can be a great way to keep a card open if you have an annual fee on it. If you are charged an annual fee, simply call the company and ask for a refund of the fee or some points to keep you on as a customer. If you no longer use the card, feel free to close the account.
It’s up to the credit card company to keep you as a customer, not the other way around.
7. Keep track of your bonuses and benefits and don’t let rewards or points expire.
For instance, the American Express Platinum card has an annual airline fee credit. Don’t let this expire without utilizing it! The Uber and UberEats credit the AMEX Platinum provides expire monthly. If you don’t use the credits, send some UberEats to a friend or loved one. They will love a free lunch or dinner!
Some hotel credit cards offer free night stays annually. Make sure you book and use these free stay credits before they expire. I keep track of all of my benefits in a spreadsheet so I know when and how to use them.
8. Don’t miss a welcome bonus.
Make sure you keep track of when you were approved for the card, when the welcome bonus period expires (usually 3 or 4 months after account opening), how much the welcome bonus was for, and how much you need to spend to active the bonus.
9. Hit your category spending bonuses.
If your card pays 5% cash back or points for gas purchases, make sure you use it to buy gas! Unless you are trying to meet the minimum spend on another card, using each card to maximize the category spend bonuses goes a long way to accumulating a lot of points.
10. Never pay foreign exchange transaction fees.
It’s just too easy to never pay a foreign transaction (FOREX) fee. All of the best travel credit cards have no foreign transaction fees.
The best Chase and AMEX cards for military servicemembers have no foreign transaction fees AND no annual fees, so it’s a no brainer. Never use a card overseas that will charge you a foreign transaction fee.
Especially if the military has you living overseas or travelling overseas frequently, you have to a get a no foreign transaction fee card.
11. Know your limits. Don’t stretch yourself too thin.
This gets back to the “Don’t Stress!” rule. If you don’t spend $3500 per month on your credit cards, it probably doesn’t make sense to try to meet a $10,000 minimum spend on a card.
Most of the best travel rewards cards required $1000-$5000 minimum spend in 3-4 months. That’s as low as $250 per month to as much as $1670 per month in spending. Know yourself and your spending habits. Don’t buy stuff you don’t need just to meet a minimum spend.
There are lots of ways to help you meet minimum spend though: pick up the tab for everyone when you go out to dinner. Buy some Amazon gift cards. Book your travel this month rather than putting it off any more. Pay all of your utilities or insurance in advance for the year. Pay your rent through a service like Plastiq that lets you send checks with a credit card.
Next Steps
If you're ready to open your first travel rewards credit card, check out this month's best credit card offers for military servicemembers. Or, check out the optimal order in which to open credit cards in the military to maximize the annual fee waivers.
If you want to keep learning you can see the rest of the course here or just wait for your next daily email tomorrow.