The skeptical notion that if something seems too good to be true, it probably is, rings true for many when it comes to credit card rewards. Influencers claiming to travel the world for “free” and taking advantage of red carpet-like perks from credit card rewards can almost seem like a scam.The skeptical notion that if something seems too good to be true, it probably is, rings true for many when it comes to credit card rewards.
If a card’s welcome bonus doles out 80,000 points when you meet the spending requirements, and its rewards are worth a minimum of 1 cent each, that’s at least $800 in value. If that card has a $95 annual fee, it’s a huge win, even before taking into account additional perks like lounge access, monthly credits and travel protections.
That’s why optimizers usually have a handful of cards at their disposal for different types of purchases, which can include individual cards for groceries, travel, dining, utilities, online shopping and one for all other purchases. See: Tempted to open a new credit card? It might get more difficult. Powell warns of ‘tighter credit conditions for households and businesses’
When you apply for a new card, you’ll receive a hard inquiry on your credit report, and that can shave a few points off of your score. But optimizers know that it’s a temporary loss, and those points can be made up for with good credit habits.