7 Deadly Credit Card MISTAKES to Avoid

10.411 visualizações6 de out. de 20

you need to know about so that you can avoid getting caught up in these mistakes just like any worthwhile pursuit in life it’s only natural to have the occasional slip up or mistake as you pursue credit cards to travel the world and in fact as we’ll touch upon in this video i myself occasionally make mistakes too even now that i participated in the game for more than five years but that’s exactly why i want to equip you with the right knowledge about the most common mistakes in the credit card game from the outset so that you can avoid falling into these traps so without further ado let’s talk about seven common credit card mistakes that can be deadly to your pursuit of elevated travel if you aren’t careful if that sounds good to you make sure to hit the like button down below just as the video starting out as a quick favor to the channel and let’s begin now one of the central tenets of getting credit card points is to always pay off your credit card bills so the first mistake we’re going to talk about is not paying off your bills in full and on time and this can be either accidental or intentional both of which are going to be key mistakes accidental missed payments can happen more easily than you might think and as a result their consequence is also not that severe as long as it doesn’t happen all too often now obviously it’s best to be as organized as possible in keeping track of all your credit cards ideally you’ll either have calendar reminders to make your bill payments or you’ll set up auto pay to directly deposit the statement amount from your bank account but even the most organized person can still get busy sometimes and miss the occasional payment in fact i myself have made this mistake before a couple times i’ve written an article over on prince of travel.com about this sometimes it just happens and when it happens all you need to do is either write a live chat message or call up your bank and ask for a forgiveness of the missed payments ask for a reversal of the late fee and the interest charges and more often than not they will be willing to grant that as a one-time exception the missed payment doesn’t get reported as a problem to the credit bureaus unless you’re missing payments by 30 days 60 days or 90 days in which case that will have a negative credit impact but the more dangerous mistake to make here is falling into the trap of only making monthly minimum payments on your credit cards instead of paying off the full balance in doing so you’d be carrying a balance on your card and having to pay extra interest every month for the privilege of doing so i’ve known certain individuals who were very eager about pursuing credit card rewards but we’re more than happy to carry a balance on their credit cards and pay interest every month not really understanding that the interest they pay far outweighs the value of the rewards that they’re earning so don’t be like that make sure to pay off your balance in full and on time every month and you won’t be falling into this trap mistake number two which really nobody should be doing but sadly does happen sometimes is letting points expire i personally have been guilty of this in the past and i’ll share with you the story after we talk about this mistake a little bit now letting your points expire is something that was more easily done in the past when many loyalty programs required you to redeem points a certain period after earning them these days however most programs allow you to keep your points active as long as you have some form of earning or redeeming activity in your account within a rolling period for example with aeroplan it’s an 18-month period with mariette bonvoy it’s a 24 month period and so on and so forth as long as you earn or redeem a single point within this rolling period you keep your points active and save yourself the risk of having your points expire where i believe the greater risk lies is if you’re managing loyalty accounts on behalf of other members of your household other players on the team in that case it can be easy to lose track of other loyalty accounts especially the more minor loyalty programs and whether or not the points are coming up for expiry soon in my case i had previously let another player’s ihg rewards account with 51 000 ihd rewards points expire unused because i wasn’t paying enough attention i had the account hooked up to the award wallet service i did get an email reminding me that the points were about to expire but i simply didn’t pay enough attention and the points ended up expiring and vanishing into thin air so definitely use services like award wallet to remind you about points that are about to expire but even then make sure you’re paying close attention so that you don’t end up making this very easy to make and very costly mistake mistake number three and this is really a series of mistakes but i’m going to group them all under minimum spending struggles this is when you don’t end up making enough spending to meet the minimum spend and end up missing out on a sign up bonus on a new credit card as a result there are different types of minimum spending struggles that you might encounter all of which are best avoided the first is applying for a new credit card and being attracted by that sky-high shiny welcome bonus but not having a plan in place to meet that minimum spend before applying for the card oftentimes the best welcome bonuses also come with the highest minimum spending requirements and it’s essential that you have a plan in place to meet that spend if you’re gonna apply for the card because if you do apply and miss out on the spend not only have you wasted a credit hit here and maybe wasted some of your spending capacity but there is a chance to that you will have locked yourself out of that sign a bonus in the future if in fact it is one of those once in a lifetime sign up bonuses so whether you have major purchases lined up or you’re planning to front load your spending by buying gift cards or pre-paying bills or you’re planning to use third-party bill payment services like plastiq to pay your taxes or you’re simply gonna buy your friends food and have them pay you back make sure you have a plan in place before hitting that submit application button if some of those higher minimum spends seem out of reach to you then perhaps aim for some of the lower hanging fruits in the meantime with lower spending requirements until such time that you have enough purchases lined up to meet some of the higher spends don’t give in to the fear of missing out to try to pursue all the sky high offers with high spends all the time because those offers will always come back around in the future this is a mistake that i thankfully never made myself although i do recall when i was first starting out with credit cards being pretty frustrated and not being able to meet the high spending requirements and not be able to get the higher bonuses out there until i was able to figure out some extra ways to meet those spending requirements by applying my lessons from mistake number seven that we’re going to talk about later on in the video and only after that did i actually go for those high spend high rewards cards out there there’s also other pitfalls with minimum spends to be aware of for example the annual fee of a credit card never counts towards the minimum spend so when you’re calculating how much money you’ve spent make sure to subtract the annual fee if it gets posted on the first statement also sometimes after you’ve met the minimum spend and you need to make a return on an item that you have purchased that can bring you back under the threshold and cause your points to be clawed back and if the minimum spending window has passed by that point then you’re out of luck so my advice is to always overshoot the minimum spending amount by a little bit just to give you that buffer level in case you do need to make a return so that it doesn’t actually bring you below the threshold and cause your welcome bonus to disappear mistake number four just like you never want to apply for a card without having a plan to meet the spend in place you also don’t want to be earning points across the board without having a plan to redeem them eventually in fact this is one of the most common mistakes that i witness among people who are just getting started with collecting points doing so without knowing what they’re going to do with the points down the line the correct way to approach everything is to always start at the end goal what type of trip do you want to take how many people are going on the trip which destinations are you going to which airlines do you want to fly what time of year do you want to travel which hotels do you want to book when you’re at the destination once you know that figure out how many points the whole thing is gonna take if you’re traveling in business class it’ll take more points than if you’re flying economy and so on and so forth and then once you know how many points you need then think about which credit cards you need to apply for in order to get you there the focus should be on the goal at the end and with any credit card application you should always be thinking about how those points that you get from the card will help you get closer to that goal and this mistake is also one that i haven’t made in the past because thankfully i’m somebody who wants to travel all over the world and so when i was first getting started with collecting points i was just happy because i knew that these points would eventually get me to places i would want to go i was very flexible in that regard if on the other hand i only wanted to go to certain places at certain times with certain airlines then i probably would have needed to put a lot more thought into which points that i choose to get and which cards i choose to avoid mistake number five canceling cards prematurely and this is something that i personally had done in the past too when you’re just starting out it’s only natural to think that after applying for a card getting the bonus using the benefits for a little bit and then before the second year’s annual fee hits it’s a good idea to cancel the card to avoid paying that second year’s annual fee that might be true but it does ignore the significant benefits that switching your cards instead of cancelling can bring doing a product switch on a credit card can bring the same upsides as cancelling the card one to be eligible for future welcome bonuses and two to protect yourself from paying extra annual fees compared to what you need to pay and it can also have the additional benefit of being better for your credit health and credit score over a long period of time we’ve covered this concept in more detail in this previous video about how does opening and closing credit cards impact your credit score basically if you were to cancel a card then the positive impact of keeping a low utilization and maintaining a perfect payment history obviously no longer applies because your card is cancelled but if you were to switch the card or downgrade it or upgrade it then that same credit account remains active on your credit file so as long as you keep making payments on time and keeping a low utilization then that actually has a positive impact on your score rather than simply no impact meanwhile with select issuers like td cibc and rbc product switching instead of canceling can also help you avoid paying extra annual fees all while being eligible for the welcome bonus again in the future i myself definitely made this mistake too many times when i was first starting out having cancelled cards when i was better off switching them instead as a result my credit karma profile looks like a graveyard of cancelled cards and could in fact look a lot cleaner having achieved the same outcomes with perhaps a better impact to my credit score too mistake number six this is an interesting one that i find a lot of people are tempted to do when they’re first starting out and that’s drawing attention to errors and mistakes that are in your favor let me explain what i mean when you’re pursuing credit card points to travel the world earning welcome bonuses using the right cards with the right earning rates maximizing transfer bonuses there are two sets of outcomes that can happen the first is what the terms and conditions say will happen and the second is what actually happens these two sets of outcomes are often the same and the banks will have you believe that they are the same but in fact sometimes they are different sometimes what actually happens is less favorable than what should happen in which case you absolutely have a recourse to say to the bank hey i was supposed to get x amount of points but i only got y amount of points instead can you please fix this and give me the number of points that i was entitled to on the other hand sometimes what actually happens is more favorable than what’s supposed to happen have you ever gotten double the welcome bonus on a certain card have you ever had a temporary elevated earning rate that persisted for longer than it was supposed to play the game enough and these things will eventually happen to you sooner or later and when it does maybe it’s best not to draw attention to it even something like a once in a lifetime rule on a credit card welcome bonus that may or may not be enforced you can bet that if you were to call the credit card company and ask them hey i’ve had this card before will i get the bonus again then your chances of actually getting that bonus again will be far lower than if you had simply never called and let things play out the more you maximize credit cards the more often you find that sometimes things just happen that are just happy accidents and it’s best to leave things that way if you want them to continue now you might be wondering how can i learn about more of these happy accidents so i can use them for myself well that’s what brings us to mistake number seven that i often see people make when they’re just starting out flying solo now obviously when you’re just starting out it’s likely that you’re learning the basics on your own or perhaps with a friend or a partner but as soon as you can if you wish to level up your game it’s imperative to start building your network and connecting with others who are just as passionate about traveling the world on credit card points as you are this significantly accelerates your learning process and helps you absorb information of all the different credit card options and loyalty programs out there at a much faster rate and it’s pretty easy to see why when you’re learning stuff by yourself you only have your own time and experiences to draw from and when you’re just starting out your experiences are fairly lacking in the first place however when you’re part of a community you can continually learn from everybody’s shared experiences both their successes and their failures you can try to replicate their successes while avoiding their failures on your own journey to navigating the path towards elevated travel with points so if you’re serious about raising your travel game then building community should very much be near the top of your to-do list now here at prince of travel we do have an option for you the discord chat server as part of our prince of travel membership which you can find in the link in the description below however you also have the option of attending in-person events and get-togethers with fellow members of the community these used to get hosted pretty often before the pandemic and i’m sure they will be back quite often as we emerge out of the pandemic and once you attend one of these events you can then keep in touch with the people that you’ve met that’s another popular way to start building your network too either way if you want to win at this game and maximize your time in the air then avoid mistake number seven and don’t fly solo and with that we’ve wrapped up our seven common mistakes that i often see people make as they embark on the credit card journey make sure to heed these lessons and avoid these mistakes if you want to set yourself up for the best chances of success if you enjoyed this video make sure to hit the like button down below and subscribe to the prince of travel youtube channel just click the subscribe button below the video let me know in the comments do you think there’s any common mistakes that should have been on the list that i may have missed and which of these common mistakes if any have you made in the past and what have been the lessons that you’ve learned from them let me know and i’ll see you in the next video [Music] when your credit card statement hits when your credit card hit when your credit card statement hits when your credit card statement arrives [Music] gosh




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